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Key takeaways

1 Families are changing

The “traditional” family unit comprising mum, dad and a couple of kids is no longer the typical German household.  More people are living alone, gay marriage has just become legal, and a large number of families have only one child. At the same time, the number of three-generation households is in rapid decline, and the number of adult children living with their parents has fallen by 18 percent over the past 20 years as young people strike out on their own. This all means that the nuclear family image so often used in advertising is losing its relevance, as are “family pack” special offers and family products that have only one kind of family in mind.


2 Make it snappy


German consumers are leading increasingly hectic lives, and they’re looking for products and services that make their lives just a little bit easier. The appetite for ready meals, take-aways and restaurant meals is rising, and shoppers are picking retailers that offer fast delivery options. This is a trend that’s being seen across much of Western Europe, but while this has led to a recent boom in small convenience stores in many markets – where people are buying food just for their next meal – this is not the case in Germany. Shoppers are still stocking up at big stores, but they want options when it comes to receiving their goods. Click-and-collect from stores is highly popular, and Germans make extensive use of locker-collection points for goods bought online. Deutsche Bahn is now targeting commuters with a pilot service offering 24-hour “BahnhofsBox” lockers, from where travellers can collect their dry cleaning and parcels, and – because some lockers are refrigerated – it’s also possible to have groceries delivered there.



3 Cash is still king


Despite being one of the most advanced economies in the world, there’s a strong preference for using cash in Germany, particularly among older consumers. European Central Bank data shows that in 2016, German consumers made around 4 billion transactions using cards – which sounds like a lot until you consider that in France, that figure was almost 11 billion and in the UK, 16.4 billion. Some of this is a legacy of the days of secret police monitoring people’s activities, and they therefore prefer the anonymity that using cash brings. Another aspect of the reluctance to go digital is that if they use online payment service – whether with cards or mobile payment platforms – people feel they are at risk of having their data stolen. Gradually this is changing, though; there is talk that Apple Pay will soon be available in Germany, and shoppers are warming to Aldi’s offer to take payment via smartphone.



4 Everyone loves a bargain


Most households in Germany do at least some of their shopping at a discount store, and for many, it’s their main destination for groceries. Germany is the birthplace of now-international discounters ALDI and Lidl, the retail brands that the world now associates with bagging a bargain. But there are other discounters here too, and between them they have created a shopper culture in which it’s expected that a great price doesn’t have to mean a compromise on quality. It doesn’t even have to mean a compromise on experience, now that many discounters are improving stores to make shopping there more enjoyable. A great deal isn’t always about the price, though. It’s about value, so make clear the benefits as well as the deal.



5 Health food is hot

There’s a widespread drive to pursue healthier eating habits, and not just as a way to counter the country’s obesity problem, which is significant, with World Health Organization data showing Germans are among the most overweight in Europe. Products that are low in sugar are therefore in demand, but consumers are also looking for more natural products rather than processed foods, so there’s an increasing call for organic food, gluten-free options and growing numbers of consumers are having meat-free days, with about half of Germans going “flexitarian”. More new vegan products are launched in Germany than any other European market, and Europe’s first vegan supermarket chain, Veganz, launched in Berlin six years ago. The German vegetarian society, VEBU, says about 10 percent of the population is vegetarian.


6 Exercise is also on the rise

In a related phenomenon in the pursuit of better health, Germans are increasingly taking up cycling, yoga and running – and they know they need to do more. Parents are especially concerned about their children’s health – the WHO says 80 percent of kids in Germany don’t get enough exercise – as traditional pastimes such as football get sidelined in favor of electronic games and other screen-based activities. Brands can play a role in helping people get fitter, even if they’re not directly involved in the sector themselves, although they need to be careful to be seen as genuinely helpful, not just trying to make money out of a national problem. The soft drink Fanta has set up 100 non-branded playgrounds around Germany to encourage more children to spend active time outdoors.


7 There’s altruism and it’s real


Many consumers have good intentions, but in Germany, people are putting their wallets where their intentions are, and are seeking out brands they believe contribute to a greater good. They’re prepared to pay a premium for a product or service that helps the wider community or the environment. This is driving demand for organic produce beyond food; people want clothes and skincare products produced without the use of pesticides. Concern about animal welfare is also widespread, recycling rates are high and car-sharing is on the rise. Linked to the desire to “do good” is the desire to buy local; goods that have travelled a shorter distance are seen as better for the environment and for stimulating the local economy. Bakeries are increasingly focusing on their organic (bio) ranges, and natural cosmetics brands such as Dr. Hauschka and Weleda are proving popular. Supermarkets are adjusting their range, too. Penny supermarket is selling “wonky veg” that other vendors might throw away, and others are promoting free-range eggs and locally produced items. The REWE supermarket chain has a particular focus on local fresh food.



