Ecommerce in Europe, spotlight Germany #3

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The future of CPG growth is eCommerce. It’s time to talk through what it takes to win. Follow our expert discussions on digital commerce trends and take away thought-provoking, actionable insights on how to beat the competition online. The discussions are led by our host Julia Glotz– former editor and managing director at The Grocer and experienced podcaster herself. Each episode will close off with key tips and tactics leaders can put to the test to drive Digital Shelf growth. Enjoy listening!

Ecommerce in Europe, Spotlight Germany

For our third episode Julia Glotz is joined by Jo Campbell, VP Commercial Partnerships at e.fundamentals and Mark Nitschke Managing Director at TMS, a Frankfurt-based Point of Sales Agency, to discuss the rise of eCommerce in Europe focusing on Germany. While being Europe’s biggest consumer market after Russia it’s a laggard when it comes to online shopping, especially online grocery. So, why is that? What is driving consumer behaviour? And what do CPGs need to know to position themselves to succeed in this important and challenging market? Get your earphones on and tune in for actionable insights now.

📝 The Show Notes

• How the German retail landscape differs from the UK, why Mark believes it’s actually really hard to shop for food online with German grocers and the three main challenges that currently hold back Germany’s online grocery retailing growth (8:37)
• Local last-mile challengers and why convenience and fee-free shipping is to key to winning the last-mile war in Germany (14:07)
• The key indicators for eCommerce development, why it starts in urban areas and why AmazonFresh isn’t among the leaders (18: 15)
• The three core areas brands need to understand and prioritise if they want to win in German online grocery (21:43)
• How promotions behave differently online compared to in-store and how brands can take full advantage of the retail media available to them (25:44)
• Which organisational structures CPGs need to overcome in order to embrace eCommerce as an organisation and the tools that take the complexity out of making data-led decisions for growth (30:06)
• Some of the common myths about the German online grocery market and German online consumer that you Mark finds himself having to challenge quite frequently (31:12)
• Why it’s important for multinational CPGs to have both a local and global market approach which includes a local market expert and the importance of cascading best practice learning quickly across teams (34:27)
• Key shopper trends for Germany, but also globally, that our guests are expecting to be important in 2021 and strategies for shopper retention (39:26)
• Finally, the one actionable #22secondsmart tip for what it takes to win on Digital Shelf in Germany and around the world in 2021 (42:09)

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References, Links and People mentioned in this Episode

• Rewe, Edeka24, Aldi, Lidl
• Tesco, Sainsbury’s
• The Progressive Grocer
• Flaschenpost
• Picnic
• AmazonFresh
• UPS
• HelloFresh

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Abbreviated Transcript

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Thanks!

Please enjoy this transcript of our conversation with Jo Campbell, VP Commercial Partnerships and Mark Nitsche, Managing Director TMS Trademarketing Service GmbH.

Julia Glotz: Hello and welcome. Thank you for joining us for this episode of the Digital Shelf Cast. We spent much of our first two episodes looking at global trends in eCommerce and how these trends are playing out in the UK and the US. For this episode, we turn our attention to continental Europe and to Germany, in particular. Germany is a fascinating market from an eCommerce perspective: it's Europe's biggest consumer market after Russia, with a population of more than 83 million. But in many ways, it's a laggard when it comes to online shopping. This has proved true even during the pandemic in countries such as Italy and France, online shopping has increased dramatically as a result of lockdown. In January, ecommerce was growing by 44% year on year in Italy and 34% year on year in France, according to Nielsen. By the end of March, those figures had shot up to 162% and 56%. In Germany, however, shopping habits didn't change nearly as much. German shoppers have proved more conservative in their habits and just 41% say they have bought less in store, than they did before the pandemic.

