The status quo of German online retail: Keeping an eye on omnichannel [5 reading tips]

After Summer is over and September rolls around, opportunities to review fresh input and goals come around. Events (like #dmexco) help businesses and decision-makers continually listen to the market and give guidance heading into the last quarter of the year. Market figures also serve as a basis for intensifying or adjusting business strategies.

Of course, the question arises, how fit is German online retail, which online shops are at the top, and what lessons can be learned?

Statista’s and the EHI Retail Institute’s annual study “E-Commerce-Markt Deutschland 2018” (Germany’s E-Commerce Market in 2018) provides answers.

A safe choice: Be online

“Be(ing) where your customers are” is more important than ever and means companies need to have a strong digital presence. Being online means being able to reach 59.14 million internet users, just in Germany. From that number, more than two-thirds shop online.

But the internet isn’t just growing in consumer-related areas, it’s becoming a part of everyday life. Competition is also digital: The German e-commerce market is booming and growing rapidly from year to year. According to the study mentioned, the top 100 German e-commerce retailers generated €30.5 billion last year, an increase of 11.3 per cent.

But it’s not just about taking this sales channel seriously and serving it. Above all, well-informed decisions are required to secure success in digital competition.

A competitive advantage: Omnichannel services are paying off

It is important to know what moves the market and how your own business can benefit from it. Businesses are not just busy with potential AI applications or creating a holistic customer experience. The effective networking of the growing omnichannel supply is also a great challenge.

Especially because omnichannel services are gaining ground in the retail sector. In total, 68 of the 100 largest online retailers are also active in the stationary sector. Of these, however, most (57) have their roots in stationary or by mail order. Only eleven of them are former online pure players.

Although the move from stationary to online is apparently going more often than the other way around, digital DNA companies are increasingly recognising the benefits of the store and how it can build a holistic omnichannel ecosystem. Not just Amazon, Alibaba, and Google are going offline. Mytoys.de has 17 stores, Cyberport has 13, and Misterspex.de has 10. Zalando and Check24 have recently opened outlet stores.

So the strategy of the two distribution channels works. Mediamarkt.de, Saturn.de, and Ikea.de are also great examples, they’re profiting with more than 30 per cent of sales being from substantial growth in e-commerce revenue.

A source of inspiration: Use front-runners as a role model

Meanwhile, the top 3 online retailers (in Germany) Amazon, Otto.de, and Zalando are expanding their positions. Together, they reached 13.1 billion euros in revenue and dominate almost half (43 per cent) of the market. Although this is of course in the interest of online giants and not actually encouraging for SMEs.

With its own retail revenue of 8.8 billion euros, Amazon continues to lead the German e-commerce market and maintains a high lead over the second best, Otto.de, and third best, Zalando.de.
What makes leading companies so attractive and how can the rest learn from them?

What makes leading companies so attractive and how can the rest learn from them?

• Amazon is characterised by its tremendous focus on customer satisfaction as well as robust and strong logistics and last mile capacity. In fact, the company is setting up its own delivery service as the parcel services are overloaded and lack delivery staff. Likewise, retailers of all sizes can tap the full potential of their stores and become independent from FedEx, UPS, and others through local deliveries and same-day deliver
• The Otto Group is the largest online retailer in Germany after Amazon. This development is also strongly technology-driven and their subsidiary About You has a lot to do with it. Through a revolutionary open commerce concept, retailers can offer their products on About You, developers can develop their own apps for the online store, and influencers can set up their own profiles to make recommendations.
• Zalando is celebrating its tenth birthday this year. Their recipe for success lies in technology, in particular, offering customers a simple and trouble-free purchasing process. In addition, Zalando has understood that it will be crucial to have a platform in the future. That’s why the Berlin-based company has been working on its platform-based business model since 2015, where customers, infrastructure, and partners are their three pillars of success.

Technology is crucial, but by itself, it is not an answer to the complexities of digital transformation. Without the right workflows and the right mindset, success will be lost.

The entire ranking of the 100 top-selling online shops in Germany will be published on 10.10.2018.