GfK: German Consumer Climate Increases Again

The Gesellschaft für Konsumforschung (Society for Consumer Research) found that economic expectations are on the rise again in Germany.

A strong domestic demand and low inflation rates in the last months have caused the Germans to be more willing to spend their money for consumer goods. Evidently the consumers are currently primarily seeing the extremely robust domestic demand trend when assessing Germany’s economic situation.

The economy as a whole has noticeably lost momentum in the first quarter of this year. According to preliminary data from the Federal Statistical Office, the gross domestic product only increased by 0.3 percent in the first three months of 2015 in comparison to the previous period. It was still 0.7 percent in the last quarter of past year.

Continuing tough negotiations between Greece and the EU to determine if further financial assistance will be given to avoid bankruptcy for the southern country still do not seem to have a lasting impact on consumers.

Private spending is a key driver for economic growth this year. However, existing risks still must not be forgotten. Tough negotiations on the future of Greece in the euro area, the Ukraine crisis, and IS terrorism could noticeably dampen consumption in Germany, according to the GfK.

These findings are extracts from the “GfK Consumer Climate MAXX survey”, which is based on around 2,000 consumer interviews conducted each month on behalf of the European Commission. The GfK Consumer Climate survey has been conducted since 1980.

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Fleuroselect Declares 2015 as Year of the Sunflower

The international organization for the ornamental plants industry, Fleuroselect, is calling 2015 the “year of the sunflower”.

This marketing campaign is geared towards home gardeners and is supposed to promote the use of sun flowers in private gardens. Fleuroselect is hoping to increase the sales of seeds and plants for producers, suppliers and retailers. The sunflower campaign will be promoted in all major European countries during the main selling period in 2015.

Campaign supporters have the possibility to use a range of marketing materials: A “Year of the sunflower” logo, available in English, German, Dutch, French, Italian and Spanish can be used as stickers for seed packaging or plant labels. Fleuroselect also provides a library with sunflower images, an instructional “how to” video for planting sunflowers, website banners, press releases and a range of point of sale materials for retailers.

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Digitalization of the POS: Varying Consumer Acceptance in Europe

The digitalization of the trading environment has a growing influence on the Point of Sale. Because of new technologies, retailers are now able to provide services that can theoretically offer additional benefits to the customer and the vendor alike.

For two years now, the large German drugstore chain dm offers an electronic receipt (E-Bon) to its customers. Customers with a payback card can sign-up for the E-Bon service and will receive their receipts via email after paying at the register. But according to the German newspaper Süddeutsche Zeitung, as of September 2014 only 11.000 customers took advantage of this system. The opinion research center IFH Köln surveyed several European countries and asked how people view new technologies at the POS. The results between the countries varied significantly.

People from the Netherlands rated the E-Bon as quite useful: They gave it an average of 6.8 out of 10 points. Customers from Spain (6.2) and Great Britain (5.7) gave similar results. The German customers however, don’t seem to see the advantages of this system (yet). They gave it 3.8 points on average.

A different system, the personalized receipt, which shows discounts and coupons based on the customers’ individual shopping behavior, has been reviewed more positively by the Germans: It got 5.7 points on average. A possible reason might be that the benefits of discounts and coupons are easier to spot. But the survey also showed that Spaniards (8.1), Brits (6.5) and Dutch (6.0) rated these benefits higher than the Germans.

Bettina Seul, division manager from the IFH Köln, explains the results like this: “German consumers are no innovation drivers; when it comes to technological developments at the POS they are skeptics. Technologies that need explanation, like the E-Bon, are not rated well yet. This means for the retailers, that the positive values have to be explained clearer to the customers. Testing out something new without seeing the direct advantages doesn’t seem to work for German customers.

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DIY Market in the EU: Size of the Market Declines 2013 by 1.2 Percent

Recent calculations of the IFH Cologne show that the DIY-market has again taken a slight decline in sales in the year 2013. The size of the market sank to 673 billion Euro. Only four merchandise groups were able to increase their sales.

Screws, flowers, bricks, lake pumps, wallpapers: Although the DIY market in Europe had trouble developing in the past years, the 27 member states of the European Union turned over 673 billion Euro with DIY merchandise altogether in 2013. Following a stable phase of growth, the industry had to take a setback due to the financial crisis in 2008/2009. In 2012 the sales declined again slightly and this negative trend continued in 2013 when the volume of sales dropped another 1.2 percent. The industry expert Christian Lerch from the IFH explains the negative trend: “The reasons for this development are the difficult weather of the past few years and the declining building sector in many European countries.”

With combined sales of 140 billion Euro in the DIY-product ranges – home building, construction materials and gardening – Germany is the most important single market in Europe: Over 21 percent of consumer expenditures in DIY were made in the most populous country of the EU.

Looking at the core product ranges in DIY, it becomes clear that there is almost no branch spared by the sales drop. With minus 1.8 percent the gardening branch – especially garden furniture and garden tools – took the biggest losses. The two other product branches, home building and construction materials had losses of 1.3 and 1 percent. Only four merchandise groups were able to increase their sales, the leading group was heating/air-conditioning.

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