The same is true if we look specifically at grocery. According to a survey by PwC only half of German online grocery shoppers say they bought more during lockdown compared with 70% of French, Spanish and Italian shoppers. So why is Germany so different. What are the key trends, driving German ecommerce, what's driving consumer behaviour. And what do CPGs need to know to position themselves to succeed in this important and challenging market. To discuss all this and more I'm joined by two digital commerce experts with intimate knowledge of all things German online retail. Joe Campbell is VP of commercial partnerships at e.fundamentals and Mark Nitschke is Managing Director of TMS, a point of sales agency based in Frankfurt.

Joe and Mark. Welcome to the show.

Before we delve more deeply into today's topic, I'd love to get a better understanding of your own online shopping habits. So tell me about the last item you purchased online, and why — Jo I'd love to start with you on that one.

Jo Campbell: Well I'm a bit of a big online shopper because I very much value the convenience, so I've been grocery shopping online for probably about the last 10 years. Most recently, apart from Christmas presents, the big change in my online shopping habits this year has been, I have got a puppy and normally when I shop online it's quick and easy: check the website, choose what I want, out. I don't read a huge amount. I don't really look at reviews I don't really look at a lot about the product. Since I got my puppy though she gets far more focus for me when I'm shopping online. So I really do look to websites to educate me around things like the nutritional value and food, whether particular snacks and choose the appropriate for the age that she is. And also look at some of the rich content that various brands are using to better educate naive pet owners like myself, I would say, I've really noticed a difference in the way that I interact with online stores when I'm buying something versus when I'm buying something from myself.

Julia Glotz: I think it's fascinating and particularly the point you raised there about having all that rich information that goes with making sense of a purchase not just the product and not just the convenience of the delivery but having everything that goes along with it as well. Mark, do you have a new puppy to do online shopping for and if not, what was the last item you've purchased online?

Mark Nitschke: I have a very old pack so it's not a young puppy anymore. So the last time I shopped online was last week for fashion items and non food items; so I obviously bought some small or minor Christmas presents due to cyber week. Living in Frankfurt you have actually nearly every store you want to have at your doorstep, due to the compactness of the city, but also during this pandemic when also due to convenience I mainly shop online, everything except for groceries. And I think this might bring us to another point then.

Julia Glotz: it certainly does it it's very interesting that you raised that point straight away that you do your non-food shopping online, but grocery certainly in Germany at the moment still has its challenges when it comes to eCommerce so why don't we delve into that in a little bit more detail.

Mark, I think particularly for listeners who are based in the UK, compared with retailers such as Tesco and Sainsbury's, Germany's big discounters Lidl and Aldi and retailers such Edeka and Rewe have been slower to embrace eCommerce than what we've seen in other markets. Could you just give us a sense of why that is, and give us an overview of the German retail market and the grocery industry in particular and he explained why it hasn't embraced online quite to the same extent yet.

Mark Nitschke: So I think that's a very good question in preparation for this podcast. I also made up my mind “okay why is that?”. I was browsing a little bit different online shops and just give you my intake on that in a couple of minutes but I think, first things first is that you have to compare the different retail structures in, for example, the UK to Germany and retail in Germany is slightly different depends on from which side you're looking at it, and you have a lot of stores that are centrally organised, which speaks for the discounters so they are centralised. So all the decision making is done in centralised organisation.

When it comes to Edeka or Rewe in Germany, you talk about two levels of engagement, a lot of engagement on store level in decision making power on store level or on multiple store level. And that might be one of the barriers to entry for grocery shopping, of course, so that's actually coming from the supply side brands, especially in the grocery segment delivery behind when it comes to the big traditional retailers so it's mainly smaller, more and more aggressive companies actually entering the market of grocery shopping online, I think we can just touch some of those in the latest stage of our talk here, but mainly it's a logistics game in my opinion and I think this is one of the main challenges so when I did some preparation in terms of grocery shopping online and I really tried, it's really hard.

