GERMANY - Germans will be saying “Hallo” to their newest neighbor: Amazon. The company has announced that it has plans for brick-and-mortar stores in Germany, as it taps into the more culturally recognized traditional retail market.
“That’s not a question of whether, but of when,” explained Ralph Kleber, Germany’s CEO of the group, according to Berliner Morgenpost. "Customers love diversity online and in traditional retailing, which still accounts for 90 to 95 percent of sales in Germany, and we'll never forget what the customer wants."
While the company is embracing the strong attraction for in-store retail experiences with this new launch, Amazon’s new venture is almost mirroring its successful Amazon Fresh online grocery service by implementing a small-scale format. Amazon Fresh was tested for six years before making its way abroad, where it is seemingly thriving as Amazon’s brick-and-mortar stores move into town.
This isn’t Amazon’s first rodeo in the brick-and-mortar ring. The comany's first go-of-it in the storefront game was with its 12 physical Amazon Books stores located throughout the U.S. Further, it has had some time to acclimate to more stationary store formats with its $13.6 billion acquisition of Whole Foods in August, where customers can get their hands on Amazon products like Kindles and the Echo.
This shift looks to be working for the retailer, as it banked $1.3 billion in the last quarter from physical stores alone, and the funds, according to Quartz, mostly came from Whole Foods. In contrast with the retailer’s $26.4 billion online sales, this might not seem like much, but this is just the beginning of this transition.
Hamberg residents, Berliners, and Munich citizens have already had Amazon Fresh delivery services available to them, which has been a great start for the company, Kleber explained. In the same Quartz piece, he says that metropolitan areas are Fresh’s best bet, as they are efficient for the cities the service serves and also can provide learning data for the company.
"We try to find the ideal mix that we offer the customer later, which can also be a consistent delivery," said Kleber in the Berliner Morgenpost article.
What’s more, Amazon’s recent September launch of Flex will allow Germans to earn some extra cash by registering to deliver Amazon Prime orders for about $18-$25 per hour, Kleber explained. This seems a fitting delivery option for the company’s burgeoning German sphere, as customers within the country’s Amazon purchases amount to 25 percent of its online retail market, and between 2014 and 2016, the company’s German site has doubled its produce selection.
How will the introduction of this new store format leak into the German grocery and fresh produce marketplace? AndNowUKnow will continue to report as the story develops!
