eCommerce is currently booming. In 2017, revenues of 48.9 billion euros were generated online in Germany – an increase of 10.5 percent over the previous year. There is no longer a sector in which online retail has not yet arrived. The extent to which the individual product segments have now been penetrated by eCommerce does, however, vary. In particular, the sectors of Fashion and Accessories, Consumer Electronics and also Hobby and Leisure are very much present online and generate a large proportion of those total sales.
As regards the providers, it also becomes clear that a large part of German online turnover is distributed amongst just a few shops. The top three of Amazon, Zalando and Otto, for example, generated sales of around 12 billion euros in 2017. This corresponds to about 44 percent of the total turnover of the Top 100.
Concentration within the online market is therefore at a high level and is expected to increase further. And yet there are articles usually bought offline until now, with which online providers have since made the leap to the mass market. What makes these companies successful? They believe in online sales, are modern and are focusing on targeted marketing for their products. Today, we present two of these trend items that have conquered eCommerce in recent years.
“If I succeed in selling highly unique products through my online retailing, which at best do not exist on the major platforms, then I have a much better chance of doing business”, says Gero Becker, Project Manager at the Institute of Retail Research (IFH) Cologne of Deutsche Welle.
Digitisation of the mattress market
According to estimates by the Mattress Industry Association and the Textiles Trade Association, Germans spend about one billion euros per annum on mattresses. But this has rarely represented a shopping highlight for most consumers. So far, mattresses purchases have always taken place through dusty stationary retail. Younger companies, however, are now hoping to change all of that.
The pioneer in the online retail of mattresses is Bett1.de. With a new business model and a successful antitrust action, this young company broke into the market a few years ago. The Bodyguard – the name of the mattress from Bett1.de – has an entry price of 199 euros. Since then, numerous German newcomers such as Emma, Bruno and Muun, as well as the startups Casper from the USA and Eve from Great Britain, have followed suit.
The concept of these providers is to offer one single mattress model and usually only one degree of hardness that should fit all types of sleep. No annoying test outs and no huge selections. No expensive and non-transparent prices, too. The buyer also receives their mattress delivered free of charge, can try it out for up to 100 days and, if necessary, send it back free of charge. According to startup Emma, however, this only happens in rare instances, with the return rate at around only ten percent.
Startups like Emma and Casper, who mainly sell their products online, have succeeded in making mattress shopping “sexy”, according to Ulrich Leifeld of the Mattress Industry Association.
The business of “digital mattresses” also seems to be working. So far, the pioneering Bett1.de, according to its own data, has become market leader in German online retail for mattresses, with a turnover of 120 million euros and around 700,000 mattresses sold in 2017. Emma, the owner of Bettzeit, has generated sales of 33 million euros over last financial year. For the previous year, that figure stood at only 20 million euros.
Within their business models, these young companies are also picking up on the trend towards in-house brands. Until now, retailers in the mattress market, such as Matratzen Concord, have been better known than the brands they actually sell. Emma and Co., on the other hand, are not dependent on these brands at all – instead relying on new sales and marketing channels. The mattress has now become a cool product and its purchase for the customer uncomplicated. The traditional retailers can now only learn from this new approach.
The new way of buying eyeglasses
“Whoever thought that online glasses would not succeed, must also think that they can simply switch off the Internet”, says Dirk Graber, the founder and CEO of Mister Spex, in a discussion with WELT.
In 2008 – 10 years ago – the Internet glasses retailer Mister Spex went online. Meanwhile, this ‘grownup’, which now employs 450 people, is available in ten countries. Last year, the company generated more than 100 million euros. To date, however, it has only been profitable on the DACH market. “The other business units are expected to follow suit in two to three years’, according to a report by etailment. To offer eye tests and individual eyewear adjustments, Mister Spex entered at an early stage into partnerships with local opticians. At the beginning of 2016, the company then opened its first offline store, since followed by eight others to date. The online retailer Brille24, however, relies more on innovative tools for the sale of its glasses. There are online ‘try-ons’ and an interactive eyeglass consultant with whom the pupil distance can be measured. In addition, the Brille24 app will soon be on the market, making it possible to try on various glasses interactively in 3D.
Besides retailers like Mister Spex and Brille24, which also offer brands, newer eyewear startups are also advertising their own fashion products. These include the Swiss company Viu and the Dutch provider Ace & Tate, for example, which combine both online and offline retail in their business concept. What these companies have understood is that eyeglasses today are no longer just a visual aid, but also a fashion accessory. They think more like fashion retailers, continually renewing collections and scoring with consumers through unbeatable prices.
Established retailers such as Fielmann, on the other hand, have so far largely abstained from retailing online. Marc Fielmann, Chairman of the Group’s Management Board, explained that restraint with, “Internet eyeglasses are a spin-off product”. Admittedly, it was not then possible to assess eyesight online, to adjust glasses or even to center a lens. Completely ignoring the trend, however, is likely to become a risk to the optician sector, at least over the longer term.
Courage in an online niche pays off
In principle, it is much easier in online retail to secure a good market position within a reasonable timeframe when selling “unrivalled” products. But, nevertheless, a stable demand in stationary retail should already be in place. Just beware that, despite reduced online competition, fierce price wars are still not out of the question. In dynamic eCommerce, the competition never sleeps. And as already witnessed on the mattress market, the battle can quickly intensify.
Market and competitor analyses based on highly valid online data help you to quickly discover trends, niches and new competitors. This strengthens your brand and also your position in eCommerce.
Would you like to know how to use online data to remain competitive in eCommerce? Contact us now – we look forward to your message!