Developing your business in Switzerland thanks to digital advertising: what you need to know
Economic and political stability, geostrategic position in the heart of Europe, strong currency, and qualified workforce; Switzerland offers a particularly favorable environment for businesses and is a tempting project. However, launching a business in Switzerland is not something that can be improvised: reflection and preparation are essential. We have summarized for you in this article some key information that will allow you to successfully launch your business on the Swiss digital market.
The Swiss market: the Eldorado for companies
Switzerland is a small country with about 8.5 million inhabitants located in the heart of Europe. It has the reputation of offering a real quality of life whether you live or work there. Indeed, thanks to its excellent education and health care system, quality infrastructure, innovative and technological potential, and close links with other markets, Switzerland offers a free trade economy with an almost zero unemployment rate.
In terms of advantages for the creation and establishment of companies, Switzerland is at the top of the European rankings.
A geostrategic position
Switzerland’s geographical position represents a significant advantage for companies that set up there. According to SECO (2021), this location in the middle of important economic axes is decisive for an international development strategy. Moreover, the Swiss Confederation is also appreciated for its neutrality in the establishment of European headquarters: many multinational companies have established their regional or international headquarters here, including Nestlé, Novartis, and Roche (Davis Plüss, 2018).
However, like any nation, Switzerland has its own specificities that must be taken into account in order to successfully develop your activity in the country.
The Swiss franc, a strong currency
Not being part of the European Union, Switzerland has its own currency, the Swiss Franc, which is considered strong. Developing a business in Switzerland means accessing a market with approximately 8.5 million consumers with one of the highest purchasing powers in the world (Statista, 2021). However, this also implies, for the company, currency exchange and therefore, potentially higher or lower costs if no steps have been taken beforehand.
The working language depends on the region
Switzerland’s geostrategic position and federal structure make it a meeting point for many cultures and languages. Indeed, 4 official national languages are spoken in Switzerland: German (including Swiss-German) (62.1%), French (22.8%), Italian (8%), and Rhaeto-Romansh, spoken by only 60,000 people (SFSO, 2021). These 4 languages are divided between 4 different regions: German-speaking Switzerland (in the north, center, and east of Switzerland) and French-speaking Switzerland (in the west) – each including several cantons, Italian-speaking region in the south (with the canton of Ticino), and the canton of Graubünden in the southeast – where Italian, German and Rhaeto-Romanic are spoken. Communications and official documents are issued in all four languages; the Swiss therefore expect individuals or companies to communicate with them in the language of the region in which they are located. This is all the more noticeable in the German-speaking part of the country where a multitude of dialects is spoken daily to the detriment of standard German.
A cantonal system that favors ecosystems
Moreover, like Germany, Switzerland is characterized by a cantonal system, consisting of small confederations providing each of the 26 regions with a certain economic and political independence. This cantonal system has an impact on the industrial environment. Indeed, depending on the nature of your activity, some cantons will be more adapted than others to the development of your business. For example, the canton of Berne is home to the largest cluster of companies active in the medical sector, while in Neuchâtel, it is more watchmaking companies.
Switzerland is a mature economy
Although the Swiss market offers many opportunities, the level of service is highly developed in most sectors of activity, and it is therefore important for a new player to bring real added value to the products and services offered in order to stand out from its competitors. This can be explained by the particular mindset and habits of the Swiss, whether in their professional or personal life.
Consumers with specific habits
Sharing the same language as their German, French and Italian neighbors, the Swiss nevertheless have a very specific culture and customs that you need to understand in detail if you want to develop your business in the country.
Relationships that go straight to the point
Unlike in France, little importance is given to diplomas, and the focus is more on the know-how: your experience and your skills. Moreover, the managerial and commercial style differs from that of France and is more similar to that of Germany, where direct and honest communication is preferred and even recommended.
The partners are decisive
Another Swiss specificity is the group membership which plays a central role in the Swiss culture. In Switzerland, if you are not known as a company or an individual, you will be judged mainly by the group to which you belong, i.e. the people who recommend you, hence the importance of associating with the right people.
Consumers are demanding more sustainability
The COVID-19 pandemic has changed the buying behavior of Swiss consumers. In fact, according to the study “Covid-19 consumer trends” by the market research institute GFK in 2020, this crisis seems to have raised sustainability awareness among many consumers, and thus there is a clear trend towards regional purchasing (Wöhlert, 2020).
Furthermore, surveys also show that almost 40% of respondents expect companies to act responsibly (Wöhlert, 2020); consumers want to know where products come from and expect companies to communicate transparently and credibly based on authenticity. This demand for companies to take on more social responsibility also contributes to the sense of community that is so important to the Swiss.
A growing trend to buy online
Despite the growing popularity of e-commerce, until 2019 many Swiss preferred to buy only in physical stores, which gave them the opportunity to evaluate the product and talk to a knowledgeable salesperson: only about half of the Swiss population made at least one online purchase per month (Garcia, 2020). This trend was reversed following the Covid-19 pandemic, during which consumers experienced the benefits of online shopping and are now increasingly buying online: as a result, the online sector grew above average in 2020 (AWP, 2021). In addition, thanks to the measures and services offered by the various players in the stationary retail sector, such as online shopping advice, click & collect offers, contactless payment, and home deliveries, few Swiss people have returned to the stores when they reopen, preferring to continue shopping online and benefit from a broader physical and digital offering.