So, I don't want to name all the names here but when you go to the discounters website, you actually can only buy non-food products. If you go on Edeka24, which is, in my opinion, the online grocery store of Edeka it’s for recurring customers only. So you have to enrol first, and that's a big barrier to entry. But Rewe, in that sense is doing quite well, in my opinion, so you can just either pick up and you can either get it delivered on the doorstep. But when it comes to commodities I think that's a main challenge when it comes to grocery shopping and the shopper herself is actually a challenge because I think that the German shoppers. Some of them are not quite ready for grocery shopping, yet because you really want to have the touch of the fresh theory, when they have the fruits in your hand, which you picked on yourself. I'm not sure maybe Joe can answer that if this is a big comparison or difference to the UK shopper. But these are my three main challenges here. Some of the brands. I think they are ready, because they are operating and cooperating with different specific online grocers already. Apart from the big traditional ones in the traditional logistics area and the hurdle they have to jump on, the shopper herself has to be educated on grocery shopping.

Julia Glotz: I think that's fascinating and you know you mentioned, Jo, I'd love to bring you in there and just give us a sense of how some of what Mark has described compares with what we have seen in other markets. When you look at Italy when you look at the UK, how have retailers and brands responded there, particularly since the pandemic how have they embraced online grocery in a way that's perhaps different to what's happened in Germany.

Jo Campbell: I think one of the big differences has been the severity or restrictiveness of lockdowns across different countries across certainly Europe. So if I think of markets like Italy, Greece, I think they had a similar consumer dynamic, and that consumers still prefer to go into stores and pick their own produce and, you know, kind of touch the fruit and vegetables and make it for themselves, because those markets have had stricter lockdowns than certainly in Germany. I think it's almost been the catalyst to shoppers having to trial online as a channel. And once they do those fears around, well if I'm not picking it myself it's not going to be as good, have basically disappeared. And so we see incredibly strong growth in markets like Italy, Greece, Spain where I know that was one of the shopper barriers that existed previously.

And I think it's interesting as well what Mark says around the actual kind of shopping experience in terms of the websites. There's a global study done by the Grocery Retailing Magazine in the US, looking at effectively the usability of different grocery websites across the globe and they look at the top 89. And I was astonished actually to say that there were only two German websites in there and they were both pretty far down the list, frankly, in terms of usability versus some of the other options. But what I did find particularly interesting is, where Aldi was on that list, and particularly in relation to Aldi in the US. So they ranked number 23. And I do think that one of the things that has slowed down the development of eCommerce in Germany has been strength of market position of players like Aldi and Lidl who typically haven't played in the online grocery space, because they're operating have smaller margins, and the margin dilution from moving from someone walking into a store and picking their own goods, where most retailers are operating offer kind of low single digit margin.

When you then start building in things like home delivery and a pick from store model, without the delivery fees that margin gain is going to be minus 15%. And even when you add in delivery fees, it's still in a low single digits in terms of a loss. But I think that, you know, serving players like Aldi are definitely experimenting with how they can mitigate the cost of the last mile. I mean in the UK they've increased their click and collect capability to about 200 stores, and clearly they're doing strong trials as well in the US to get to a position where they're 23 globally, out of all of the websites audited by this publication. And I think it is going to come to Germany, I think Aldi and Lidl are going to go online in Germany and I think that will be the big catalyst to the grocery market acceleration, because they'll call brands and CPGs to working with them to deliver that the likes of Rewe and Edeka will then need to respond. Amazonfresh obviously launched in Germany in 2017 so I think the wave is coming.

Julia Glotz: I think it's fascinating, what you said there about those impulses perhaps coming from other international markets into Germany rather than necessarily starting in Germany. One thing you did mention as well was the challenges around the last mile, and what we saw, particularly during lockdown in the UK but also in countries like France was recently retailers partnering with third party delivery services the likes of delivery Uber Eats in order to meet the huge demand for online shopping during the pandemic, but also to overcome some of those problems around the last mile. Mark, any sort of last mile partnerships or experiments we saw in Germany?

