Do you have a stationary shop but no presence online? If your answer is yes, you need to reevaluate your business model to ensure your growth and success in the ever-evolving world of commerce.
A new study from Handelsverband Deutschland (HDE), the umbrella organization of the German Retail Association, showed that many medium-sized retailers in Germany are still struggling with the challenges of digitization.
65% of 850 retailers polled by the trade organization said they don’t have an eCommerce store, only 26% of them are selling through their own online store, while 16% of them are selling through online marketplaces like eBay and Amazon.
As for the reasons that hinder them from digitization, here are their answers:
- Data protection / data security requirements (42%)
- High Investment Requirement (41%)
- Legal risks such as warnings (34%)
- Lack of knowledge of their own employees (31%)
- High costs of new customer acquisition and customer care (28%)
- Technical infrastructure in the company (19%)
- Difficulty finding proper service providers (16%)
- Too slow internet connection (15%)
- Sales restrictions of the industry (8%)
Stefan Genth, managing director at HDE, says the complex data protection requirements are discouraging businesses from moving to digital, and that there’s a need to review the regulations at EU level. He further explained:
“The new EU Commission must design the regulations in a practical way and not further complicate the situation. Digitization enables more competition in the EU internal market. However, this must be fairly designed. Therefore, companies that have headquarters outside the EU, but operate in the EU, should follow the same rules and obligations that are applied to companies from EU Member States.”
Don’t be invisible to customers
HDE forecast that 2019 will see retail sales in Germany increase by 2% to €537 billion euros, which is higher than last year.
eCommerce remains to be the main driver of this growth, with revenues from online retailers increasing by around 9% to €57.8 billion euros. On the other hand, total sales in physical stores will grow by a nominal 1.3%.
Even though the situation of the country’s retail trade is looking up, the pessimism of small and medium-sized enterprises who don’t use the internet as a sales channel drags on.
However, they can’t let their uncertainty get the better of them and have to eventually consider digitization for their business. If they don’t, Genth says:
“Those who are not represented online today, no longer exist for many consumers. Customers expect to find the retailer in the pedestrian zone and online.”
Does your business exist to your target market? Let us know in the comments below.
As always, to your continued success,
Dave & Matt