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Key Takeaways

Key Takeaways

The world is getting smarter

Consumers’ lives are already highly connected, but these connections are about to get smarter, with a growing number of German businesses saying they are already using or are exploring the potential of the Internet of Things, robotics and sensors, and smart services. The online networking of devices and objects – the Internet of Things – is already in use by over one-third of German companies, and more say they are exploring how they might deploy this technology. There is a high degree of consumer openness to this technology: one in three Germans can imagine they might one day use household robots, surveillance cameras connected to the internet, or app-controlled lighting and heating.

Some digital stragglers remain

The vast majority of German consumers are confident they can handle the constant changes to work and home life that digitization brings, but there is still a significant number – about 13 million people – who are classed as “digital outsiders”. These are people struggling to make the adjustment to new ways of living and what they feel is a constant pressure to keep learning. The outsiders tend to be older people, or those from lower socio-economic groups, and people living rurally. This is a high-tech country, without doubt, but brands need to remember that not everyone finds that equally easy.

No plastics, please

Concern about the perils of plastic are high among German consumers; Kantar research shows it’s the number one environmental concern in the country, and 76 percent of shoppers say they’ll choose something other than a plastic bag at the checkout. Bag use has dropped by a fifth in the past year, and retailers are cutting unnecessary use of other plastics, such as wrapping on vegetables. But watch out any brands that think they can get away with simply doing what they’ve always done. The environmental group Deutsche Umwelthilfe (DUH) has announced an “award” called the Golden Vulture to highlight the worst cases of wasteful packaging and is urging the public to make nominations via social media.

Out with the old? Not so fast

The time consumers are spending with digital media has put so-called old media in the backseat of many media plans. But Kantar’s Dimensions study shows that newspapers and magazines still have a strong and unique role to play for many brands. While friends and family are by far the most trusted source of information on products and brands, followed by fellow consumers on review sites, newspaper and magazine articles are significantly more trusted than blogs and vlogs and, are a long way ahead of advertising. Good old media relations might be old, but it’s still good.

It’s all just advertising

Call it what you like, but in consumers’ minds, sponsorship, native, product placements, branded content and straightforward advertising are all pretty much the same thing. The prevailing public view is that if they’re ultimately being sold something, then it’s an ad. This means brands need to ensure they speak with one voice across all elements of a campaign. And they need to ensure consistency across all communication channels, be it advertising, PR, websites, sponsorships or any other approach.

Stop right there!

The rate at which people are deploying ad blockers has levelled off at around half the population (21 percent always use ad blockers and 32 percent do sometimes). But that doesn’t mean consumers are rethinking their attitudes to advertising. The newer trend is ad avoidance; people are increasingly adopting solutions that enable them to cherry-pick the services and platforms on which they will tolerate ads in return for free access, and to pay to go ad-free when they want to.

Retargeting is a double-edged sword

The ability to have “another shot” at convincing a consumer to buy something you know they’ve been browsing has huge appeal, but too many brands are simply bombarding people with the same ads again and again – apparently in the hope of beating them into submission. There’s a fine line to be trodden here; consumers say they’re more interested in ads that are tailored to their interests than they are in random advertisements, but just over half object to being “followed” online by advertisers, and a large majority complain that they see the same ads over and over.

That’s private!

German consumers are like many in Europe in that they’re concerned about what companies know about them. When it comes to data privacy, there’s a growing awareness of just how much data is being collected by connected devices, the danger of data breaches, and the reasons behind the Europe-wide GDPR regulation. For brands, this means providing a clear value exchange when asking for personal data. Essentially, it needs to be worth it for the consumer in order for them to even consider sharing. Then, they need to be reassured that once you get their data, you’ll handle it with care.