Mark Nitschke: We saw a strong increase in the last mile delivery coming from companies such as Flaschenpost which is translated to English messages in the bottle. So, they've been acquired by one of the biggest or one of the oldest German food industry companies yet. They gained a lot of market share during the pandemic. Especially because they are in the logistics game and if you look at them, they are actually a very specialised logistics company. If you want to win the last mile, and we as TMS are coming from the last mile business, the core of our business, you have to get your organisation straight and not saying that the organisation logistics organisation in traditional retailers is malfunctioning. It's rather the opposite, it's I think it's mainly the shopper.

So what happened in Germany during the pandemic is that the average baskets, and our grocery basket grew, obviously, of course, people started harvesting some of the specific commodity products. Maybe you heard about that?! But I think the main challenge is to really get into the convenience business here and when it comes to the last mile, it has to be convenient. In Germany today you have to pick the window and you have to be present at this window and I think that's the main challenge. Of course everybody was in the home office and it could have gained a little bit more than we all expected in terms of growth and market share, but I see that that's the main challenge. There are other other concepts as well, looking at picnic for example from the Netherlands. I think they're very successful as well and even though they're not available in every region yet. And the same goes AmazonFresh like Jo mentioned. They’re focused on a very specific and particular region, where they deliver and that's mainly in the urbanised areas, rather than in rural areas and I think that's the main challenge, but coming to last mile delivery, this is where the money is. And if you don't want to pay logistics fees, which none of the shoppers want, you actually abandon checkout and an online store if you have to pay in delivery fees for UPS or whatever. And so it has to be somehow coming with the whole solution and no solution or product. So it has to be some kind of more engagement also in decision making when it comes to choosing the products on the shelf and the shelf has to go online.

Julia Glotz: Really interesting in what you said about AmazonFresh there as well you touched upon that. They’re in Germany with online grocery but particularly focused around sort of large urban areas. Jo, from your perspective, what are the sort of key lessons that you think German grocers could potentially learn from what Amazon is doing in Germany at the moment is Amazon Fresh seen as having that leadership position within the market.

Jo Campbell: I don't know whether it's seen in Germany. But certainly, I mean I think it was a very interesting move they made in the UK to offer it for you to Prime members, and that clearly to help mitigate one of the concerns that Mark raised is around, people not wanting to pay extra to be able to benefit from the convenience of having groceries delivered to their front door. And I think that move will enable them to grow. Share quickly actually in the UK. And I don't know Mark if they've done the same thing in Germany.

Mark Nitschke: So I think that my personal opinion about Amazon Fresh is slightly different because when you look at a German, let's call it retail media, whenever Amazon has a new move or, that's something new, you get push notifications Amazon Fresh Start in Germany. But I don't see them as being like the leader, breaking into that market I rather see different solutions such as for example like HelloFresh. They've been on the market. They are really good in logistics. The other ones I just mentioned earlier, I think they are more or less paving the way for traditional retail to go online, rather than Amazon I think Amazon is a good juggernauts enemy player to focus on. But, in my opinion, smaller ones that actually really like choosing where this market is going, and that's the main of the freshness of goods, is the main challenge and acceptance of the shoppers themselves. You have huge differences when it comes to urban and rural areas. I think there's the same for the UK and can be compared to many of London and then you have to think so exponentially. When it comes to acceptance of online shopping in different areas. Isn't it like that?

Jo Campbell: It's very much focused around kind of the bigger cities. And there are some other key indicators in terms of ecommerce development around population density, number of women in employment, and also indicators around things like GDP. And typically you know across markets if you've got a relatively more affluent population, high population density and a high percentage of working women that tends to be one of the catalysts to ecommerce really accelerating.

Julia Glotz: Mark it was interesting to hear you say that, for instance, players like picnic like Flaschenpost, HelloFresh potentially have more of that leadership position than Amazon here in the UK, I would say you know a Ocado obviously also played a big part in driving forward, a conversation around online grocery. Is there a German equivalent to a player like Ocado someone instead of pushing that logistics piece and filming piece in a similar way?

Mark Nitschke: I'm not so familiar with the business case of that company but I think it is rather flush across it, it's not because I'm a big fan of them but it's rather than they see themselves as a logistics company and they started off with both products, and in commodities, but in their home market, which is, which is I think the area of Muenster. They are very successful in full assortment, and I think I expect them to go full assortment in other regions as well. So they are actually defending a huge market share there. Of course, due to the pandemic as well but I think they are the ones actually going forward. I don't see the benefit of the other players in the market that actually guarantee you direct delivery in 10 minutes which I don't see the added value to it. But when it comes to groceries itself. You want to have a convenience and I think convenience shopping was an assertion experience. Over the last two to three years, and it still is. So, grocery baskets are getting larger and convenience shopping has to grow that way.

Julia Glotz: And we've talked quite a lot about the various retail players and some of the last mile players in Germany as well. Let's turn to CPG brands and some of the opportunities and challenges that they need to be aware of. If you are a brand that wants to win in German online grocery. What do you need to get right in terms of strategy in terms of workflows in terms of organisational setup in terms of tools, and what are perhaps some of the pitfalls to avoid. Jo, if we could start with you on that. What do you think would need to be on brands list of priorities for 2021.

Jo Campbell: So I think I've kind of bucketed into three core areas in terms of execution which is: 1) are the products available, 2) are they visible 3) and are they delivering profitable sales to them, and to retailers. And I think, typically what we find is businesses or brands that are at the beginning of their eCommerce journey are very focused on content. And I would say to any businesses that are worrying about content, you've probably got quite a lot of catching up to do, because it's about a lot more than “Have you got the right product name”, “Have you got the right product image”. Globally they've been 150 million new online shoppers this year, and whilst yes the German market is not as developed as some of the other countries around Europe, there are still a lot of people shopping online within Germany. I mean, Amazon, Germany, turns over $16 billion. That's a huge sum of money.

It's also about making sure that products are visible. So, are brands winning the all important search battle, and making sure that they're visible. 95% of add to basket is from the first page within any retailer's website, and actually from the US I've read stats that say the top three search positions in Amazon, are 60% of the sales. So what can brands do to get their priority skews up that page one ranking, so that they can improve performance, and then availability has become a huge topic this year again as demand has fallen online. Some of the bricks and clicks retailers have struggled to maintain availability.

One of the big dynamics we see is actually the way that promotions behave differently online. In store, you can run a promotion from shelf and typically or get a 10 to 15% increase in sales replicate that same promotion online and you can get three 400% increase. Now in a model where the retailer is picking stock from the store, you very very very quickly create availability problems. And then a lot of retailers, they will then substitute in your competitor's brand, so that the shopper still gets what they need from the category. So effectively, you've got big branded manufacturers paying a lot of money to put their competitors' products into a shoppers basket, which then sticks in their favourites.

So, content yes is important because it's part of winning that search battle. It's also about making sure that products are visible, taking advantage of retailer online media, which is the equivalent of buying the gondola end around in a store, how do you replicate that for online shoppers. And then ensuring that they've got the right strategies in place to maintain availability and are doing that incredibly collaboratively with the online retailers. And then there's the whole element about pricing a mix because retailers as their business is shifting online is having a drain on their profitability, and they will invariably come back to the brands and ask them to fill the gap. So being proactive about understanding how they can maximise the portfolio to help do that, as opposed to having to just write a check and hand it over as part of the annual business planning negotiations. I think it's absolutely critical for these brands to really think about how they can do that. And then about how they resource that because a lot of those conversations are happening actually at the front line between the key account managers and the retailers. So how can brands upscale the broader organisation rather than just holding it in a centralised ecommerce function that typically looks at things like content, but not the broader commercial leavers which also need to be optimised to enable brands to win with retailers and to win profitably.

