This week on Overdose & Chill Live, digital leader Daniel Höhnke from Overdose will be joining us for our fifth session to talk about supporting a rapidly growing portfolio of European and global brands.
#005 : Leveraging our highly-regarded global digital expertise in a country that has the largest economy in Europe and almost 5% share of the entire global economy, Overdose’s ongoing expansion is led by Managing Director DACH, Daniel Höhnke. Daniel supports a rapidly growing portfolio of European and global brands by establishing a local team of senior project management, development, CX, and marketing specialists to expand the global Overdose offering into the European market.
In the latest of our live Overdose & Chill Instagram interviews, our Group CEO, Todd Welling, chats with Daniel about the central European eCommerce market, its differences, challenges, and opportunities.
Daniel Höhnke
Daniel has spent 15 years working in German ecommerce and has run his own Agency for the past 9 years. He is pleased to be joining the OD team to spearhead its introduction to the German, Austrian, and Swiss (DACH) digital marketplace.
The German ecommerce Market
When asked if there is any appetite in Germany for international brands, Daniel describes it as a “typical Amazon economy,” with at least 50% of trade going through big online retailers. In fact, the top online stores are currently Amazon, Otto, and Zalando, which presents quite a challenge for any new brand wanting to break into this central European marketplace.
Using big commerce stores as a route to market can certainly make “fast money” in the short term; however, it is important to recognize that these consumers are more loyal to the platform brand than the product brand, so an enterprise will still need to initiate direct customer engagement and build trust via its own website and social media platforms if it is to have any chance of securing brand longevity.
Like all Europeans, Germans are heavily influenced by the American market and love to use Social Media platforms such as Facebook and Instagram, with the younger generation also embracing Snapchat and Tiktok.
The Generation Z consumer is just coming of age; now finishing their education and beginning to earn their own money, these citizens present a much different challenge for marketers than any previous generation. “Pre-digital” is a time talked about by their grandparents, and they live their lives very much in the moment, documenting and sharing their activities via video and photos on the latest popular Smart Apps. They are more likely to be environmentally conscious and as a result are inclined to question the value, provenance, and sustainability of any products they are considering buying. They may well be vegetarian or vegan and are likely to be more altruistic than their predecessors in their behaviors. It is already not unusual for them to purchase goods and services via social media shops and they will be more open to trying new selling platforms in the future.
Daniel believes that webshops are just one option for e-retail; Instagram and Facebook have led the way with their own shopping platforms and Generation Z presents a great opportunity for introducing additional shopping opportunities via messenger and other social media interfaces. The importance of ecommerce was highlighted right across the world during the Covid lockdown, and, likely, progress in this area will now speed up. Todd predicts that “the future of commerce will be based around where the transaction happens” and that the sales funnel will eventually be compressed to a single event. It is going to be an interesting journey!
Daniel shares that German ecommerce usually progresses a few years behind its American or British counterparts. For instance, where most of the western world has been using cloud-based solutions like Shopify for some considerable time, this has not been the case in Germany. Both men agree that new platforms find it exceedingly difficult and almost prohibitively expensive to break into and become established in a new marketplace. Yet, with the arrival of Shopify Plus, which is designed for larger enterprises, something in the mindset has shifted, and 2020 could well be the year that the cloud system will be fully embraced by the German market.
It transpires that Systems Architects in New Zealand still prefer to buy platforms that include a front end. They shy away from headless solutions for various reasons, including an increase in failure points and the additional costs and build time required for two separate systems.
On the other hand, German System Architects love the freedom to create bespoke front ends that can be tailored to improving user experience. Savings can now be made if a managed PWA such as Frontastic is used, which accelerates the build process and reduces systems maintenance costs to backend only.
Daniel explains that while the German marketplace is certainly open to new products, care needs to be taken by marketing teams to ensure that consumers are spoken to in their own language. He recommends using local influencers to market everything from fashion to garden furniture.
Post lockdown, the German economy is showing signs of recovery and Daniel looks forward to taking up his new role with Overdose Digital in Berlin where he will be focusing on growing strong relationships with carefully selected merchants supporting digital growth initiatives, alongside several major Overdose brands including Stihl, Scotch & Soda, Patagonia, Wilson, Heidi Klum, Samsung, Birkenstock, AriZona, Formlabs, Nespresso, and Marc Fisher Footwear.