As Warden says, there are many theories about it: German raiding party; exercise gone wrong; testing of coastal defences; etc.
What has peaked speculation about it is that around a day or two later, neutral journalists in France and Gemrnay were reporting troop trains carrying large amounts of injured German troops from the west coast of France - obviously at a time when fighting was not happening on that front.
Who knows what happened at Shingle Street? Personally I wouldn't be surprised if we found out in the future that it was a German raid testing the defences on the eastern English coast as a preliminary for Sealion.
Guess we'll know when the documents pertaining to this are eventually released...