Julia Glotz: Mark you've heard Joe's list of priorities there, and her plea to not just focus solely on content and neglect perhaps some of those fundamentals around availability and pricing as well. What do you make of that and do you agree with the qualities she set out. Are they perhaps any other areas that you think brands really need to focus on.

Mark Nitschke: I think I'm fully agreeing with what Joe just said, and I just want to dive into one of those first education part of the brands and then behaviour. Looking at CPG companies, we've been working with CPG companies for 25 years plus. Most of our clients are actually blue-chip CPG companies, very skilled, very educated when it comes to sales, leadership, brand management, etc. But when it comes to eCommerce education within those organisations. They need some support, actually, for extending the workbench. In order to get a little bit quicker. Everything we do on the POS level is already very successful and it's already very strong and has great foundation but when it comes to for example key account management and I think the role of the account managers today compared to at least three to five years ago has changed completely.

And of course the most seasoned experienced key account managers they’re mainly responsible for the big accounts, which we just touched today, and they have not really an online presence. And the younger managers are responsible for eCommerce, if they have a key account management for eCommerce. I think that's also an organisational part of the brands. So, where do they locate the knowledge, and you just mentioned in the intro that you don't put it into the corner of eCommerce, I think CPG brands themselves have to embrace it as an organisation. There's a new key account account which is ecommerce, it can be multiple stores, can be coming from really small ecommerce specific delivery websites to huge platforms and marketplaces. And when it comes to marketplace management I think that's the challenge they have to embrace and really get into things moving.

Jo Campbell: And I think that's true, I mean if I worked for P & G for 16 years I worked at Kraft Heinz for a couple of years, and back when I was at P & G I was responsible for business with Sainsbury's, and Waitrose, and they were developing their eCommerce capabilities and wanting to accelerate and I grew up in CPG understanding how you impact sales in a physical store, you know, you go in and you build your displays you make sure that they've got the right products at the right place. And suddenly I was asked to also manage or lead the eCommerce business and I was like I haven't got a clue what I need to do. And it seemed quite complex, it's actually not complex, as there are very traditional drivers in an in store environment around price promotion assortment availability. When you look at eCommerce, you have to optimise all of those for the online shopper and online shopping occasion. And then there's only three other things you need to look at, which is, do you have the right content, or how are you performing in search and what shoppers are saying about your products that will also drive purchasing terms. I think there has been a tendency for people to overcomplicate it. And certainly, at e.fundamental our whole mission is about just keeping it simple and helping businesses understand how they act, the data they can get to drive sales performance because it actually doesn't need to be that complicated. And I think CPGs can help their teams, by putting the tools in their hands to help keep it simple. It's a huge vast data set, but with the right tools, understanding which are the highest value opportunities that will impact sales materially, and to deliver those actions can be quite simple.

Julia Glotz: Mark on that point of keeping it simple and making sure brands focus on what is really going to move the dial for them in terms of online sales wonder if we can just sort of turn it back a little bit specifically to Germany. Do you find that when you are talking to those big blue chip CPGs that there are certain myths, or misconceptions about the German eCommerce market, the German online grocery market, the German online consumer that you find yourself having to challenge quite frequently.

Mark Nitschke: So one of the biggest myths, to be honest, is that German online shopper is a laggard and really accepting very late. I think that's not true. So when you look at German online shopping and I mean we all heard the numbers, you have to differentiate between the categories obviously I mean when it comes to non food, it's very strong in my opinion. Of course it can gain a little bit more than the move we just had in the last couple of months and I think it will hold on. When it comes to grocery shopping I think the biggest myth is okay the brands can only act if the retailers get along with that. And I think one of the biggest discrepancies here is that the two levels of retail in Germany, and you might get a problem when you have a store level and counter and you're getting into some kind of cannibalization effect with the online store. that's actually happening at different retails right now. And I think the retailers have to overcome that hurdle themselves so that's one of the myths we need. But the brands. They shouldn't wait for the retailers to do the next move things they have to work along, and really engage with online retail and grocery shopping to pave the way for getting the availability to eCommerce grocery shopping for shoppers, as most of the marketing activities, you see online are not guiding to real action when it comes to shop here get that. It's rather brand image identity driven. And I think if these two departments, I mean that's the biggest challenge every CPG company has, having sales and marketing really work hand in hand. But when they overcome the hurdle of working in eCommerce together and that's, I think, one of the biggest achievements that could have actually for 2021.

