Nina Trittruf und Laura Schiwek von Ketchum Pleon Berlin haben sich den Online-Lebensmittelhandel in Deutschland mal etwas genauer angesehen und mit Sebastian Diehl, Managing Director bei Emmas Enkel, gesprochen.

Ein Beitrag aus unserem internationalen Foodmagazin “Inspired by Food No.2 – Ketchum’s Tasting Notes”:

Tante Emma_groß

Nina Trittruf and Laura Schiwek, Ketchum Pleon Berlin, took a look at online food retail in Germany
and talked to Sebastian Diehl, Managing Director of Emmas Enkel.

Do you remember those snug, sweet, independent stores from grandma’s days that helped you out with flour, milk or soap? In Germany, these shops are well known and were called ‘Tante-Emma-Laden’ (Aunt Emma shop). Due to digital evolution, ‘Tante Emma’ evolved, and handed over the business to the younger generation. The food retailer Emmas Enkel (Emma’s grandchildren) is part of this generation and lets you order fast-moving consumer goods (FMCG) both in bricks-and-mortar stores and online.

Online retailers such as Emmas Enkel allow you to organise and browse through goods by, for example, category or theme boxes, or to get recipes directly from a picture. “Preselected boxes categorised by theme give people added convenience and inspiration. We provide our customers not only with a broad range of about 4,500 products, but also with some guidance,” Diehl explains. You can therefore order food while sitting on the sofa, regardless of opening times and with same-day delivery. Or what about ordering bags of food and recipes ready to prepare – it is the perfect way. Or is it?

Online food retail – an evolving market
Looking at evolving trends in Europe, e-commerce seems to be well on the way to leading business for FMCG, especially in the UK. But while online retail in non-food consumer goods already represents a fixed value in Germany, FMCG haven’t conquered any significant market shares yet. “The lack of supply and the lack of demand are often confused. If there is no one supplying online food retail, there won’t be customers buying groceries online. Ten years ago, there were endeavours to launch online retail, but the technology wasn’t ready. There has now been market growth of about 42 per cent in the past year alone. This is about 1 per cent of the total market, which is worth at least 200 billion euros. The German market missed the chance to build a business and has left the gap for others to occupy the niche,” explains Diehl. The market is nevertheless expected to grow by up to 3 per cent by 2020.

Traditional retailers (e.g. Kaiser’s Tengelmann, dm and Edeka) aren’t the only ones who are increasingly moving into the online market. Specialised meal delivery services are popping up like mushrooms, providing consumers with the convenience of premeasured regional ingredients tailored for two or four people to prepare meals at home (e.g. HelloFresh, Home eat Home and Gegessen wird immer). In addition, local and organic providers are moving into online retail with fresh produce preselected in boxes (e.g. Biobox and Bonativo).

Touch, see, smell or taste – the physical experience of fresh produce
is still important and is a barrier to e-commerce According to a study conducted by Statista in 2014, the reasons why people refuse to buy groceries online are, among others, a lack of offers, high costs, complicated delivery circumstances or a lack of confidence. But at 83 per cent, the most important reason is that customers can’t assess the quality of the produce before it ends up on their kitchen counter. “The only way in which to overcome this barrier is to build and maintain trust. Fruit and vegetables are in our top ten of the best-selling products. People understand that we provide a high quality and that they can rely on us and our services,” says Diehl. “Our relationship with customers is enormously important to us. Online retail is just one of numerous ways in which to reach the customer – the human level is still a decisive component of failure or success.”

Selling food online is a matter of multichannel communication
“For us, the combination of bricks-and-mortar and an online store is the perfect fit for customer needs and logistical considerations. First of all, fresh food can be compared neither to products that are totally digitalised such as music and books, nor to products that can be delivered and returned easily such as T-shirts and shoes. Fresh foods have an expiry date and need to be transported under certain temperature conditions. We therefore needed decentralised logistics to transport our goods in the best possible way without wasting coolant and packaging due to long transport distances. Another important factor is, again, trust. People know that the food they order online comes from a store nearby and that it didn’t have to be transported a long way from a central warehouse. With our bricksand-mortar store, we get in contact with our customers, we get feedback directly and do market research. In addition, we still have to face demographic change in Germany. Elderly people have the possibility of ordering their goods in our store and having them delivered right to their front door”, says Diehl. Online food retail is therefore no substitute for bricks-and-mortar stores; rather, physical shops and online retail coexist. In addition to being able to assess the quality of the products in a store, there are other reasons why
people prefer bricks-and-mortar stores, such as the shopping experience and the personal contact. On  the other hand, some categories are simply better suited to e-commerce, such as speciality product ranges, which can be offered with a greater selection online compared with in physical shops.

The silent generation and urban time savers
According to Nielsen, millennials followed by Generation Zers are the most avid online grocery shoppers and are the most willing to use all of the e-commerce options in the future. These two groups feel highly comfortable with technology, and online shopping is part of their everyday life. Emmas Enkel insights illustrate this trend clearly: “Our target group is above all urban people who want to reduce the time they spend grocery shopping. They simply don’t want to waste time in long queues after work any more. At the same time, these people won’t give up on quality or a broad range of goods.” Additionally, the silent generation (65+) is becoming more important: “We are there for elderly people who need a helping
hand doing their groceries and are no longer able to carry heavy grocery bags.”

Contrary to popular belief, online retail isn’t just a niche for urban areas. Emmas Enkel often receives requests from people living in rural areas, where there is a lack of deliverable goods that you normally
buy in retail: “Due to demographic change in Germany, there is a need for elderly people to have customisable delivery, especially in the countryside. I think it is increasingly important to fix this gap,”
Diehl says. “Additionally, we are convinced that there will be a shift towards little urban concepts like Emmas Enkel. Nevertheless, big discounters will remain a dominant factor in the market for some
time to come.”