Guide to the German fashion market

Germany is an attractive market for the fashion industry. In Europe, it is the largest and one of the richest markets. Many international players have found a reliable key market in Germany. But on the other hand, many brands and retailers have tried unsuccessfully to conquer it. What was the reason? Here is – on the eve of Berlin Fashion Week – an introduction to the German market and some facts to know before trying your luck with German customers.

The German market beckons

Germany is the largest market in the European Union, with a population of almost 84 million – in comparison, France has around 65 million and Italy around 60 million. Germany is also the best performer in Europe in terms of gross domestic product, which means that the population as a whole has high income levels and therefore high purchasing power. Before the pandemic, Germans spent 76 billion euros on clothes and shoes in 2019 alone, according to Statista. This places Germany just behind the UK in Europe and sixth in the world behind the US, China, India and Japan. These numbers may give you the impression that it is easy to sell fashion and clothing in Germany. Unfortunately, it is not the case.

Purchasing power in German-speaking countries. Graphics: GfK

A recent example is the Hudson’s Bay Company (HBC). The well-established fashion retailer from Canada entered the German market in 2015 with high hopes. He bought the Kaufhof department store chain for US $ 2.8 billion, intending to “turn them into Macy’s concepts,” as Forbes wrote in 2016. Additionally, he opened discount stores under the Saks Off Fifth brand. “The question is whether low-cost stores will resonate with German customers unfamiliar with the Saks 5th Avenue banner,” Forbes asked at the time. They did not do it.

Although other low-cost concepts such as TK Maxx, the German version of the American discount chain TJ Maxx, seemed to work well, Saks Off 5th was forced to close its stores a few years later and HBC pulled out. from Europe. Galeria Kaufhof has been sold to Signa. A combination of insufficient understanding and sensitivity for the German market and a lack of orientation towards e-commerce was probably to blame.

Previously, other US retailers had also tried to gain a foothold in Germany, including Walmart. The mega-store bought the Wertkauf and Interspar discount stores in 1997, “to leave the highly competitive German retail landscape nine years later”, as
Forbes written, and at an alleged loss of US $ 1 billion. Clothing chain Gap also tried itself in Germany and failed, as did Forever21, which itself went bankrupt in 2019. Germany is a tough market and the strategy that works in the domestic market often doesn’t work. as expected for the Germans. What are the reasons ?

In these regions, the Germans like to have fun. Image: GfK

1. Decentralized structure

The fact that Germany is a difficult market to exploit is due to several factors specific to Germany. Unlike France, UK or Italy, Germany has a more decentralized structure meaning that there are many urban centers rather than, like in UK or France, the Greater London or Île-de-France in Paris, where most of the rich and the creators of taste are to be found. concentrated. Instead, Germany’s five largest cities are located in different corners of the country, and their respective lifestyles differ significantly. A look at per capita income per city in Germany holds even more surprises. Who would have thought of cities like Wolfsburg, Ingolstadt or Schweinfurt to open their first fashion store? And yet, these are the places in Germany with the highest income per working population.

2. High demands on service and price

German customers are knowledgeable and very demanding. They compare and research the best deal – ‘value for money’ is the central term in the German worldview – before making a purchase. According to a 2015 global study by Accenture, Germans have the highest expectations in the world. “Compared to consumers in other mature markets, Germans are particularly demanding,” Accenture chief executive Sven Drinkuth said in a statement about the study. “The price alone is no longer the main objective. Customers basically expect high quality and are quickly disappointed.

3. Protestant culture

Although divided equally between Protestants and Catholics in terms of denomination, Germany is, culturally speaking, a Protestant society. After all, this is the country where the reform began. This is what distinguishes it from the French and the Italians: the Germans are more pragmatic in their aesthetics and pay less attention to status symbols: think of Jil Sander, Hugo Boss or even Adidas. The German style is more like a Protestant church interior – clean, minimalist, functional – than the pomp of a Catholic cathedral.

Always following a Protestant virtue, the Germans like to save and invest their money. According to ING Germany and Barkow Consulting, the average European invested 3,121 euros in savings investments such as stocks last year. In Germany, the figure was 4,671 euros.

4. Germans spend less on fashion than other nationalities

In Germany, “[S]tatus is demonstrated by smart investments in cars, watches and technical devices ”, according to a study by consulting firm“ Join The Dots ”. This fact is also reflected in the distribution of the German budget. According to Statista data, German women spent around 719 euros per person on clothing in 2019, significantly less than Italy (834 euros) and the United Kingdom (1,133 euros). According to the Luxury Spending Index, this could be because expensive accessories like handbags and jewelry – status symbols, after all – are more popular in other countries.

5. Price sensitive and pragmatic

What is certain is that Germany has been the best-selling market for Swedish fashion group H&M for decades, and second for Amazon. During the Corona crisis, the price sensitivity in the lower price segment intensified again this year. From February to the end of May, market C, which is made up of 50% Germans, lost 19.7% in value and 13.6% in volume, explains Ulla Ertelt, managing director of market research firm HML Marketing based in Frankfurt. in an interview with FashionUnited [in German].
“It means people are buying at even lower prices.”

Brands also need to be realistic when it comes to style. German consumers tend to be reserved and pragmatic when it comes to fashion. They prefer clothes that are practical and can be worn on many occasions. “The most common fashion style is comfortable or casual, and classic, practical and sporty styles are also popular. It is important to always be well dressed, ”summarizes a recent study by the Magdeburg-based market research institute IWD.

The typical German customer who spends the most on fashion is older than many might expect. “The over-50s market represents more than 50 percent of the German market,” Ertelt said. “But the ‘modern women’ market is only 25 percent. It’s a fundamental dilemma in fashion, which everyone wants to rejuvenate. If everyone goes into the 25 percent market, from their lineup and adjustments, then of course there are gaps in the market where 50 percent of sales can be made, ”she explains. . The older generation, “the one with the money, who has already achieved their highest income in life,” is overlooked in fashion retail, she said. “In the years between 25 and 49, we build a lot more, a new apartment or a new house is bought, a family is founded, with young children, we can often only work half days. These are much more volatile and overpriced markets. The most fashionable customer is over 50 years old and has been used to buying fashion trends in specialty stores all her life.


For brands and retailers, this means that there is not only the only german lifestyle, but also different regions and population groups.

If brands want to gain a foothold in the German market, it would be a good idea to visit the bigger cities and take a stroll down the main street. Take a close look at the people you see on the street to get an idea of ​​who they are and what they might be looking for. Do some market research ahead of time and think of small towns where the business landscape is not as saturated as in the big cities. Be realistic with your target audience, who are arguably not young and hip. Make sure you are working with a sales agency that specializes in the German market and listen to their comments.

This article originally appeared on Edited and translated by Simone Preuss.

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