Jo Campbell: I agree. I think there's huge opportunity for brands to get on the front foot, and how the German retailers, develop their proposition, and they will have huge influence and create competitive advantage for themselves if they do that, because then, as the channel grows if they're also growing share within the channel you get a multiplier effect in terms of the positive impact it will have on their business.

Julia Glotz: One of the things I'd really love your take on is something you touched on a couple of times that in fact basically you have as we've talked about some of the sort of organisational challenges, making sure different departments don't work in silos. How important do you think it is for big multinational CPGs to have a local Germany's specific approach to eCommerce, or do you see this as a market that could really benefit from having fresh ideas and initiatives imported from other perhaps more advanced e commerce mark-ups.

Jo Campbell: I think it's a mixture of both. And certainly when we're working with our global clients at individual market levels we facilitate them being able to do both, which is, how do these big CPG players cascade best practice learning quickly across different markets so that people can learn from each other, but also tailoring the approach to the individual market which will be different on think three kind of different factors.. And so, creating an environment where case studies best practice can be cascaded quickly really helps the markets that have less capability and less capacity, understand where to focus first to have the maximum impact, but it always needs to be relevant for the retail environment in that local market too.

Mark Nitschke: So, I think it comes actually with the description you just mentioned it’s multinational CPGs and even though the global brands they're operating on a multinational level with local decision making power and it has to be a syndicated model as Jo just said, between learning, and really adapting knowledge you gained in a different market in a different country adapting it to the local market, and having some kind of like a syndicated version of that. And it also depends on the extent on the headcount in those local headquarters of those multinational CPG brands, when they have decision making power they want to have German speaking or German market, understanding individual working with them on a day to day basis, I think, due to the last pandemic months the barriers between countries they lowered quite a lot. Everybody's on video right now, but you have to have knowledge of the German and the local market and that's why we see that CPG brands need to extend the workbench with local experts here.

Julia Glotz: And speaking of understanding the local market, Jo we've talked quite a bit about some of the priorities that are going to be relevant to brands in 2021. I wonder if you could just briefly touch on some key shopper trends for Germany that you are expecting to be important. Next year, though, a few trends that you could perhaps pick out that you think are going to be important for CPG brands to be aware of.

Jo Campbell: Yeah, so I think there's a few that I would call out. I think the first one, which is a consequence of what's happened this year is consumers are going to be increasingly price sensitive. I think there's no doubt that the pressure on consumers' wallets is only just beginning. And I think, you know, in Germany, but also other markets across Europe. I think consumers are gonna continue to look for ways to maximise what they can spend their kind of monthly earnings on. And so I think, you know, brands, being really clear on how they can help manage the value proposition across their portfolio of products is going to be really, really critical. And the second one I think is again linked to what's happened this year on the globe has left a huge imprint on everybody's psyches. And I think, again, consumers in Germany, and of course other markets are going to become increasingly focused on health. So things like healthy eating and also making sure that they've got the products in their house to enable me to keep it nice and clean. You know, we've seen PNG Reckitt Benckiser Unilever have posted astonishing financial results this year because the household businesses have grown hugely on the back of that trend starting. I think the next one sets parallel today is around provenance. I think again shoppers are going to be a lot more concerned with understanding the provenance particularly of food and drink products. And I think online has a critical role to play in that in terms of reassuring around the safety, and the robustness in supply chains and that the provenance is strong. And then I think the other trend that again will impact the kind of consumer goods spaces, people are eating at home or so I think retailers have a huge opportunity to help shoppers get a bit more creative with what they're choosing to eat at home, I mean I know we all have probably a standard bunch of about eight recipes that we rotate. And after however many months of not eating out as often, providing inspiration around meal ideas and out of feed your family in an interesting way for less money again is a big opportunity for both brands, and for retailers and online again is a great environment in which you can do that because it's more engaging and people might be prepared to watch a video recipe or spend a little bit more time engaging around, what are the different ingredients that I would need to make something slightly different, or more interesting for my family for dinner this week. So I think those are just a few of the trends that I think you know will be seen absolutely in Germany, but they're not exclusive just to Germany I think these are the trends that we'll see across the globe.

