E-Commerce in Germany

Germany's market potential: most internet users in Europe

Germany is home to more internet users than any other country in Europe, with more than 66 million active online users (almost 94 percent of the total German population aged 14 years and older). Online shopping is widespread – and not just among younger members of the population.

While close to 100 percent of the population between 18 and 49 years of age use the internet, the share of adults aged 50+ who surf the web is also increasing dramatically. Ninety-one percent of people 50 to 59 years of age use the internet, while around 60 percent of all adults aged 6o years of age and older are online.

The last two groups are of particular importance for retailers as they constitute the age group with the highest purchasing power. The pandemic has brought even more people behind their screens – both mobile and stationary devices – to shop online.

Rising online shopping spendings

Seventy-five percent of consumers in Germany have made online purchases in the last month, of which 43.6 percent have made a purchase within the last 7 days (41 percent of this group have ordered more than once in the same period). The purchasing frequency among these shoppers has increased by 23 percent in comparison to 2019.

The average shopping basket online grew by almost 20 percent to EUR 144.25 in 2021. On average, EUR 207 is spent online each month. The 30-49 years of age group spends the highest amount online. Electronics and travel are the two categories where consumers spend most online. 

Factors affecting online shopping satisfaction

Some 96 percent of customers are satisfied or very satisfied with their online purchases (including services including delivery times, payment options and customer service)

Price and free delivery are the most important factors for consumers in Germany when selecting an online shop before personal positive personal experience and free returns. Customers in Germany are very price sensitive as three of the top three factors for choosing an online shop are price related.

Consumer behavior during the Coronavirus pandemic

Forty-three percent of consumers have increased their online purchases since the start of the coronavirus pandemic – of which nearly 90 percent will continue to do so to an increased degree. Fifty percent of consumers have invested more time in shopping online since the start of the pandemic. This is particularly true of the 60+ age group that has dramatically turned to online shopping during the pandemic. Despite lockdown eases, these silver surfers plan to continue to shop online thanks to their excellent online shopping experiences.

Payment preferences

Online shopping is typically credit card driven, but Germany also proves to be an exception in this respect. In Germany, just 11 percent prefer to pay by credit card whereas almost 30 percent prefer to be invoiced for their items (i.e. invoice that can be settled from bank current account). The proportion of shoppers preferring this method of payment increases significantly according to age and gender but the price of the item and the likelihood of a return also plays a role. Online payment systems (e.g. PayPal, SOFORT Überweisung and giropay) are as a consolidation directly behind payment on account (28.2 percent).

Payment method as crucial

Method of payment in online shopping has become an increasingly important component of e-commerce. A majority of online shoppers cancel their online order because their favorite payment method is not offered - meaning future businesses who utilize multiple payment methods will most probably enjoy a competitive advantage.

In B2B e-commerce, payment by invoice and PayPal are the preferred online payment methods.

New logistic complexity

With a highly developed logistics infrastructure of 3,500 courier companies and 60,000 logistics service providers, Germany remains an ideal location for companies looking to provide online and multi-channel services. This concentrated network also makes services such as same-day delivery more calculable.

Parcel service providers are facing new challenges as a result of the e-commerce boom and accompanying developments. Increased B2C traffic has resulted in higher total shipping costs as deliveries become more decentralized with smaller quantities per stop.

Return champion Germany

Another important factor affecting these rising shipping costs is the rate of returns experienced by many online shops. Germans are returns champions: 15 percent of items sold online are returned (corresponds to one in seven orders). According to the German Federal Association of E-Commerce and Mail-Order Trade bevh, 75 percent of online companies offer free return to their customers for competitive reasons.

Customers expect free delivery and free returns which explains partly why customers in Germany make use of this possibility. In comparison, the return rate in the UK, France, the US and other countries is half or less of the return rate in Germany.  A recent study shows that an increasing number of consumers in Germany do not plan to return purchased items for environmental reasons but that certain items (e.g. fashion items) are more prone to returns than other products (e.g. electronics). The payment method selected is another factor of a potentially planned return, with Rechnungskauf (purchase on account) often indicating higher likelihood of a return.

Returns management challenges 

Return management represents a significant e-commerce challenge. Some 44 percent of retailers have admitted that returns have increased to such an extent that they put pressure on their business.

Despite increasing e-commerce turnover, many online shops record low profits due to the high costs of returns. According to Bitkom, one in seven orders is returned. Even though the return rate is 10 percent or lower for certain retailers, specific product groups – including fashion, textiles and shoes – experience higher return rates of up to 80 percent.

As a result, companies that are able to provide accurate product descriptions and visual representations with the help of AI, big data and virtual reality tools will most likely experience a significant comparative advantage in the online market place due to reduced return costs.

Job market opportunities

According to a survey by the German Federal Association of E-Commerce and Mail-Order Trade – bevh, two thirds of recruitment consultants expect more and more applicants to pursue careers in online and multi-channel businesses in the coming years. Because the internet is becoming more common as a sales channel, graduates - including those without a computer science-related degree - have a plethora of opportunities in this industry sector. Graduates with degrees in marketing, management, business engineering, and even graphic design can find themselves with a rewarding career path in this field. Germany's e-commerce industry is expecting rising applicant levels from these areas of expertise within the next years.

E-commerce training programs 

The demands placed upon e-commerce professionals are increasingly less technical and more business and marketing based. Moreover, e-commerce career entry points are incredibly diverse thanks to the young nature and new fields of activity in e-commerce. The requirements placed upon prospective employees can vary significantly. The number and range of market players in e-commerce is constantly growing: from mail order companies and specialty suppliers to auction and price comparison platforms.

Accordingly, e-commerce offers numerous career opportunities including online shop manager, content manager, online marketing manager and affiliate manager positions to name but a few. Online retailers and industry associations also promote young talent: the industry association bevh introduced a new E-Commerce Kaufleute (“E-Commerce Merchants”) training program in 2018.

Demand for the new profession in the economy is high. More than 80 percent of online and multichannel merchant members of the bevh plan to train e-commerce professionals – for trade with both end customers and commercial clients. These training programs merge knowledge in the specialist fields of informatics and economics and provide e-commerce with a versatile and growing pool of well-educated young talent.