The COVID-19 pandemic affects us all. Even for (crossborder) companies, their survival is now at stake. Germany seems to be keeping the new Coronavirus reasonably under control. Nevertheless, business in Germany is virtually at a standstill. Nearly half a million German companies have requested short-time work for their staff. Consumers are also worried: research by Marktforschungsplattform Appinio shows that 37 percent of Germans are worried about the economic consequences of the corona crisis. Major purchases such as cars, TVs, vacations and phones are being postponed, but there are also opportunities. How can you grow in the German market just now? Where are the opportunities?
Products that score well at this time
(Working at home) and our leisure activities have changed dramatically due to the corona crisis. There are companies that benefit from the fact that most of Germany stays home. Examples are Exittoys, a company that sells outdoor toys, or Worktrainer, a company that facilitates working from home. There are also customers who know how to respond creatively. Online Plastic Group, which normally sells plastic sheets, has marketed a ready-made glass sheet. "Normally we supply custom plastic sheets, but now we have developed a standard shield product that allows stores to allow their cashiers and customers to pay securely online." And many more opportunities lie ahead. According to research by Germany's largest price comparison company Idealo, the closure of fitness clubs during this period increased interest in sports products by 2,740 percent. E-commerce is reigning supreme, as it could not be otherwise now that physical stores are closed.
Consequences and opportunities for your brand
How are other German marketers reacting to this situation? According to research by the Deutsche Marketing Verband (DMV), 74 percent report a drop in sales. 17 percent are holding out until Easter and 20 percent until summer. Two-thirds stop or cut marketing expenses. Some of these are shifting that budget to next year. That translates to lower cost-per-click through Google Ads, social media and Amazon marketing. The advantage for companies that do advertise is that the target market can be reached more cost-effectively. This is particularly interesting if you want to build your brand across the border. Because the German consumer is mainly digitally present at this time, social media is used intensively and there is more online shopping. There are opportunities here for companies that are willing and able to invest precisely at this time. Caution is needed here: consumers will mercilessly punish you if you make fun of the situation or do not handle it ethically.
Do you dare to advertise countercyclically?
Countercyclical budgeting refers to a method of budgeting that takes into account fluctuations in the business cycle. The reasoning is that in times of declining business cycles (i.e. falling sales), advertising expenditures should fall less or more slowly than sales. This prevents sales from falling even further, a disadvantage to the percentage of sales method. In times of store closures, you can use the marketing budget for online sales and build on your presence on Amazon. Well-known Dutch brands such as Vingino, FatBoy and Brabantia are already applying this strategy. You too can use this economic climate to gain ground. There are currently opportunities for new companies to gain market share.
What if your German company needs help?
If you have a German GmbH, you can receive compensation for labor costs as a German company under certain conditions. Employers in Germany can apply for benefits (Kurzarbeitergeld) from the German UWV using the German short-time working scheme. A condition is currently still that the employer is based in Germany. DNHK is currently working to make this benefit also accessible to employers in the Netherlands who pay social security contributions for their staff in Germany. Let us know if we can put you in touch with the right contact person at the DNHK.
