Philip Smith , country manager UK at Trusted Shops , is speaking at Internet Retailing Expo 2014 (IRX 2014). We caught up with him ahead of his presentation.
Internet Retailing: At IRX 2014 you’re going to be advising retailers on crossing borders. What type of retailers are best suited to take on the cross-border challenge?
Philip Smith, country manager, UK, Trusted Shops: I think it comes down to what kind of product you’re selling. Last year we saw fashion and clothing retailers leading the way with UK exports. A lot of this was put down to the fact that international consumers like UK brands at the moment. But the backbone of it was the type of products they’re selling. If it’s lightweight, it’s easy to ship. But other goods are more difficult. With electronics goods, for example, the product might have the wrong plug on, or there may be restrictions on sale to other countries. But retailers with a universal product that’s lightweight to ship should be taking advantage of international consumers at the moment.
People with their own brands work on higher margins and that allows them to compete with some local competitors because they can subsidise some of the shipping costs, if not all.
IR: What’s the biggest single opportunity in international retailing at the moment?
PS: The biggest opportunity at the moment is on our doorstep and that’s Europe. We’ve seen over the last couple of years that some retailers have been trying to run before they can walk, they’ve been chasing bigger and more exotic markets like China and South America, but right here in Europe, particularly with places like Germany, more than 25% of online shoppers are buying more than once a week. Even countries like Poland that have less developed markets still have about 20% of online consumers purchasing a few times a week. We need to embrace that opportunity that’s on our doorstep first – that will give retailers more confidence to take the next step into countries that are further afield.
IR: What are the biggest issues that retailers need to be aware of when expanding internationally?
PS: The language barrier affects everything, not just the text on your website but trying to deal with local providers or, from a marketing point of view, trying to get in tune with your customer. You may be well known in the UK but even though you’re well established in the UK, you’ll look like a new brand in the new country you’ve moved to. Trust is a real issue.
The basic laws and regulations in different countries are also important: we need to be sure that our rights to cancel, our refunds, even our confirm buttons are within the local law and regulation. In Europe this will get a bit easier because we have the EU directive coming in June that will harmonise a lot of those aspects but in the short term, retailers will have to make changes to their website. This is a challenge and will make it more difficult to localise within those countries initially.
IR: How do you think UK retailers will be developing their international trade in coming years?
PS: What retailers will be doing over the next two years or so is getting established in new local, European territories. This will give them the confidence to take the biggest step into areas such as South America, China, and even Africa. Making your site trustworthy is half the battle. You need to show and prove to each one of those consumers in each country that you are a trustworthy brand and that’s the only way you’re going to make a success on the international stage.
IR: How can Trusted Shops help with that?
PS: We help in a lot of ways. We have three main elements: the Trustmark, a customer review system and an audit report done by our legal experts in Cologne. The Trustmark shows straightaway that your website has been looked at by a third party and this is a trusted place to shop. The customer review system will allow existing customers to leave reviews, giving new customers even more confidence to purchase. Going back to challenges when entering a new country, when we audit a new website we make sure that website adheres to local laws and regulations and that they are localising that website in that territory, not just selling in a UK website with UK law.
At IRX 2014, Smith will be joined by Andrew Watson, head of online marketing at Buyspares.de and Naveen Aricatt, audit and legal, of Trusted Shops GmbH. They’ll be speaking in the International and Cross Border conference in a sponsor keynote session, Overcoming the three main stumbling blocks when crossing borders. Find out more about the conference and register for free here.