News from the German retail market week 25.

News from the German retail market week 25.

  • German retail market – Turn over week 25 -14%vs LY.
  • Online returns: German online companies working to push down their return rates.
  • New brand Reserved from east Europe and Poland is entering the German market.

Turn over week 25 = -14% vs. LY.

My thoughts on that: One less trading day on Monday in some parts of Germany affected the trade. The stores are displayed with heavy sales signs, but this didn’t help the trade. Since almost all summer items are on sales, the stores are soon starting to communicate a stronger pre-fall message. Important is to get a smooth transition from one season to another so you margins doesn’t fall too much. 


Online returns: German online companies working to push down their return rates.

The online boom in Germany is not surprisingly showing its side-affects through high return rates. A study with the 30 largest online companies done by the consulting company BearingPoint shows that the toughest challenges lays within return rates and inventory management. The study also shows that almost 2/3 of the asked companies prioritize and value core competences as: logistic solution including receiving goods and quality check, stock holding, consignment and picking meaning managing distribution, returns and sending goods.

Most of the companies also prefer to run this part of the supply chain within their own organisation and without external services. The advantages are better control over the product flow process and also more control over internal product and customer data information. This leads to lower product damages and lower costs.

One partner, responsible for the study, Matthias Loebich from BearingPoint points out that companies within the textile and clothing industry should put more focus on finding better technical solutions and to be more responsive to the demand. With the right algorithm you could optimize your demand forecast and stock levels. He also sees opportunities in improving the package and product descriptions to lower the return costs.

The study also shows that 69% of the companies who were asked admitted that their sites could be user-friendlier. For example, the shoe industry could improve their product presentation and visuals by implementing 3D-measurement technic to improve the fit and accuracy of the purchase. This will also give the company opportunities to collect import customer data.

My thoughts on that: I think this study is very interesting because I assume it is not just a challenge for the German companies but on an international level. The focus should not only be on the supply chain management (SCM) solutions but also on the site and product presentation which they are mentioning in the study, according to a simple cause and effect analysis.  Many of the companies that participated in the study are multichannel companies, which also means they have a choice of either work together with both sales channels or separate the online process within their inventory  management. 

One SCM driver that are mentioned here are the inventory management including product planning calculation, which goods are responsive and which is not and what safety stock level is right for us? A decent product categorization with: volume-based products, season goods and trend teasers could also make it easier to decide what amount to by on stock and on demand. What calculation tools you should use to optimize the demand calculation as was mentioned in the study could of course differ. It is depending on your complexity of product mix, % of change in products or services, storage location costs, supply chain locations, planning cycle and seasonal or fluctuation in demands.

The other driver that are mentioned is information system and I would also like to push for an intelligent information system that complements your ERP (Enterprise Resource Planning) and SCM system. The technique RFID (Radio Frequency Identification) is for many companies expensive to implement but gives you a very good stock update and a transparency in tracking goods (RFID 24-7). Which helps your inventory management planning.

As mentioned in the study, the product presentation and the user-friendliness are not to underestimate. The earlier you could prevent the customer from choosing the wrong size or product the better it is. Also think which options you are showing and that the product information will help the customer to choose the right items.


New brand Reserved from east Europe and Poland is entering the German market.

The company LPP SA is a Polish fast fashion retail company – selling clothes and accessories under 5 brands: RESERVED, CROPP, HOUSE, MOHITO, SINSAY. They will enter the German market with an online shop on the 1 st of July.

My thoughts on that: The competition is getting harder and especially in this segment, lower price segment, which offers 1-2 new deliveries per week to a relatively low price. They will challenge brands like H&M, New Look ,ZARA and Primark. If they also are going offline (physical store) I guess their first store will be in a shopping centre in one of the 10 largest cities.

Source: (

Infographic: Supply Chain Management


Trends within supply chain

Trends within supply chain