Smart retailers are always looking to new markets and with the advancement of the internet, international retailing is no longer the province of the big boys but how do smaller companies make the leap?
There are some steps that retailers can take to move their business into new, overseas markets.
Very large retailers with good budgets can afford to have a big splash, opening multiple bricks and mortar sites within days or weeks of each other. Most simply can’t afford this and we’d argue that this isn’t the sensible way to do it as Tesco found out.
Instead, successful retailers are more likely to use a crawl, walk, run approach to international expansion. Start small, test the water, reduce the risk. Then once the concept is proven in one area, roll it out to an adjacent region.
One of the shocks that often await unwary retailers from the US and UK is that many countries have very diverse and completely distinct regions with their own language, likes and dislikes. So for example, a concept that works well in the North of Italy may not work well in Sicily.
A sensible move is to build your brand online and then look to establish bricks and mortar stores in only your strongest regions.
If you have an offer that can be moved online then the cost of internationalising your website and promoting it overseas is small compared to opening up shop in a new country.
Think About Infrastructure.
Are you going bricks and mortar or online only? How are you going to stock your stores? Will you have a local distribution depot? How will customers pay you?
These are all important considerations and whilst it is nice to think about the front end of retailing, it is just as important to consider the logistics.
For example, taking the issue of payment; how do local customers like to pay? Do they prefer cash or contactless?
It’s sensible to look at solutions such as those by Merchant services offerd by UTP Group. You’ll need to have a way of taking money either through a hand-held device or, for online operations, a market-leading eCommerce store. UTP Group provide a range of payment solutions, such as card readers, card machines and online payment gateways.
Look For Markets That Look Like Your Home.
Possibly the best move, especially for a brand that is moving abroad for the first time is to choose a market that looks most like their own. For example, a Swedish supplier would have no problem selling into Denmark but would have major hurdles to overcome if they wanted to set up shop in China.
Look for a population that looks like your current customer base and a market that operates as closely as possible to the one you know. This will make the likelihood of success so much greater.
Engage With Local Help.
Most retailers will understand that they have to get things like shelf edge tickets and POS displays translated but a move to a different market with its language barriers requires more than that.
The difference in language isn’t just down to the use of alternative words as things like idioms, puns and jokes rarely travel well across borders. Consequently, you will need to make sure that you truly internationalise your offer.
Shoppers in different countries like to buy in different ways and expect different things from their retailers. For example, in the US it is the norm to have paper bags provided at the checkout whilst in the UK most shoppers will take their own bags to the till.
If a simple thing like bagging is so different between two countries that are so alike then you can bet that there will often be deep structural differences in shopper behaviour elsewhere.
Find some local help, either through experienced retail management or using local consultants who can advise on where these differences are.
Be Flexible And Adapt.
Probably the biggest mistake any retailer can make when entering a new market is to force a rigid, predetermined format on the unsuspecting population.
If you look at one of the biggest international companies, McDonald’s, they adapt their offer and methods to local markets.
Although you have a winning format in your own country, this won’t necessarily translate brick for brick to an overseas location so set up shop, get customer feedback and then be ready to adapt to local tastes and customs.
International Retail – Risky But Exciting.
We’ve highlighted some of the issues you may need to think about if you are looking to internationalise your retail brand but we don’t want you to get the impression that moving overseas is fraught with danger.
Making the international jump for a retailer is an incredibly exciting and potentially very lucrative thing to do and so we’d say the trick is to do your homework, stay adaptable and enjoy!