From Clicks to Bricks: Exploring Market Entry Strategies of Online Food Retailers in Germany

Abstract

The retail sector in Germany is currently undergoing a transformation. Department stores that were once successful are now closing their branches at prominent locations, while omni-channel retailers that originated from online commerce are expanding their position in brick-and-mortar retail. Previous research has focused on examining which Online Pure Players (OPP) in Germany pursue the Adding Bricks to Clicks (ABtC) expansion strategy and the form of market entry they choose. The investigation showed a clear preference for operating their own retail stores. However, the investigation did not sufficiently consider the food sector, despite the boost in online food retail due to the COVID-19 pandemic. The investigation involved triangulating, merging, and analyzing existing studies and data sources through secondary data analysis. This contribution presents a pilot study that investigates and compares the food omnichannel retailers Ankerkraut, KERNenergie, and mymuesli. These retailers were mentioned in the evaluation of 37 qualitative, guideline-supported expert interviews and originate from online commerce. The examined food retailers offer a curated range of specialty and delicatessen products in the higher price segment, adhering to specific product-price policies. They operate their own stores to strengthen their retail brand and provide a tactile product experience. However, they limit the number of these stores to a handful of flagship locations due to the high costs associated with such an expansion. More effectively, they expand their offline reach through collaborations with established retailers. These partnerships capitalize on the existing brand recognition and market presence of the partners, driving significant growth and serving as a model for best practices in the ABtC food sector.