Start your engines

This may be the land of high-performance petrol engines, but increasingly it’s also becoming a country of electric vehicles. The number of new electric vehicles registered last year was higher than in any other European country, as a surge in the number of public charging stations for electric cars makes it easier for motorists to make the switch. In the year to summer 2019, the number of charging stations rose by 50 percent, meaning there are now enough stations to power 30 percent of all cars on German roads. German carmakers are all releasing e-vehicles as consumers’ views on vehicle performance shift, and increasingly take into account environmental factors.

There are new ways of getting around

German cities are well known for being cyclist-friendly, and as more people look to swap motorized transport for something healthier and more environmentally friendly, bicycles and e-scooters are seeing a surge in popularity. E-scooters are relatively new to German roads, having recently been approved for use on the streets, and are proving not just to be a green transport option but also a fun one. Bike sales are also on the up, with a 32 percent rise in e-bike sales last year at the heart of a 12 percent overall increase in bicycle and parts sales – despite rising bicycle prices.

Convenience is key

In an always-on world, brands and retailers are finding they have to rethink how and when they are available to serve increasingly discerning and demanding consumers. The online supermarket group Picnic has expanded into Germany, and Aldi now offers home delivery nationwide on a product line that goes beyond what’s available in stores. Combi has also launched home delivery, via e-cargo bicycles, to shoppers’ homes. Lidl, meanwhile, has extended its opening hours and is now open until 10pm, matching Edeka, Rewe and Kaufland. Being open, being available and offering a helping hand is now simply expected.

Fair enough?

Consumers are looking for more from their produce than quality, value and respect for the environment. They’re also becoming more demanding when it comes to the fair treatment of people throughout the supply chain, and that’s behind a 22 percent annual increase in the value of Fairtrade goods. Bananas, coffee, cacao and roses were the categories enjoying the strongest growth, as sales reached €1.6 billion. Doing the right thing is big business.

Buyers want healthy choices, made easy

As consumers watch their health and their waistlines, they are looking for food products with lower sugar, salt and fat content. This is becoming easier as manufacturers and retailers adapt recipes to comply with new government targets on these nutrients, to take effect in 2025, but product labels don’t always help shoppers make informed decisions quickly. Brands that provide nutritional information in a way that helps people see what they need to know are well placed to be added to the shopping trolley.

Consumers are tackling meaty issues

German cuisine is famous for its meat, but consumers paying heed to their health and perhaps also their conscience are increasingly opting to go without, at least some of the time. No longer does it seem odd for an evening meal to be vegetarian, and growing numbers of people are declaring themselves vegetarian and vegan. Around 9 million Germans say they don’t eat any meat at all. This presents both a challenge – and opportunity – to brands in the food and hospitality sectors.

And treating animals with respect

Those consumers who are happy to eat meat and other animal products are increasingly demanding suppliers give animals a better quality of life. Free-range eggs have been rising in popularity for some years, and now Rewe and Penny are offering “Respeggt” free-range eggs, which are certified as having undergone a non-invasive gender identification test, which eliminates the need for culling of male chicks after hatching. Kaufland, meanwhile, recently launched Außenklima (outdoor climate) certification for its pork products, which means livestock has 40 percent more room to roam than is required by German law.

Trash is potential treasure

Recycling isn’t just for packaging and office waste; it’s now a highly sought-after source of new product ideas. adidas led on the use of recycled materials in new items with the launch of its Parley training wear, which is made of at least 75 percent upcycled plastic, and was promoted as a way of helping combat plastic pollution. Now others are looking at how they can use old materials in new ways, including the German coffee and homewares chain Tchibo. It has introduced a sports range made from ocean plastic, plastic bottles and textile waste.

Moments really matter

There are many opportunities for brands to find a way into people’s lives, even if an individual already has a preferred brand in their category, by focusing on distinct moments of consumption. In the coffee category, for example, a household might opt for a brand that broadly meets the needs of everyone in the home for their breakfast coffee. But for a mid-morning pick-me-up or drink in the office, individuals might consider something that meets their own unique preferences, and when sharing a coffee with friends, there could be a different brand of choice. Brands need to choose their moments.