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Crossing Channels, Crossing Borders, Crossing Cultures

Engaging Your Audience with Smart TV

Engaging Your Audience with Smart TV

The nuances of trying to take a cross-channel retailer overseas are considerable. Paul Skeldon argues that retailers have squarely to face challenges centred on the different mores in different cultures

According to Mahatma Gandhi “A nation’s culture resides in the hearts and in the soul of its people”. Not wishing to put words into the late, great man’s mouth, but he could probably also, here in the 21st Century, have added the addendum “…and in its shops and online retail sites”. And while Mahatma meant it in a positive way, when it comes to trying to expand a cross-channel business across borders, this is increasingly something of a hindrance.

But expanding overseas, despite cultural mores, is something that retailers have to consider. The UK retail market is facing saturation and, with the current economic climate showing no signs of thawing any time soon, there are two ways in which retailers can grow their businesses: hang on to their existing customers and squeeze more money out of them, or look to expand overseas to other markets where their goods are in demand.

While there is a whole other supplement on customer retention to be written, the second idea of expanding retail operations overseas does seem to many retailers, especially those already doing online retail, a natural extension of existing business.

“The very idea of ecommerce lends itself to cross-channel and cross-border model because of the ability to be a global company using the internet,” says Kyle Lacy, senior manager, content marketing and research, at ExactTarget. “Players of all sizes will be forced out of the market if they fail to innovate with consumer technology and demand.”


The rewards can be huge if you can grab a slice of the overseas market. Citing work by the Centre for Retail Research, which suggests more than €200 billion was spent by Europe’s estimated 240 million online consumers and that ecommerce sales will grow by 16 per cent in 2012, Shane Fitzpatrick, managing director at Chase Paymentech , says, “No surprise that retailers such as Marks & Spencer have recently announced that they will be trading online in 10 countries by the end of the year.”

Fitzpatrick says that online sales in the UK are expected to have grown by 14 per cent during 2012, but merchants have even greater international ecommerce opportunities in other high-growth areas. For example, research by Eurostat earlier this year suggests that growth in Poland is predicted to be 24 per cent followed by France (22 per cent), Sweden (18 per cent), Italy (18 per cent) and Norway (17 per cent).

“These trends present great new international expansion opportunities for CNP (customer-not-present) ecommerce merchants,” he stresses. “In addition, one could argue that the Queen’s Jubilee and the 2012 Olympics also played an important role in fuelling international ecommerce appetite for British products – so timing has never been better.”

And on paper it makes at lot of sense, but actually to pull this off, especially for a cross-channel business, is much harder than you’d think, with companies hindered mainly by the cultural issues lauded by the Mahatma. But, while it’s a challenge, it is not insurmountable.


So first of all, what are the challenges? Typically, they are all pretty much cultural: around language, taxes, payments and tastes. There is also the less cultural and more physical problem of distribution of goods – but that is covered in the logistics feature on page 22. Then there’s the issue of whether consumers are comfortable shopping with a retailer not based in their home region or steeped in their culture.

Perhaps the most obvious challenge to any retailer looking to extend crosschannel services – especially the digital ones – into another country is the issue of language. Language differences are possibly the clearest demonstration of the culture gap between countries, but can be overcome, in part through the application of technology.

“You simply need a platform that can populate different sites with the right language based on where the customer comes from,” says Eric Abensur , CEO of Venda . However, this can be more complex than people think. It is one thing to get the words right, the context and meaning – especially when dealing with colloquialisms – is something else.

“The other way around the language issue is to look, at least to start with, at markets that are expanding where they speak your language,” suggests Absenur. He cites the example of how more and more UK companies are expanding their online activities into South Africa, Canada, the USA and Australia since these are – with the possible exception of the USA – markets that have been little affected by the downturn and that speak English.

“Attitudes towards cross-border ecommerce can vary widely across Europe and consumers can be cautious about shopping from ecommerce stores in other countries,” says Chase Paymentech’s Fitzpatrick. “But that just means that merchants need to adapt to the local shopping habits in each market and build consumer trust by translating websites into local languages or offering additional payment methods. Taking this into consideration is an important step in embracing international ecommerce.”

But language is only the most obvious difference. Cultural areas that have even more impact on expanding a cross-channel retail business overseas are the more prosaic areas of payments and taxation.

