In this special preview of Internet Retailing 2012 (IR 2012), to be held in London on October 9, we have our latest in a series of interviews with speakers at the conference. We asked Andrew McClelland, chief operations and policy officer at retail trade association the IMRG, for advice for retailers thinking of expanding abroad. We’ve distilled his advice into a list of ten top tips.
Andrew McClelland will be one of the panellists discussing Balancing local engagement with a global experience across borders, in stream two of Internet Retailing 2012 . The discussion starts at 2pm.
1. Understand that the proposition you’re offering in the UK may not be what works for you overseas. “I was talking to a fashion brand not so long ago who said they are predominantly known as a clothing brand in the UK but in certain territories, particularly Eastern Europe, they’re now known more for their shoe range rather than apparel. No matter how much customer research you do you will always be surprised when you do finally launch.”
2. Make sure you’ve got products to sell in overseas territories. “The majority of electronics products, for example, are produced by big-name global corporates that will have distribution agreements in the majority of territories worldwide. It’s always worth making sure current suppliers are aware of what you’re doing and getting a degree of commitment from them to assist you in doing that. You might start getting into difficulties if the majority of your business is through some of the big brands that would have global distribution agreements.”
3. Look at what orders are already coming through your website. “That may be what’s spurred you to think about doing international anyway, but to start with understand where your orders are coming from and start looking at those specific markets.”
4. Understand the cultural differences – whether closer to home in Europe or further afield. “Good examples are expectations around delivery and payment options. In the UK we are wedded to our cards but in Germany, for example, only around 11% have credit cards. Most customers expect to pay by bank to bank transfer, direct debit, cash on delivery, and even payment by invoice. On deliveries, in Germany it’s a legal requirement that all returns are free so you could see a much higher returns rate than you would in the UK. Sixty per cent or above is not unusual.
“In China and the Middle East the cultural differences are even more exaggerated. When it comes to postal addresses, for example, in the Middle East these generally relate to a building not a person. And it’s worth putting addresses in Cyrillic, Chinese or Arabic script if that helps local people make deliveries on time and on schedule.”
It’s worth remembering, says McClelland, that cultural differences can also extend to how the website is arranged. “Consumers might look at websites in different ways, we might be used to top left brand messaging and a search box on the top right. It’s worth getting advice and looking at local competition to see how people lay out sites in those territories.”
5. Pick and choose where to sell. “A lot is said about the BRIC countries and there is no doubt they are huge emerging markets, but understand how much disposable income some of these communities have, how advanced their IT and internet infrastructure is, and the potential size of these territories. If you’re looking at China there’s no doubt there’s a burgeoning middle class with income to spend on retail products but that’s going to be a smaller number than the total population.”
6. Getting found in new markets. “Established brands in the UK are used to trading on the back of brand equity but that may not exist in a new territory. You may need to think about how you’re going to build that up. In some territories it may be worth doing a soft launch and seeing how it goes. In others it may be worth doing a splash event and making sure even if you’re a pureplay that people write about you, write nice articles, generate interest that way.
“You can fine tune your UK SEO strategy by including local terminology, keywords and start building up traffic that way. It’s always worth getting native speakers involved – they will understand the culture and have local knowledge.”
7. Consumers’ rights are determined by where they live, not where you trade.“Certainly if you’re trading in the EU, no matter what law you operate under, consumers’ rights are determined by where the consumer lives. It’s worth understanding what returns expectations, cancellation rights are in those territories.
8. Make sure you have the right partners. “That might mean looking for local partners to help you, not just suppliers in the UK that say they can do it.
9. Have a local address. “This gives additional confidence that you are a trustworthy brand.”
10. How the IMRG can help. “We have a community of members who are doing this already and through the environment we provide can share information amongst themselves. We also have access to a huge range of country data through our IMRG Smart database that covers most territories globally with information about the number of consumers, local trade organisations. Through our network we can help people find that information if we don’t have it. We also work with sister organisations in Europe and talk to the European Commision about upcoming policy. We help European retailers present their case to the commission and key stakeholders and spend a lot of time talking to those stakeholders and helping them to understand the benefits of digital retailing.”
Andrew McClelland will be one of the panellists discussing Balancing local engagement with a global experience across borders, in stream two of Internet Retailing 2012 . The discussion starts at 2pm.