Julia Glotz: And Mark, are there any particular strategies that you think are going to be particularly relevant when it comes to retaining and re engaging shoppers who have perhaps tried online shopping for the first time, during the pandemic.

Mark Nitschke: I think you have to somehow lock shoppers in with great experiences you have to have a great experience online to shop again and we all know that from our personal shopping habits if you have a great experience and it's mainly about again about logistics so having the convenience of getting it's when you want to have it when it's an urgency. I mean grocery shopping itself is not an urgency it's some kind of a convenient shopping itself so I see one of the main comebacks actually is health in zero waste I think that lacked a little bit during the pandemic. Even the health is on Vogue, again, of course, it's you have to have products ingredients that count, you don't want to have ingredients that actually harm your body in a certain way that you don't want to get sick. And we also see that in trends, with some of the companies you just mentioned Joe is people are not on so much seacliff compared to the years before because they stay at home and they're not commuting for example, so I think that the main strategy is to concurrence having a great experience in shopping, and make them shop again, engage with them. Be present, and I think it's a mixture of different motions can be via mail it can be the direct search or direct engagement, and you have to actually meet the shopper, where he or she actually is happening and you see it on different platforms right now I think if you look at the platform, of course, everybody is looking at Instagram and what's happened there. But grocery is not happening on these platforms. But if you look at platforms such as Pinterest for example is doing tremendous work and getting brands actually engaged with their platform, and you have a lot of cooking recipes happening there and if you have availability to read shop directly coming from that platform. I think that's an interesting take that it could be a good nice strategy to really have the engagement and joy you mentioned of the shopping and working female people working in the UK compared to Germany for example, I think that, looking at Pinterest and things 70 to 80% of the traffic is coming from female users. And if you convert those users into shoppers. I think you can just gain a lot of movement.

Julia Glotz: It's a fascinating and very wide ranging discussion that we've had. We've touched on so many different aspects of getting your German ecommerce strategy right. If you have to distil, your advice to listeners to one essential piece of advice. What would you say it takes to win on the German digital shelf in 2021, and we'll call this your 22nd smart, Jo, what would be your one central piece of advice to our listeners?

Jo Campbell: I would say get on the front foot. Don't wait for retailers to come knocking at your door. Build your understanding. Build your expertise across the organisation, not just within a kind of centralised few people working in ecommerce, so that you can really be the thought leaders in your category, with retailers like Rewe an Edeka, because I'm convinced that the German discounters will start developing online offerings within Germany based off the learning they're doing in other markets. And so getting in front of that and really being able to partner with retailers to win is going to be critical.

Mark Nitschke: Brilliant and Mark, what's your 22nd smarts your one essential piece of advice to our listeners?

Mark Nitschke: So, I think I would accept everything that Jo just said. I think some of the brands are distancing themselves a little bit from their POS, or what's happening on their POS actually. And I think when it comes to winning that game, you have to engage, where you find your shoppers in this actually retrieving information, best practices lessons learned to have from the physical world and transferring them, put it a little bit on steroids maybe in coming to the eCommerce world. I think that's, that's the main takeaway here.

Julia Glotz: Joe, Mark. thank you for a fascinating conversation.