German Zeitgeist – Episode 2: German Digitalisation
While Germany is still considered Denmark’s favourite trading partner, a successful expansion to this market with its 82 million consumers requires that you embrace the invisible differences between the two countries.
This series will shine a light on the current status of key topics for Danish businesses in Germany. We have gathered some of our most important first-hand insights as native Germans living in Denmark.
When it comes to their personal data, Germans are very sensitive about providing their information to you as a company. This applies to both foreign and German companies. As a general rule, you can expect that the older your target group the more sensitive they will be about their data. Common areas where this becomes an issue are online shopping, checkout sites or digital contact forms on your website.
Providing more transparency and explanation than you are legally required to and showing why you need to collect this kind of information is often an effective approach to gain the necessary trust from your German audience to generate leads, subscribers or customers. Also, giving your audience multiple options to choose from can be a good solution. As some are way less sensitive about providing their email address than they are about providing their phone number, for example.
The differences in used payment methods between Germany and the Nordics are still a huge topic. Germany does not use MobilePay, however, PayPal has been on the rise for many years now, especially with young customers. In general, Germany has to be seen as way more old-school when it comes to payment. In physical stores and shops cash is still the preferred method of most German people. It is not unusual to even find shops where no card payment is accepted.
For online purchases, you should make sure to also offer SEPA bank transfer as an option and not only credit card payment. Also, services like Klarna have gained popularity with German online shoppers.
In general, it is safe to say that many Germans will be willing to sacrifice some convenience in the payment process if they perceive the less convenient option to be more secure. Again, this is especially true when you are dealing with an older customer segment.
Inside German Companies
Digitalisation in German companies is not at a comparable stage to Scandinavian businesses. Many practices in German offices are still analogue. For instance, archiving documents as print outs or using telefax for sending documents. Email use is very common for general communication in and between companies, however, official letters are still sent via physical mail as Germany has no equivalent to e-Boks.
Internal software systems are often running on less dynamic and less automated systems compared to Scandinavia. Many places, you will find manually maintained Excel solutions. This aspect is, however, heavily dependent on industry and company size. Young German start-ups are also using the technologies and systems you might be familiar with from Scandinavian companies.
As for business networking platforms, LinkedIn has become very popular in Germany. Unlike in many other countries it is not (yet) to be seen as the one and only major platform though. Besides LinkedIn, the German platform XING has approximately as many active users as LinkedIn does in the German speaking region. However, XING is currently growing slower than LinkedIn in Germany. So, if this trend continues, LinkedIn is likely to become the clear number 1 business platform for German business audiences.
Looking at the German public sector, it is important to bear in mind that Germany is divided into 16 states. This makes Germany-wide digital solutions harder to implement on a national scale. A result of this is, for example, that Germany has up to this point still not established an equivalent to e-Boks or even a centralised, digital CPR register. Therefore, official letters from authorities to citizens are still sent by physical mail.
Compared to Danish digital infrastructure of public authorities, the processes run a lot more analogue and decentralised making it less dynamic and less efficient. Compared to the German private sector, the overall digital uptake happens a lot slower.
This current status opens up plenty of opportunities to implement Danish best practice in both the public and private sector. Digital solutions made in Denmark can in many areas be an effective accelerator of the digitalisation process in Germany.
What the Future Holds
Germany has realised that it needs to speed up its digitalisation efforts to not be left behind internationally. Also the German government is actively working on this issue – even using Denmark as a role model in many aspects. Different projects are already running where Danish expert groups are formed to teach German authorities the Danish way of digitalisation.
Looking at the German population, the major urban areas – like Berlin, Hamburg or Munich – can be seen as the forerunner in German digitalisation. They are speeding up the digital transition as innovative companies are mostly drawn to these areas and innovations are adapted more quickly here.
For more in-depth insights or specific questions regarding your own journey into the German market, you are always welcome to reach out to us.
We hope you got good value out of this episode for your German endeavours.