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. Chloe Rigby rounds up some approaches that impressed us during the course of this research.
1. Make it easy for shoppers to buy via mobile
Retailers benefit when they enable shoppers to buy in ways that are most convenient for these customers. In many markets, that will mean over smartphones – and shoppers that download a mobile app are likely to be among the most loyal, returning for an easy experience. That’s particularly true when the mobile app functions in the local language and offers sophisticated functionality that compares well with local competitors.
German footwear retailer Deichmann, which uses 18 languages to sell in 19 EEA countries, enables its customers in Germany, the UK, Austria and Italy to buy via localised, transactional iOS and Android apps. The apps offer some advanced functionality that’s relatively unusual among Top500 retailers. Features include barcode scanners and store stock checkers, while customers can also see star ratings and both read and leave product reviews.
Meanwhile, UK fast-fashion business Asos enables shoppers in France, Germany, Italy and Spain to buy via localised Android and iOS apps. Customers can view daily deals, save products for later and share them on social media.
2. Talk to shoppers on social media
Retailers use social media to great effect when they tailor messaging to local markets, talking to shoppers in their own languages and on the social media platforms these customers use. That can amplify a retailer’s voice and raise brand awareness in new markets.
InternetRetailing research shows that French sporting equipment retailer Decathlon talks to its customers over 10 social media channels. It has 13 country-specific, local language Facebook feeds. The Spanish site had the largest following at the time of the research, with 2.3m Likes. Decathlon has nine country-specific Twitter handles. Again, Spain leads the way: Decathlon’s Spanish feed had 377,000 followers.
Speaking to InternetRetailing for the IREU Top500 Brand Engagement Performance Dimension Report, Decathlon’s Kieran O’Shea, explained how the retailer used social media differently between markets. Twitter is a key channel for the sports equipment retailer in the UK, with more followers than Decathlon France, whereas in France, it is more likely to communicate to visitors via stores.
It’s important, he explained, to target shoppers precisely. “We go in-depth with our retail marketing so that we can talk to the right customers with the right offers at the right time,” he said. “The last thing I want to do is pay to reach someone that’s not interested. I avoid that by going in-depth in my targeting, and making sure that what I’m serving to customers is what they want.”
3. Give customers the service they need
The better the customer service that shoppers encounter when they have a query or a complaint, the more likely they are to return to buy another time. That’s just as important for customers buying from international websites, where a local telephone number, alongside easy-to-understand delivery and returns information, can be reassuring to browsers who are considering buying but are not yet convinced.
Spanish-owned Zara stands out in the IREU Top500 for its pan-European customer service. It delivers the same standard of service across the 28 EEA countries that it services in 23 languages. Because it enables shopper feedback across its operations, it is also able to respond quickly to comments, and to make fast changes to its designs and services.
4. Reflect the needs of local shoppers
Retailers target shoppers in overseas markets effectively through websites that offer local languages, payments and currencies. Many retailers limit that strategy to just a few websites targeting chosen markets. Some large retailers, however, target many more in an approach that works well for globally focused strategies. Enabling a local feel works well for brands that have a high recognition factor and logistics expertise.
Holland-headquartered global retailer Ikea has more than 30 different websites serving Europe alone, including three sites for Switzerland, in German, French and Italian, and three for mainland Spain, in Spanish, Catalan and Basque. This represents a market-leading level of attention to detail that’s also backed up by stores in 50 markets around the world, including 26 countries in Europe.
Other retailers that localise to a high degree include fashion retailer Next, which has dedicated local currency and local language websites for more than 30 European markets, including Gibraltar; Zara, with almost 30 transactional websites for EEA markets including Switzerland and the Canary Islands; and BonPrix, with local language websites for more than 20 European markets.
5. Local payments and currencies
The checkout is a common point for shoppers to abandon purchases. When those shoppers are buying across borders, retailers that enable them to pay in their local currencies, using the payment methods that best suits them, are likely
to benefit as a result.
German retailer Zalando tailors the payment methods it offers to the markets that it sells in. It offers Visa, Mastercard, American Express and PayPal widely, adding methods that have appeal in local markets. For example, in Germany it offers the Rechnung – or open invoice – method that is commonly used in the country. In Holland, it offers local bank transfer scheme Acceptgiro as well as iDEAL, which processes more than half of all payments in the market. In the UK, Zalando enables customers to pay via Maestro or Visa Electron, while in France it offers anti-fraud payment system Certissim. Currencies are localised, so that UK shoppers can buy in sterling, and German shoppers in Euros.
As well as offering local currencies, some retailers also offer local prices, UK fast-fashion retailer Asos developed zonal pricing so that it could offer different prices in different markets, enabling it to compete more effectively with local retailers.
