Case study

IS YOUR COMMERCE

PLATFORM READY TO GO GLOBAL?

MAKE SURE YOUR SYSTEMS HAVE THE FUNCTIONALITY AND FLEXIBILITY

TO SUPPORT GLOBAL GROWTH PLANS

International markets are a tempting target for today’s multichannel retailers, particularly for those with strong ecommerce credentials. As more consumers worldwide gain access to the internet via fast broadband connections and smart mobile devices, retailers are realising that they don’t necessarily need a bricksand-mortar store presence to reach these new shoppers.

In fact, several leading retailers have used ecommerce as the leading edge of their global expansion. High-profile companies such as H&M, Ralph Lauren and Gap’s Athleta have created country specific ecommerce sites that have generated new sales, while simultaneously testing the water to see if the new market can support a bigger presence requiring a larger investment.

Whatever the strategic business reasons for expanding into new markets, multichannel retailers considering such a move will quickly come up against a number of practical and tactical considerations. Differences in languages, currencies, taxes, and regulations must all be analysed and addressed. Even in an increasingly globalised world,

consumer preferences about everything from the merchandise that’s offered to what constitutes an effective marketing

message can vary widely from country to country, and even from region to region within a country.

While making a digital-only move into a new market can significantly lower initial investment requirements, the lack of a physical infrastructure can create it’s on challenges. Retailers will need to determine how products will be delivered to shoppers. In some markets FedEx or DHL-style package delivery companies will be an option, but a sudden spike in orders could create higher-than-expected shipping costs and/ or disappointed customers. Retailers will also need to set up a system for returns and exchanges, which can be particularly challenging without any bricks-and-mortar stores to serve as physical transaction sites.

CONDUCT A COMMERCE PLATFORM AUDIT

Having the right information technology solutions is clearly essential to success when entering a new market. Even

those retailers with solid multichannel commerce systems to support their ‘local’ operations will need to conduct an IT

needs analysis and platform audit to determine if their systems are ready to go global. Following are key solution areas

for retailers to assess:

1. MERCHANDISING/PRODUCT CONTENT MANAGEMENT

Decisions about which products to offer in a new market are critical. Retailers using ecommerce as their entrée will be tempted to make their entire product catalogue available, in essence treating their digital sales as an ‘endless aisle’. But product preferences can vary dramatically in different markets, and it may be more cost-effective, and less confusing for shoppers, to create market-specific merchandise assortments.

Another factor to consider in shaping an ecommerce product assortment is fulfillment. If items will need to be delivered rather than picked up at a store or distribution centre, retailers will need to consider shipping costs, returns and post-sale services for large, heavy, or technologically complex products.

Ideally, a retailer’s commerce system will be built on a product content management foundation that allows all

channels to draw from one centralised source of information and content for each product the retailer carries. The

system must also be capable of housing market-specific product content and information, in multiple languages.

This product content management foundation would enable retailers to ensure accurate product information

while ensuring the related content is market-specific. In addition, as retailers learn more about the tastes and preferences of the new market’s consumers, they will be able to refine their merchandise offerings, easily adding and subtracting items from the master database.

2. TRANSACTIONAL CAPABILITIES

Operating in new global markets means dealing with local currencies, as well as country and regional taxes and regulations. Retailers will need to ensure their commerce system can handle multiple currencies and can be configured to handle local laws relating to receipts and tax collection.

Remember that a commerce platform will need to handle more than customer-facing transactions. Retailers might see an advantage in pricing merchandise for sale in the local currency while paying suppliers in dollars or another ‘home country’ currency. With recent rumblings that some European countries could drop out of the eurozone and re-establish their own individual currencies, retailers will need the flexibility to make changes as the host country’s financial systems change.

Multichannel commerce platforms that have been designed from the ground up for multi-currency, multi-language operations offer an important benefit for retailers as they move into new markets.

3. SUPPORT FOR MULTIPLE LANGUAGES

Customers worldwide have rising expectations about ecommerce, so retailers will need to ensure that their websites and other customer-facing touchpoints are literally talking to shoppers in their own language. In other words, simply translating a home country site word-for-word into another language is almost guaranteed not to make a positive impression. A sensitive, culture-specific translation will be worth the investment.

Translation and language issues are particularly acute for retailers expanding into countries using non-Roman alphabets, such as Russia, China and Japan. Websites and other customer communications may need to not only be translated but completely redesigned to accommodate different character sets.

Retailers should also keep in mind that they will need to provide additional services and support to their new customers, either by phone, email or online. Speaking the locals’ language will pay off in customer service perceptions and customer loyalty.

4. PRIMED FOR RAPID, COST-EFFECTIVE DEPLOYMENT BY LOCAL SYSTEM INTEGRATORS

Retailers will obviously need to do their homework prior to expanding into a potential new market, determining if it has sufficient consumer buying power, whether competitors are already operating in the market, and how big the market might be overall.

However, even the most thorough market research can’t substitute for actual selling experience. Retailers that use their ecommerce expansion as a real-world test will require solutions that can move them into a new market quickly, efficiently and cost-effectively.

In addition, platforms offering multiple deployment options provide retailers with maximum flexibility as their international businesses grow and change. For example, a retailer might want to begin with an on-demand platform priced with a revenue-sharing model at the start.

Furthermore, your commerce platform provider must provide access to a network of local partners that can guide your implementation. Without these local specialists, who ideally should have a close relationship with your commerce vendor and solid experience in working with your platform in their home markets, your project costs may increase and you run the risk of failing to understand the ins and outs of operating in a particular region.

CONCLUSION

Now that digital commerce has made it far easier to reach shoppers virtually anywhere in the world, retailers are looking hard at global markets to secure their future growth. But retail can be a tricky industry even when operating on your own home turf. In unfamiliar markets, retailers will need a commerce platform that provides maximum flexibility in managing product content across geographies, payments, languages, compliance, and options for rapid and low-cost deployment.

The ideal platform will have been architected from the ground up to work across multiple geographies versus being retrofitted with language and some transaction support in the form of ‘upgrades’. Auditing your commerce platform’s capabilities to handle a global operating model is a crucial first step in accessing the growth potential in emerging markets.

For more information, visit

sales@hybris.com.