For store expansion in Germany, international brands can find smart alternatives to mainstream areas and worn-out pavements. Here are six examples.
The decision making process for retailers in lifestyle markets – specifically about where to open the next store – is often quite generic. If your role gives you the responsibility for the brand’s retail expansion in Germany and you are somewhat unfamiliar with the specific market, you’d probably open Google Maps, zoom in on your city of choice and look for pins of your brand’s competitors. Then you’d call a local real estate broker and ‘book’ a location nearby – in some cases no matter what the cost. Or maybe you’d even be open to invest a fortune from the key-money account (that’s what it’s for after all) and take the throne from the reigning brand monarch.
Explore Retail Areas With Untapped Potential
Why not think of alternatives to the norm and explore some locations with untapped potential? There are several ‘lifestyle brand ready’ retail locations in Germany that you may not yet have considered as an expansion location. They all have things in common: the rents are a fraction of the usual High Street prices; they provide opportunity to reach your target customers in a more focused way, in a more relaxed environment; you can be closely positioned near brand-relevant neighbors like restaurants, bars, creative offices and more. Additionally, choosing neighbourhoods that residents physically live in improves brand awareness in the street generally, but also outside of opening hours. You may worry about being harder to find, but if you’re on track with online communications, your customers will find you anyway and might actually be grateful to not have to deal with the usual packed High Streets to visit your store.
Here are six examples for potential and not yet brand-occupied retail areas, in five of Germany’s top cities – plus an extra one, you might be surprised about.
Berlin, Savignyplatz Quarter
In Berlin, West is the new East. Just a few steps away from the famous Kurfürstendamm, which has partly experienced a rebirth over the last few years, there are a bunch of smaller streets with impressive 19th century facades and green trees, delivering a cosy atmosphere in the very heart of the city. It’s worth leaving the boulevard behind and considering the awakening of the quarter around Savignyplatz from it’s hibernation. The area will be one of the first movers and definitely develop retail wise.
Impressive real estate developments in the neighborhood, such as Upper West and the Bikini Berlin mall, have already changed the walking routes of shoppers and tourists towards Kantstrasse, which until recently has been a less than inviting destination. As an indicator for innovation, hip cafés and restaurants have started to open in the quarter and those new apartments will be filled with urban dwellers needing their own new neighbourhood soon enough.
Just as other independent retailers have entered the scene at Bikini Berlin, Savignyplatz could be an ideal location for an innovative store concept, with comparatively little economic risk but a high grade of awareness. Next time you’re in city west, explore the area north of Kurfürstendamm, south of Savignyplatz, including the Streets from Grolman to Wieland such as Knesebeck, Bleibtreu and Schlüterstrasse, plus their cross connection of Mommsenstrasse.
Hamburg, Ottensen District
Nestled between Hamburg’s famous luxury shopping areas, around Jungfernstieg/Neuer Wall and the most wealthy local residential areas along the River Elbe, the Ottensen district has managed to retain it’s rather subcultural atmosphere. A bit like Notting Hill in London or Williamsburg in Brooklyn were before their discovery. Along and around Ottenser Hauptstrasse, which is dominated by the busy Altona train station, you’ll find individual stores, restaurants and streets packed with creative, culturally minded people.
The Mercado Mall, a local shopping centre that opened in 1995,
is the hot spot of the area. It is home to common as well as independent retailers and retains a market hall atmosphere in the open areas. Here it may not be chic but it is authentic, which is what makes this inner city spot special and remarkable.
So, why evaluate Ottensen as an alternative destination for your new, urban store concept? It’s a melting pot for Hamburg’s creatives and home to many modern young families. It has also become attractive to the more urban kind of tourist and the available retail spaces are numerous and comparatively affordable for market entry budgets.
Cologne, Belgian Quarter
You may have heard of Ehrenstrasse in Cologne – the creative designer fashion mile being hailed as the alternative High Street of the city. Alternatively, cross the Ring Road to the west and you’ll stumble into one of the most hyped quarters in Cologne: the Belgian Quarter. It’s called Chic Belgique for good reason: concept stores, lofts, restaurants, galleries and creative offices (plus fashionable residents) have been here for a long time already. However, international brands have not yet found their way into this hot spot.
Check out the block between Maastricht Strasse, Brüsseler Strasse and Aachener Strasse for your next store location in Cologne – it’s worth discovering and definitely has more soul than the overhyped High Streets just a few blocks away.