6. Exceed delivery expectations
Fulfilment strategies that meet the standards expected in each local market are important for retailers selling across borders if they are to compete effectively. By going further and exceeding those standards, retailers raise the game to better customers’ expectations.
Thus US retailer Amazon has taken on UK grocers by offering PrimeNow delivery within an hour in some parts of the country. It also offers highly competitive services in its five other European markets. For example, Italian shoppers who order by 4.30pm can take delivery by noon the following morning, while shoppers in the Milan area can order by 1.30pm to take delivery between 6pm and 9pm.
Computer giant Apple, meanwhile, offers a market-leading service more widely across Europe. InternetRetailing research found that it offers next-day delivery to online shoppers in seven EEA countries when they spend more €40. In those markets, shoppers can also return their orders to a store within 14 days, or schedule a third-party collection. Refunds are given within five to seven days of the company receiving the product at the warehouse.
7. Innovate to be convenient
Make it easy as possible for shoppers to buy: those that appreciate flexible services will be more likely to return. Retailers that enable shoppers to collect in store, or to buy in easier ways, are likely to gain repeat business from those that find the approach makes life simpler. Thus, Holland-headquartered Ikea and UK department store House of Fraser are among the retailers that have designed new smaller-format stores where shoppers can pick up – or research and order – their online purchases at a location that is convenient to them.
Value fashion retailer BonPrix, meanwhile, encourages UK shoppers to buy from nine different websites in one transaction. This means one shopping basket, one checkout and one delivery charge for such transactions.
8. Research new technologies
Being among the first to adopt a new technology can help give retailers a reputation for innovation. But it’s important that those technologies are genuinely useful to existing as well as potential customers. That’s where research and genuine understanding of customer needs – and how existing services fall short – comes in.
UK department store House of Fraser, for example, used virtual queue management technology to ensure that its click and collect customers had a better experience during relatively short lunch breaks, while Asda used a range of click-and-collect options, from drive-through services to the store, while also testing the use of intelligent pod technology.
9. Ensure relevance
Retailers better communicate the products they show website visitors when they show goods that are relevant to these visitors. Personalisation is one way to do this: IREU Top50 retailers from Amazon to PC World offer a more convenient service, including faster checkout and recommendations based on order history, to shoppers that have signed in.
Very.co.uk offers personalised home pages and product displays, again based on order history, while also showing shoppers what its range of bags, luggage and purses would look like on them Sportswear brand Nike enables its shoppers to customise trainers online.
Different approaches work in different industries: furniture retailer Ikea and tile merchant Topps Tiles are among those that enable visitors to their websites to visualise their purchases in place in the home, while ‘how to’ guides help DIY customers to put purchases to work.
10. Use new ways to reach the customer
Brands and retailers are benefiting from the advantages of reaching out to potential shoppers via third-party websites. Whether it’s selling on another retailer’s website, or on one of the growing number of marketplaces that serve a wider European area, these are useful ways to raise brand awareness in new markets and to reach new audiences.
Shoppers can buy from retail brands, including New Look and River Island, on Zalando’s sites in the UK and beyond, while clothes and footwear from Mango, Coast, Phase Eight and Nike are available on Next’s Label site. This gives Next a way to build sales, while also enabling shoppers to make all their online fashion purchases from one destination, reducing the cost of having them delivered.
11. Joined-up services
Strong links between the store and online make for convenient and easy-to-use services. Still more convenient services come when retailers cooperate to enable pick-ups. eBay shoppers have been able to collect their online purchases from branches of Argos for some time. Now they can also do so from branches of Sainsbury’s, following the supermarket’s acquisition of the general merchandiser and its rollout, within its own branches, of 30 Argos digital format stores and 200 digital Sainsbury’s pick-up points in the run-up to Christmas.
Over the next three years, Sainsbury’s said in half-year results to 24 September 2016, it aims to have 250 digital format Argos stores in supermarkets. This, said Sainsbury’s CEO Mike Coupe, was part of a strategy to “make our customers lives easier, offering great quality and service at fair prices, serving our customers whenever and wherever they want”.
12. Be prepared to change the plan
Knowing when to stop or recalibrate a strategy is key. UK retailer M&S decided last year to close its stores in 10 international markets where it was making a loss, including European markets such as France and the Netherlands. It will continue to operate its Irish, Czech Republic and, in a joint venture, Greek businesses. Rather than trading directly in the markets it is leaving, it will shift to working with franchise partners.
However, M&S continues to sell online into 15 international markets, of which 11 are in Europe. CEO Steve Rowe said, in half-year results to 1 October 2016, that these were tough decisions, “but key to building a future M&S that is simpler and more relevant, multichannel, and focused on delivering sustainable returns”.