“Payments can be very difficult indeed,” says Venda’s Abensur. “In the UK, people happily and typically use credit and debit cards. In France it is only debit cards. In Germany it is more of a direct debit like culture, while in China they tend to do cash on delivery – and usually not until they have unpacked the goods and tried them out. You have to make sure you understand this and have all the right payment tools in place when you open up your services overseas.”

Tax is another big issue with expanding overseas. “Most countries have very different sales tax regimes, often with very complex local, regional and national elements and you have to totally understand this to get the pricing right and know what to collect and who to pass it on to,” says Abensur.

There are also differences in technology and techno-savviness to contend with, which are also cultural. Internet penetration differs widely across regions, as does internet bandwidth. Mobile penetration is high in most countries, but its usage in, say, the UK, where the consumer base is highly advanced in terms of mobile web and apps use, is starkly different from the South Africa, where, despite high mobile penetration, users are largely making calls and sending SMS (and doing a lot of mobile banking, but that’s another story).

“Technographics differ across territories and are influenced by many factors: the nature of the telecoms market, the maturity of the broadband infrastructure, the impact of historic, legacy technology and so on,” explains Tunde Cockshott, creative consultant at Amaze. “When devising a retail strategy, one has to study the data on demographics, use of social media platforms, adoption and time and place of use of technology, etc. All these will influence and define your best approach.”


While these cultural issues abound, the other cost-related issues also come into play. The biggest and most obvious one is fulfilment “which can be a nightmare,” says Tony Bryant, head of business development at K3 Retail. But more than that, he believes, the costs come in trying to tie it all together. “The key thing is that you need to have one single database of your customers wherever they are and this may require some re-engineering of what you have already,” he says.

This costs money. “It’s potentially a large investment,” warns Bryant, “but a worthwhile one if you get it right. But it’s a 12-18 month ROI at least, and it only works if you look at how to get the best route to market and use the technology available cleverly to achieve what you want. Which is hard in a landscape that is ever evolving.”

Keeping consumers is also a sticky issue. The biggest problem facing any retailer that invests in a cross-border operation is that the number of users may well dwindle. “It is easy to think that once a cross-border subscriber provides you with their email address, they’re yours for life, but in reality they could un-engage and start ignoring your communications at any moment,” warns ExactTarget’s Lacy.

“Subscribers stop engaging for a number of reasons – message volume, frequency, irrelevancy, wrong technology, etc. But many retailers are sitting back and watching this happen, without adjusting their programmes to reengage these subscribers. Re-engagement is hard without cross-border intricacies thrown into the mix. Adding culture and different types of products produces an entirely new dimension.”

In fact, many marketers continue pending the same messages at the same frequency to lists where more than 50 per cent of the subscribers haven’t opened or clicked on an email in more than six months.

So while the cultural differences of language, payments and tax are issues, the real problems that face cross borders are the same old problems that you face at home: logistics and keeping customers loyal – all on a budget. Perhaps to paraphrase Ghandi one last time, culture lives in the receptiveness to marketing of the people?

Speaking from Experience


image004“When selling in the international market, the need for deep knowledge of the local market is key. If you do not know or understand the working of the local consumer then you are in danger of at worst failing and at best making mistakes.”

Tunde Cockshott, creative consultant, Amaze


image006“The rewards of going cross-border can be great, but the overheads can be huge to do it right. Driving sales is easy, making it profitable is extremely hard.”

Tony Bryant, head of business development, K3 Retail


image008“Retailers shouldn’t be spending millions of pounds on getting this right, they should be outsourcing the technology, the translation, the payments and anything else non-core so that they can grow interna- tionally but keep their domestic businesses thriving”

Eric Abensur, CEO, Venda

Recent Developments

Closer to home: while much of the attention was focused on Asia in 2012, it now looks that markets closer to home such as Poland, Russia and even just “Europe” are all looking enticing to retailers looking to expand overseas.

Outsourcing: last year we looked at how to merchandise in other geographies, but the emphasis this time round – and for 2013 – is going to be on how to actually make your online services work smoothly in other regions – and this means looking seriously at outsourcing ‘cultural’ issues such as translation, payments and site design locally.

Mobile payments: payments are one of the hardest things to make work crossborder, not least because of currency and culture. But increasing integration of payment services on mobile will start to see mobile become an interesting crosschannel and cross-border payment tool.

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