PRIME PLAN

Amazon is planning brick-and-mortar stores in Germany

Germans still love shopping in stores, which account for 90% to 95% of the country’s total retail sales. That’s a point Ralf Kleber, head of Amazon Germany, was keen to make to the Berliner Morgenpost (link in German) on Monday.

In an interview addressing the e-commerce giant’s strategy for Germany, Kleber said “it’s not a question of if, but when” Amazon would open up brick-and-mortar stores in the country. He didn’t divulge a launch date.

Kleber said that Amazon’s stores in Germany could start out on a small scale, in the same way that Amazon Fresh, its online grocery service, was first tested for six years in Seattle before gradually expanding to other cities.

Amazon already has more than 12 physical Amazon Books stores in the US, as well as space in a handful of malls. It also owns hundreds of Whole Foods stores where it sells Amazon products like Kindles and the Echo, after acquiring the grocery chain for $13.6 billion in August. Revenue from physical stores came to $1.3 billion in the last quarter (mostly from sales at Whole Foods)—a figure that pales against the company’s $26.4 billion from online sales.

Amazon Fresh already delivers groceries in the German cities of Hamburg, Berlin, and Munich. Kleber wouldn’t say where the service might expand next, but said that metropolitan areas are better suited to Fresh, as they allow for efficient delivery and provide the most learning data.

Kleber also said Germans will soon have the chance to earn a little extra cash through its Flex delivery service. Launched in the US in September, Flex lets regular people register to pick up parcels and do local deliveries for Amazon Prime using their own cars for about $18-$25 per hour. The service is supposed to help with that vital “last mile” of parcel delivery, an ongoing challenge for retailers as it requires complex, costly solutions to bring an individual package to a single address.

Germany has certainly embraced Amazon as its go-to e-commerce destination. Statista data shows that Amazon already owned a 25% share of Germany’s online retail market by 2015. Between 2014 and 2016, the company doubled the amount of products on its German site to 229 million (link in German).

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