InternetRetailing’s latest IREU Top500 Performance Dimension Report focuses on strategy and innovation. Emma Herrod reports on the findings.
Retailers and brands are taking a wide range of approaches towards expansion across Europe but for many it’s a given that they will offer local language websites in key strategic markets – whether that is across 30 countries or just four. In these territories, customers can make purchases in their local currencies using their preferred payment methods. Retailers go further by ensuring that they offer fast delivery and, where they have stores, services that make buying from the website and picking up in store as friction-free as possible. Some retailers are going well beyond this to offer local languages and fast-loading mobile apps to serve the growing number of shoppers who want to buy on the move. Forward-looking retailers also help shoppers to engage with them via favoured social media platforms.
InternetRetailing’s IREU Top500 Strategy & Innovation Dimension Report, sponsored by Ecomp, focuses on how well pan-European retailers are performing. It also highlights examples of best practice, areas where other retailers can learn from the approaches adopted by the best of the best.
Expanding into new markets, a recurring theme in this Dimension Report, is a daunting task. Assumptions built on familiarity with local conditions can no longer be relied upon. The difficulties are compounded by competitors offering innovative approaches that quickly become the benchmark by which consumers judge retailers. And then, of course, are the issues around Brexit.
More generally, this Dimension Report looks at how retailers are pursuing strategies that InternetRetailing researchers consider to be key. To what extent are the IREU Top500 retailers internationalising and localising their businesses? Do they have an outward focus expressed through local websites, languages and currencies? Are they offering innovative cross-channel services that bridge the gap between the online and the offline worlds in overseas markets as well as at home? Are they retreating into domestic territories, focusing on serving home customers, as they defend their businesses, rather than looking beyond national borders for opportunities? Brexit could prove a great disruptive moment, both at home and in Europe, and in this Dimension Report the researchers look for the early signs of that disruption in the form of it fostering innovation.
Brexit means that there’s a distinct emphasis on the word ‘currently’, in the knowledge that the UK has triggered Article 50 to start the process of leaving the European Union and this may well affect the way that both retailers and shoppers behave in the future.
Here, hard information helps. As well as the numbers offering insights into the approaches adopted by IREU Top50 retailers, the researchers took a step back and looked at where different European markets are most competitive in strategically important areas such as delivery and collection, website performance and apps. A series of case studies explore best practice in Strategy & Innovation at retailers including Asos [IRDX RASO], H&M, Ikea [IRDX RIKE] and Zara [IRDX RZAR]. Zalando’s Vice President of Markets, Delphine Mousseau, is interviewed and shares why she’s not just undaunted but laughing at the way the company won an award for the worst advertising in fashion two years in succession. She can afford to be amused. Leading retailers learn from such mistakes.
In a retail landscape where international expansion is the key to sustained growth, offering approaches that are innovative in a home market to shoppers in other European countries may offer retailers a first-mover advantage. Conversely, importing retail strategies that are widely used in other markets can prove innovative at home. The overall result will be a retail environment across the European Economic Area, plus Switzerland, that increasingly adapts and flexes to customer demand. The researchers highlighted 12 approaches that retailers are taking. These included:
- Make it easy for shoppers to buy via mobile;
- Talk to shoppers on social media;
- Give customers the service they need;
- Reflect the needs of local shoppers;
- Local payments and currencies;
- Exceed delivery expectations;
- Innovate to be convenient;
- Research new technologies;
- Ensure relevance;
- Use new ways to reach the customer;
- Joined-up services;
- Be prepared to change the plan.
In the coming years, InternetRetailing will continue to assess the way that retailers trade in what’s likely to be a highly volatile retail environment by putting the hard data of InternetRetailing research into a wider, and practical, context. As always, we’re interested to hear from our readers about how they think we should judge and understand retail strategies – do share your thoughts.