1

Bavarian Retailers Prepare for E-Commerce

Online business is having a significant impact on inner city retailers – and Bavarian retailers are no exception. At the heart of the challenge: an increasing number of people are choosing a combination of the traditional shopping experience and the option of shopping quickly and easily online.

Of course, this poses a tremendous challenge to inner city retailers and the keyword “e-commerce” is becoming increasingly important. And this is exactly where retail business in Bavaria is on the right track: According to an updated study named “E-Commerce-Strategien für den mittelständischen Einzelhandel – Ausblick 2020”, which was conducted by ibi Research at the University of Regensburg on behalf of the Bavarian Ministry of Economic Affairs, the Bavarian economy has set its sights on growth. E-commerce has been experiencing an annual growth rate of 21.2 per cent since 2007. Depending on the respective scenario, the share of e-commerce could increase to up to 17 per cent (from 7 per cent in 2014) within the next five years. This equals a market volume of almost EUR 82 billion.

Pilot project in Bavaria

The State of Bavaria intends to support Bavarian retailers. To this end, the state has launched the pilot project "Digitale Einkaufsstadt Bayern" (Digital Shopping City Bavaria). The project is intended to bring cities and trade associations closer together with digital innovations. The objective is to provide customer offerings, shop-based retail and e-commerce from a single source.

The project, which is scheduled to last for two years, is to provide intense coaching and support by a team of experts for selected cities based on a demand analysis. Ultimately, the objective is to develop new strategies with the help of multiple partners, which – in case of success – can be applied to other communities Of course, exchange with other participating pilot communities is also important. Minister of Economic Affairs Ilse Aigner underscores the significance of the project: “Every company in Bavaria needs a digital strategy, even retailers. Digital innovations such as e-commerce are a considerable challenge. We are promoting innovative strategies to make Bavarian retail ready for digitization.”

Broad support

Retailers are also being supported by the Chambers of Industry and Commerce (IHKs), for example at the E-Commerce Day, held on 4th November in Nuremberg, during which successful e-commerce business models or options for retailers in setting up e-commerce business were discussed. Even retail entrepreneurs can obtain targeted assistance. Be it the IHK, the Bavarian retail trade association HBR, its management consulting firm for the retail sector BBE, or the Ministry of Economic Affairs – trained experts are ready to provide advice and support.

Recommendations for action

In its study, the Bavarian Ministry of Economic Affairs not only details the current status, it also issues recommendations for action for the future. These include, among other things, the selection of strategic sales options, the option of a multi-channel strategy and the decision for specific offline and online sales channels.

Shop-based retailers have a decisive advantage: the ability to provide customers with tailored advice and support through up-to-date and profound expertise. And fact is that customers will only find this unique selling point at their local retailer. The Bavarian initiatives are intent on making this advantage available to online business as well.