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IREU Top500 The Customer Report: 2018

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The New Rules of International Retail

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The New Rules of International Retail
The New Rules of International Retail
Expansion into new international markets offers huge opportunities for retailers, but companies needt to be aware both of unique local factors and widwer developments in cross-channel retail to make this work

To understand clearly why retailers need to take international sales seriously, look at Italy. Even as the Eurozone crisis dragged on and on in the midst of a global economic downturn, emarketer figures suggested B2C ecommerce sales grew by 32.1 per cent in 2011, with a 25.5 per cent increase predicted for 2012. Quite simply, there are huge opportunities for retailers in less mature ecommerce markets.

Once, this would have seemed like an opportunity quickly to set up a website and try to grab some business. Which isn’t in itself such a bad idea of course, but it’s an approach that risks overlooking Italians’ deeper cultural relationship with digital technology. In Italy, 98 per cent of the population aged 15 and over owns at least one mobile, and style-minded consumers are keen on upgrading to new smartphones. If a retailer is really to take Italy seriously rather than pick up a few sales from the curious, it’s clear the company needs think strategically about its mobile offering as well its website.

For Francesco Tirelli, head of international and ecommerce account development at Barclaycard, such examples illustrate a wider trend. “When I speak to my clients I say to them the [international] market is democratised,” he says. “Customers decide how they want to pay and which currencies they want to use. And even in which moment of the day they want to pay. When a client is moving into another market in the past they used to have the approach, ‘I am the big brand in this sector, I decide how my clients operate, on their mobile or on my website.’ Now I think the opposite is happening: it is the cardholder who has the power.”

Make no mistake, customers are beginning to use this power. BT futurologist Dr Nicola Millard uses the phrase ‘monster customers’ to describe the kind of smartphone-wielding consumer who will stand in a bricks-and-mortar store and demand a price they’ve just found online be matched. This is, of course, an extreme example and yet one way to approach expanding into new markets is to realise that there’s increasingly something of the monster in all customers, wherever they live. They – we – all expect localised digital offerings and they – we – are increasingly likely to shop elsewhere if these aren’t forthcoming.

Tale something as ‘simple’ as the checkout page. This actually isn’t simple at all. While the British are happy to use credit cards, for example, Germans prefer to pay by bank transfer. Any site that doesn’t reflect these local preferences will jar with the customer, make them less likely to complete a purchase. “One thing I always stress when I’m in a client meeting is pay more attention to your payments page,” says Francesco Tirelli.

Dealing with such issues, it’s important to realise, is about more than coping with the challenges in an individual territory and then moving on to the next territory, it’s also about building up expertise and learning for the next time around. Looking beyond 2013, this is only going to become more important as retailers look to territories that offer growth potential but, from a European perspective, aren’t so reassuringly close to home.

Within this context, fraud prevention will inevitably be a concern, making an expert partner such as Barclaycard essential as companies encounter fraudsters who use unfamiliar methods. “We can share our experience with our clients and highlight areas of potential weaknesses within fraud screening and work with them to ensure that losses from that site are kept to a minimum,” says Steve Clay, head of international sales at Barclaycard Global Payments.

But any concerns over fraud don’t seem to be putting off retailers. “People are now looking at more difficult expansion projects,” says Lefras Coetzee, product manager, international ecommerce at Barclaycard. “Even having a small or relatively modest success in the USA could make a difference to a merchant because it’s such a big market. China is booming tremendously at the moment. The BRICS countries are starting to do well.”

As we’ve already noted, such projects won’t be a case of simply moving into new territories and showing locals how it’s done. Rather, this will be cross-border expansion that takes account of local factors, all happening at the same time as mobile and cross-channel retail really begin to take off. Intriguingly, this may in turn produce new ways of doing things that go far beyond click-and-collect and spread internationally. Who knows, for example, what African countries where the majority of the population accesses the internet via their phones may have to teach Europe about mobile commerce?

Companies will need to be nimble to adapt to this changing world, but those that do will reap the benefits.

Speaking from Experience

UNEXPECTED SALES

“The beauty of the internet is that anyone globally can access your site. Although you may actually be specifically targeting, for argument’s sake, Spain, there are plenty of countries around the world where Spanish is the main language, so you could quite easily get Argentinean or any other South American card holder approaching your site because they recognise the language, the brand and you can also offer the relevant country’s currency.”

Steve Clay, head of international sales, Barclaycard Global Payments

CURRENCY CONVERSION

“Offering the customer the chance to pay in their local currency is a massive opportunity that many retailers don’t take advantage of.”

Francesco Tirelli, head of international and ecommerce account development, Barclaycard

 

BE DISTINCT

“You can’t just place yourself into a new market and think people will buy from you. You have to know how to do things to suit that new market and look more like a domestic player. But the thing is to do that in such a way that you don’t lose your brand.”

Lefras Coetzee, product manager, international ecommerce, Barclaycard
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Featured In
International and Cross-Border  - January 2013

International and Cross-Border - January 2013

Featured In
International and Cross-Border  - January 2013

International and Cross-Border - January 2013

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