Frankfurt, Brücken Quarter
‘Mainhattan’ has become an endearment for the City of Frankfurt, but honestly it is still more of a village than a metropole. However, the global banks have historically built their skyscrapers here and there continues to be a lot of private capital to be spent in their shadows. Besides giant malls and the famous Zeil, there are many districts close together with the chance to develop them beyond just being residential spots. One charming area is the quarter around Brückenstrasse, south of the river Main. Historical buildings and streets, individual stores, restaurants, bars and a special, urban atmosphere are typical for the Sachsenhausen area, which Brückenstrasse belongs to.
It’s one of the most desired neighborhoods in Frankfurt to live in and here people like to stay in their surroundings. Individual concept stores started to opened here already around ten years ago (and many of those are still open), so some inspiring brand retailers would certainly find their place as well. Check the quarter when you are next in the city – it’s just a short walk from the bank towers and already shows you a totally different version of the Frankfurt we all expect.
Munich, Gärtnerplatz Quarter
Munich is busy already and its purchasing power is legendary. The city center is packed with all the brands you can think of, so why not consider settling down a few steps away from the consumer mania and in a choice spot around Gärtnerplatz, or the Glockenbach Quarter to its west (both quite close to each other). GAP recently popped up a store here (even though they don’t have permanent stores in Germany anymore) and there are obviously more brand invaders to come. It’s a common phenomenon when there is more demand in retail locations than the city can provide.
The luxury streets around Maximilianstrasse, Theatinerstrasse and commercial Kaufinger Strasse have been practically sold out – invest a fortune and you might find a spot, but economically it could become a disaster. The latest hope for brands wanting to expand was the development of Sendlinger Strasse but it’s occupied as well. So, where to go then? Quite close to Sendlinger Strasse you have the same look and feel but better opportunity for entry. There is a sleeping beauty waiting in the Gärtnerplatz Quarter, why not give it a kiss to draw it from its slumber?
Familiarising yourself with the city is always a good start. Begin with a visit to the impressive Eataly and the famous Viktualienmarkt to get an impression of the city’s culture, then have a coffee near the Staatstheater and walk along Reichenbachstrasse. You’ll then know soon enough, what I mean in terms of brand retail potential here.
Konstanz, Old Town Centre
As mentioned in the introduction, there is one location that may come as a surprise. It’s Konstanz – but why, you may ask? There are several good reasons to consider this historical small city in the south west of Germany. First of all, the border to Switzerland is just a few minutes drive away. As even the wealthy Swiss are interested in keeping their Francs, thousands of them hit the border and enter Konstanz every day for just one reason – shopping – and the chance to save due to the currency and tax advantages.
Secondly, Konstanz has a strong tourist trade due to its history and location on the banks of Lake Bodensee. The city is beautiful, old, mostly sunny, friendly and wealthy. But more than that, it’s busy with an almost constant stream of Swiss shoppers and international travellers. Konstanz provides a chance to establish your brand somehow backwards in Germany but still reach the focused target group directly.
You may find your matching store location in the charming old centre, but Konstanz is also worth looking at if you’re current strategy is about expansion into shopping malls. The local hero ‘Lago Center‘ has just finished second out of 269 listed malls in an independent study – the ‘Shopping Center Performance Report 2016‘ for Germany. Lago counts some 10 million visitors per year, with more than a third of them Swiss – and they all (!) buy, before heading back to their home country.
These six examples are just a glimpse into potential locations for brand retail in Germany. Not everything will work everywhere and sometimes the boundaries are fluid. But if you’re on your path to expansion with an open and creative mind, I’d recommend to go for it in one of these up and coming areas. Need help in orientation or evaluation these areas or markets? I’d be happy to advise and support you so feel free to get in touch personally.
(Title photo: © A.Savin, Wikimedia Commons. All screenshots: Bing Maps)
About the Author:
Alexander von Keyserlingk, is a specialist in brand retail expansion with long term experience in strategy and roll outs. His passion (and part of his consulting work) is to breathe in the local atmosphere and identify locations with potential in upcoming areas besides the well-known High Streets. Being a native retailer himself, Alexander has succesfully advised large and smaller enterprises through the cycle from setting up an expansion strategy to operational and local implementation. You can visit his LinkedIn profile for creative support in your expansion project.