German consumers won't drive-in
They love their mobile phones, pads and laptops – almost as much as their cars.
But your average hard-working Hans or Lieselotte Schmidt doesn't seem nearly so keen on click & collect pick-up points (drive-ins).
Dedicated collection points for customer online orders didn't appear at German food stores until November 2010 and there are still only around 40 of them: Edeka runs the most with 23, followed by Rewe (13), real,- (2) and Globus (2).
Customer frequency is generally low with focus groups and blogs criticising limited ranges and confusing websites. So why don't Germans shop when they beep?
Only 20 customers a week
Some Rewe drive-ins are said to make a mere 20 customers per week.
Even Germany's drive-in pioneer, "real,-", caters for only 65 to 70 visitors a day compared with 3,500 to 4,000 in its adjacent hypermarkets.
Despite a relatively high average spend of around €50 to €70, it is estimated that the Metro Group subsidiary would need at least 100 drive-in customers a day to break even.
Meanwhile, no other German multiple seems to be making any money with this new sales channel.
At first blush, German consumer reticence is remarkable compared with the very different situation in France. Nielsen reveals that approximately 2,000 drive-ins (stand-alone pick-up points & dedicated collection points at stores) have been opened since June 2000 on the other side of the Rhine.
Young French women
Their number is growing at a rate of around 90 per month, particularly in provincial towns. Apparently, their main customers are time-stressed young women. French ladies tend to order heavy, bulky items online and pick them up by car on the way back home from work.
So if Delacroix were alive today, he wouldn't paint a topless Marianne storming the barricades, rifle in hand. He would have to portray her behind a driving wheel with an iPad on the passenger seat.
Why do French and German consumers differ so much regarding the popularity of drive-ins when French and German retail structures are generally the most similar in Europe?
Probably the main reason is that store densities in France are considerably higher in Germany. Discounters are ubiquitous, with an Aldi and Lidl on virtually every street corner, so it is easy for consumers to shop offline.
Furthermore, the customer can navigate the relatively small sales surfaces of the German discounter far more quickly than in a big French hypermarket. So how much time does one really save by shopping at a drive-in?
A zero-sum game?
In a land of low net margins, local retailers are clearly not keen on increasing operating costs for a zero-sum, top-line game.
Seen from a purely German point of view, it is therefore hard to understand why around 15 highly-intelligent French players, and in particular the retailer co-operative Leclerc, seem so enamoured with this new sales channel.
Admittedly, the French drive-ins offer their customers a useful top-up service with estimated average own label shares of around 50 per cent. Doubtless, a certain number of knock-on purchases will also be generated in-store.
Hypermarket destinations, with catchment areas of 30km to 50km, can thus be made more attractive for customers without the retailer having to finance a home delivery service or cannibalise his store base.
However, drive-ins also mean extra capex and high picking costs. They also don't sell much in the way of high-margin fresh produce or impulse items. To date, neither French nor German retailers have felt able to charge anything more than the most negligible fee for this extra service.
So why are French retailers pushing the gas pedal? Clearly, legislation in its present form favours Drives. All retailers currently need is building permission and they are not subjected to the usual onerous store planning regulations. In October, however, the French government announced that this situation is under review.
Presumably, French retailers have also taken a strategic decision to invest in what they believe to be a future market segment.
But for all the Gallic flair and enthusiasm just across the border, there is little foreseeable bottom line for drive-in retailers here in Germany, chers amis.
Podcast. Click arrow to listen to an audio version of the text: