eTail Germany 2021

09 - 11 March, 2021

The InterContinental Berlin

+44 (0) 207 368 9573

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The 3 key challenges retailers should prepare themselves for in 2020

By: Julie Diebold

The German ecommerce retail sector is growing at an unstoppable pace, reaching a whopping US$70,345m in 2018. According to Trading Economics, the industry’s revenue rose by 1.2%, month on month since June 2018 and is expected to grow by 6.2% this year. This significant rise has been attributed to Germany’s strong economy whereby employment rate and wages have hit record highs. Demand has therefore grown exponentially, exacerbating competition amongst online retailers who feel pressured to constantly rethink their strategies and services. Brick and mortar retailers have also had to keep up with ecommerce tycoons by maintaining low margins. In this new changing digital landscape, what are the most important challenges German retailers face on a daily basis?

1) Tailoring user experience

With big ecommerce giants such as Amazon and Alibaba taking over the global marketplace, independent retailers need to constantly step up their game to become more relevant to their customers. This means creating a personalized user-experience that truly resonates with the buyer. With pressure to achieve positive consumer ratings continually increasing as they become a determining factor in the customer’s buying decision, retailers have had to find ways to create genuine relationships with their customers to keep them coming back.

2) Leveraging AI to enable relevant customer research

AI is a hot topic in the ecommerce industry. It can help retailers collect valuable data that’ll give insights into customer profiles and behaviors. This enables companies to make necessary adjustments that might drive new conversions. However, retailers are concerned that the new GDPR law might get in their way, hindering access to quality data about their customers.

Another issue lies in the analysis of the data itself: being products of defined environments, the interpretation of data can easily mirror our own biases. Therefore, although AI is taking over, marketers should ensure that the data collected is free from preconceptions and useful enough to serve the needs of the business and consumers.

Making use of a current database in the most effective ways is yet another challenge retailers face. Although this seems obvious, most retailers focus largely on converting new customers, disregarding the value of their existing database. This can quickly lead to revenue loss.

3) Strong brand positioning

In order to communicate their brands’ values and products effectively, retailers need to differentiate themselves from the wider market. Brands can position themselves by diversifying their offerings to current demands. Large eCommerce retailers such as Amazon have already started to offer same day delivery, as well as real time order status updates, in a bid to do just that. Elsewhere, food retailers have had to reinvent their products and strategies to appeal to an increasingly more environmentally-conscious customer base. With growing demand and new players in the expanding Vegan, Gluten free, Free trade and sustainable product markets, retailers constantly need to react to trends and changes to ensure they continue to meet customer preferences.

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