The smartphone is the essential tool for Swiss shopping
The use of digital devices and online channels is now also affecting physical shopping in Switzerland. This is because many customers use mobile devices to check product information, such as prices, reviews, and stock availability, before or during a shopping trip and after-sales service after the purchase. According to a Deloitte study (2021) on digital retail in Switzerland: 83% of Swiss consumers use a digital device for shopping-related activities before, during, or after their physical trip, thus blurring the line between digital and physical retail.
Switzerland, one of the most connected countries in Europe
With nearly 93% of households connected, Switzerland is one of the most connected countries in Europe (n.a., 2020). The Swiss use the Internet in their private and professional lives, regardless of their age. Different browsing media are used on a daily basis, such as computers, smartphones, and tablets, creating multi-platform consumption. The Internet is at the heart of Swiss people’s lives and according to surveys, if a company does not have a website, or if it is not adapted to the different media, it risks missing out on nearly half of Swiss Internet users (Plancade, 2019).
A national digital strategy that guides the country
Since 2015, Switzerland has placed itself at the center of digital innovation in Europe through the “Digital Switzerland” initiative. More than 220 members of the concept collaborate to raise awareness, encourage certain changes in laws to facilitate the development of start-ups, and address digital challenges, a sector largely dominated by Asia and America. The association also organizes digital days such as the Digital Days, as well as various digital challenges to be taken up by universities, companies, or public authorities.
An advertising law that will be simplified
From July 1st, 2021, a change in the Swiss law will impact advertisers. Indeed, advertisements promoting products in Switzerland will no longer have to indicate the so-called essential characteristics of the product in question, such as its quality, the brand, or the services to which the displayed price refers; a simple URL address or QR code will suffice to inform consumers who want more information on the product.
The media panorama in Switzerland
Television: the popular and reliable media of the Swiss
Television is the most expensive but also the most popular advertising medium in the country. Almost all households own a television. Compared to other countries, the Swiss have low consumption of television, spending on average 112 minutes (German-speaking part), 131 minutes (French-speaking part) per day, and 163 minutes (Italian-speaking part) (FSO, 2020).
The main active companies are the following:
According to a study carried out in 2021 by Screenforce Switzerland, the brands that have invested in advertising in Switzerland on television, are those that have been able to resist the COVID-19 crisis and even see a positive evolution of the market. In fact, according to the same study, television advertising offers a better recall rate and is, therefore, more advantageous in terms of return on investment. It should be noted that brands that have communicated a targeted message via addressed television by playing on emotions have seen a measurable increase in the emotional loyalty of consumers towards their brands, as television is considered one of the most reliable media in the eyes of the Swiss population.
The Swiss traditional press is in decline
Switzerland has one of the highest concentrations of newspapers per capita in the world (n.a., 2019). There are more than 100 daily or weekly newspapers distributed free of charge and financed in part by advertising. With its linguistic and cultural diversity, many newspapers are assigned to particular localities and regions. A large part of the population regularly reads a paper newspaper. However, there is a clear decline in readership, which is increasingly turning to the Internet.
The main swiss newspapers:
The attractiveness of Out-Of-Home
Out-Of-Home advertising is widely used in the country. In 2019, before the Covid-19 crisis, 71% of the country’s population left their homes to go to work; this represented nearly 3.6 million people who traveled daily, including 1.8 million by bus, train, or tramways (FSO, 2021). Thus, advertising on public transport impacts the very heart of the target area. There is advertising space on trains and streetcars, on buses, cabs, and other specialized vehicles, in train stations, streets, and bus stops.
Radio reaches 85% of the Swiss population
Finally, radio is by far the most popular and cheapest form of mass entertainment in the country. It covers almost the entire population (84% of those over 15 listen to it every day) and thus reaches a large share of consumers (Admeira, 2021).
The main radio stations:
The Swiss digital market is growing
As mentioned earlier, about 93% of the population had an internet connection by the end of 2020 (n.a., 2020). Thus, with the continued penetration of high-speed internet connections in the country, advertising is increasingly focused on the internet and less and less on print.
Indeed, in 2019, advertising spending on digital media increased by 7% compared to 2018. The sector showing the highest investment was Search, followed by Cinema according to Media Focus Stand 2019 (Admeira, 2021). Digital-Out-Of-Home also saw a 6% increase. These results are in contrast to the traditional press market, which fell by 10% in 2019, again according to Media Focus Stand 2019 (Admeira, 2021).
Also, according to the egta 2019 database (Amdeira, 2021), if we compare the different Swiss advertising expenditures to those of Germany or France, we get the following results:
- Press: 25% CH, 28% DE, 12% FR
- TV: 26% CH, 49% DE, 42% FR
- Out-of-Home: 10% CH, 5% DE, 9% FR
- Radio: 3% CH, 6% DE, 19% FR
- Cinema: 1% CH, 0% DE, 2% FR
- Internet : 34% CH, 12% DE, 16% FR
There is a tendency in Switzerland to spend a majority of the advertising budget on the Internet or television, which creates an opportunity for investment and visibility in other online media, such as radio and cinema.
We help you establish your brand through digital advertising in Switzerland
Investing in the Swiss digital market presents many opportunities, but above all requires a certain amount of research and specific know-how. At EuroDSP, we accompany you step by step in the implementation and successful development of your digital strategy on the swiss market.
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