With 10% of German online customers already having purchased cross-border and the total ecommerce market being worth nearly €50bn in 2015, the marketplace is already open to distance-selling. On the back of a strong catalogue shopping heritage, there is a well-developed B2C delivery network in Germany. Customer expectations are high with 14% expecting a 1-2 day delivery service but they are also open to collecting their packets from parcel shops or locker locations. Deutsche Post having 2,500 locations nationally provides good infrastructure for convenience and a wide range of delivery options to the customer.
For flexible parcel deliveries, Germans are more likely than other European markets to choose a parcel locker solution, such as Deutsche Post DHL’s ‘Packstation’, as their preferred delivery location, and as for returns, German businesses, such as Zalando, have set a high service standard – e.g. 100 day free returns – which domestic online customers now expect from any online vendor.
If goods are imported from outside the EU, import duties may become due based on the tariff classification, customs value and origin of the goods. The customs/VAT warehousing procedure allows the storage of goods without such goods being subject to import duties (neither VAT nor customs duties are due).
Fulfilling a customer’s order is the most physical representation of the merchant’s proposition. As part of the user experience, providing a potential customer with details of the delivery services on offer, including information about track and trace services used can improve conversion rates. The service offering is then further enhanced post-purchase by communicating the parcel number, link to track & trace the dispatch, email confirmation, push messaging (SMS/email) and as a self-service option in a customer’s account. These elements all help with customer retention; a good service will encourage repeat purchases.
Returns and exchanges are always at the forefront of a German customer’s mind. Clear information on processes and policies are expected. This information should be included in the help / FAQ section of the website, emphasised in automated emails and on delivery documents. Free returns are also expected by many customers, as a legacy of the catalogue industry. Return handling fees / restocking fees are not popular.
The standard VAT rate for importing items into Germany is 19%, with certain products, for example books, newspapers and magazines, attracting VAT at the reduced rate of 7%. VAT is calculated on the value of the goods, plus the international shipping costs and insurance, plus any import duty due.