8 Novelty has value

German people have always travelled extensively compared to many of their European neighbors, and now – thanks to their relative affluence and the rise of budget travel options – they’re travelling more often and to a broader range of destinations. They’re looking for something new, and their experiences abroad are driving demand for new products and experiences when they get home. There is keen interest in what’s new, and a desire to do something different.

9 Old is gold

Many brands focus on young consumers in the hope of winning them over for decades to come, but there’s an oft-overlooked generation of consumers that is active, have time on their hands and have money to spend on themselves right now. The baby boomers and their older cousins tend to be financially secure, with their own homes and a solid pension, and they are far more active than the older generation who went before them. They’re not just putting their feet up – they’re travelling, taking up sports, learning new skills and socializing. And those aged 60-plus are set to be the fastest-growing segment of the German population between now and 2030. They’re also online in big numbers, with around two-thirds of them connected to the internet. Many of them are already shopping online, and more could be convinced to try it; this is a market with a strong history of distance selling since the days before the internet, through catalogue mail order and telephone sales.



10 Social media is taking off, but it’s not universal


Social networking is popular: two-thirds of German consumers now use social networks at least once a week – a lower proportion than the average for northern and western Europe, though the number of users is gradually climbing. Among those who do use social networks, they are accessing, on average, between three and four social media platforms, with Facebook, YouTube and WhatsApp the three most widely used. Again, this is a little lower than in other markets. Facebook is used by 60 percent of people, YouTube by 46 percent and Instagram – the fastest-growing mainstream network – by 18 percent. Twitter is used by only 15 percent of Germans. While instant messaging apps are ubiquitous in many other European markets, in Germany, WhatsApp and Facebook Messenger usage is less than half of the online population. It is important to understand who is using each of these tools, and what they’re using them for, in order to adapt brand communications to the environment and be relevant.




11 Online shopping is big and growing


Already, 61 percent of Germans are shopping online, and a further 29 percent are considered prospective e-shoppers. But the shift to buying groceries online is happening at a slower pace than in other strong EU markets. Kantar Retail predicts that by 2025, 4 percent of FMCG shopping will be done online in Germany. This is not far behind the Netherlands, but a much lower rate than in France and the UK. The number of online grocery options is growing – and REWE’s delivery service is proving popular – but the cost of delivery is still putting many shoppers off making the switch. Only 6 percent of shoppers have a saved online shopping list, and the same proportion have enabled one-click ordering with a preferred vendor. Retailers looking to build the online part of their business need to make delivery quick, convenient and as close to free as possible.


12 Tastes are migrating

The number of people arriving in Germany from North Africa and the Middle East in the past two years – around the one million mark – has led to a change in the nation’s palate. New restaurants are popping up in Germany’s towns and cities to serve Middle Eastern taste buds, and food stores are expanding product lines to meet the demands of this new market. As Germany’s burgeoning migrant community continues to expand and integrate into society, the rest of the population is beginning to explore these new flavors and integrate them into their own diets. In the future, FMCG brands will need to consider the shifting tastes of Germany’s population in order to feed the desire for new flavors.


13 Don’t throw out ‘old’ media


There’s considerable excitement over what’s possible for brands to do in the digital world, and understandably so. But brands in Germany must guard against dismissing more traditional media options as obsolete; they are far from it. Newspapers are still a significant source of news for Germans, unlike most other markets, and TV also remains strong. Germans still spend the majority of their media time using traditional options, and more than 70 percent of German internet users can be reached by TV. In fact, on average, consumers here spend 3.7 hours a day watching a regular TV screen – even though they own an average of 3.1 connected devices. When they are online and using social networks, Facebook has by far the highest reach of all platforms, but Snapchat and Instagram are growing faster. All of these platforms can influence consumer preferences and decisions, not just the hot new ones.



14 Sharing has become a national sport


The “sharing economy” is flourishing across the world, fuelled by the rise of Airbnb and ride-hailing services like Uber. Enthusiasm for sharing services is especially strong in Germany, where views are changing around the importance of owning things and the role of communities. Car2go and DriveNow are widely used; ShareMyStuff is an online platform that enables people to do as the name suggests, while Ampido is a way of sharing parking spaces, and Kindoo lets parents borrow children’s clothing. Since 2014, the Ministry of Education and Research has been funding research into aspects of the sharing economy through its Sustainable Economy program. Building a brand in Germany right now means considering alternative business models that tap into the growing desire to make efficient use of goods, services and household income – rather than a wish to own something and keep it forever.



