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German Market Trends

4 MINUTE READ | October 4, 2018

German Market Trends

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Lauren Resnick

Lauren Resnick has written this article. More details coming soon.

Let’s take a journey to Germany and dive into the incredible culture, consumer behavior and growing economic trends that this prospering country holds. In this installment of our global market series, we’re uncovering how Germany, Europe’s largest economy, is a thriving market with great potential for new to market brands.

With a population over 81 million people and the highest GDP in Europe, Germany is the largest consumer market in Europe (in both population and purchasing power). The country’s economy contributes over 20% of the EU’s GDP and is named the 4th largest economy in the world. With Germany’s thriving economy, it’s no surprise that brands and advertisers can find opportunity and growth there.

But Germany’s influence is more than just metrics, as the country has an affluent population with increased purchasing power that is also accustomed to a higher standard of living. The combination of an empowered, complex consumer leads to a high growth potential for advertisers.

The average German consumer is receptive to discount retailers as well as big brand names across different verticals. This means that these consumers have a lower standard of brand loyalty, where they can often be found prioritizing price over brand names. However, this doesn’t necessarily mean they are always willing to sacrifice brand quality. In fact, one of the most important, interesting characteristics of German consumers is their ability to quickly compare high-quality products.

German Flag

With the rise of discount retailers and increased online shopping, consumers are becoming savvy shoppers, comparing prices and quality to scale. In fact, more than 90% of German consumers shop online. Thomas Slide, a Retail Analyst at Mintel, said that “online retailers are profiting from their ability to give consumers access to an unprecedented variety of products while simultaneously making it easier than ever to find what they are looking for.”

As online shopping continues to grow, German consumers are making smarter decisions and expecting a large variety of products that they can compare to others with ease. While price is not the top factor in this market, consumers value the number of choices available to compare online.

Like other global markets, consumers online shopping is at an all-time high in Germany. The Internet usage uncovers the next most important German market trend, the ROPO trend. What is the ROPO trend you might ask? It is the effect that refers to the increasingly popular concept of researching products online and then going to a brick and mortar store to buy those products.

For brands, this means that advertisers need to ensure a full omnichannel strategy. It is vital that brands are online while consumers are discovering and researching products, so consumers are familiar before they purchase in-stores. However, it is important to remember that even though research online and purchase offline is real, brands need to be present when consumers do, in fact, decide to purchase online. Whether consumers purchase online at a retailer, social platforms, or in a brick-and-mortar store, the brand needs to be present throughout the entire consumer purchase cycle.

For example, if your brand is running a TV commercial through broadcast, advertisers need to make sure they are promoting through social platforms, present on Google when consumers look for the brand and ultimately have sponsored listing and banners on the retail site. This ensures that a brand is present throughout the entire consumer journey; from awareness all the way down to conversion. If you aren’t, someone else will.

It’s no surprise that with a more environmentally conscious mindset, consumers are going green. According to Statista, “26.6 million Germans are somewhat willing to pay higher prices for environmental-friendly products. Another 23.6 million people are mostly willing to pay premiums for green products, and over six million are fully willing to pay these premiums.” Meaning that brands that align to this same consciousness, have a competitive advantage over those without a cause. The typical German consumer looks for more than just an online deal and a high-quality product, they are looking for a cause to support.

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German shoppers need a reason to listen to your brand. Be smart, savvy and stand out from the crowd to catch their attention with engaging content and visually appealing creative. Venturing into the German market will require a sharp, omnichannel strategy, but capturing the attention and loyalty of these consumers can pay off in big ways for your brand.

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