15 The young aren’t who they used to be


Differences between people of different ages affect not just which media they’re likely to be using and when, but also how they react to the brands they encounter there. Kantar Millward Brown’s AdReaction Connecting Generations 2017 research shows nuanced distinctions in habits and preferences between the very young, the quite young and the still young. Generation Z, aged 16 to 19, are the most likely to skip, close, mute or ignore online ads, but they are also most open to branded content, particularly user reviews, events, tutorials and expert reviews. Generation X, aged 35 to 49, are most likely to engage with brand-supplied information, but are hostile to many other forms of branded content, especially reviews. And Generation Y consumers, those in between, site roughly in the middle. The youngest German consumers are most impressed by the presence of a celebrity, and by special effects such as augmented reality, while humor and good music strike a chord with everybody. For brands, it is important to know that all of these young consumer groups are more willing than their counterparts elsewhere in Europe to give time to brands whose content they are enjoying. While others say their limit is 10 seconds, Germans are more likely to say they’ll stick with a message for up to 20 seconds, giving brands more time to develop a story.



16 Be engaging and honest


Experiment with new ad formats and branded content in innovative ways to be where consumers are. Always be honest at the outset about a brand’s involvement in what’s being offered. When there’s transparency, consumers understand the relationship and judge content on its merits, but no one likes to feel cheated when they discover later that the content they so enjoyed was sponsored. Kantar TNS Connected Life research shows that 22 percent of Germans enjoy content from brands on social media, and the young are even more enthusiastic than that. This is higher than in other northern and western European countries. And 20 percent of Germans think that tailored or personalized ads are a good idea. But with 28 percent saying they “often feel followed by brands online” execution is essential to get right. Consumers want entertaining content, information, the ability to ask questions and ways to share opinions.


17 Show the effect, don’t explain the spec

Consumers in this market are sophisticated and have grown weary of “buy now” ads or those that rattle off a series of features and claims of superiority. If people want to know the details of a product or service, they can look it up. The purpose of advertising in Germany is more about having a moment of engagement with a consumer that makes the brand and its offering memorable. Use emotion or humor to cut through the advertising clutter and make a real impact and demonstrate relevance. Coca-Cola told a powerful, emotional story of a truck driver called Mischa, accompanying him on a 2,000km journey, and surprised him with a family reunion at the end. The online film was seen over 7 million times in just 10 days and shared almost 60,000 times. The film linked to the brand’s motto, “spend more time together”, and the coke.de website enabled people to send vouchers to loved ones promising the number of special hours they would spend together.


18 Use authenticity to fight scepticism


There’s growing disillusion among European consumers about the brands they encounter, and few people describe brands generally as “honest and transparent”. But not all brands are equal, and brands that feel authentic to consumers can overcome scepticism, according to research by Cohn & Wolfe for its annual Authentic Brands ranking, called Authenticity 100. In its 2017 results, German brands adidas, BMW and Bosch are among the Top 100 most authentic brands globally (ranking 6th, 9th and 12th respectively), as they are seen as bridging the “authenticity gap”. Among German consumers, the brands seen as most authentic are Lindt, Miele and BMW. The most authentic brands get bought more and recommended more, and authenticity is unrelated to category or price; brands as diverse as Haribo and BMW are seen as highly authentic. Authentic brands aren’t immune from making mistakes, but their authentic pedigree makes them more easily forgiven if they make a correction. What authentic brands have in common is: They keep their promises on quality, they treat customers and their data well, and they communicate honesty and act with integrity.



19 Export excellence


The world has positive perceptions of Germany, German people and, by association, German brands, and this can be turned into a competitive advantage. German people and brands are known for their entrepreneurship, and this is a key ingredient of what’s known as “soft power” – a way of influencing world opinion in a subtle, persuasive way that is preferred over more traditional hard power measures such as financial and military strength. In BAV Consulting’s “Best Countries” ranking, Germany ranks fourth out of 80 countries in the world. It is respected for its technological expertise, its products are seen as prestigious, and it is a bastion of transparency and progress. The best German brands reflect well on what Brand Germany means to global consumers, and vice versa.


20 Think long term


BrandZ™ research over more than a decade consistently shows that the brands that consistently invest in communicating their strengths tend to ride out the ups and downs of economic cycles far more comfortably – and recover much faster – than those that don’t. Now is the right time to invest in building relationships with consumers, even for brands and products they can’t afford or can’t afford to prioritize at the moment. Levels of disposable income are rising, and the young people who might be short of cash right now won’t always be in this situation. Brands should foster familiarity and trust. They should plant the seeds of aspiration, and meet that aspiration with products and services that consumers need as their lives change and their ability to spend increases, whether that’s for something as simple as shampoo and biscuits, or higher-end purchases like white goods, jewellery or even cars and real estate. Talk to people now, and they’ll remember you when they can afford to buy.