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FOCUS 6
THREE CHALLENGES
There are a number of challenges that I believe are essential for any retailer to properly consider.
Firstly, the obvious question of where to go? Not all markets are suitable. Are you prepared to operate in a foreign language or do you want to choose another English speaking country? Are you looking for somewhere near or far? Are you looking for a developed market that already has discerning customers, or are you prepared to enter a ‘wild frontier’ (not advised as a fi rst step!)
Secondly, a retailer needs to think about how they are going to expand. Do they want to own their own stores, take concessions, or the less expensive franchising route where you can also leverage off the expertise of the local partner? I know of some retailers who like to work with smaller franchise partners as those partners see them as a big part of their business – they are then important to each other. Other retailers like to work with franchise partners of scale as they’ve had better results that way. Every retailer will be different.
Thirdly, they’ve got to consider cultural differences and the implications of those. In Germany, for example, customers don’t like using credit cards but they do like to pay later (a hangover from the catalogue culture). In Japan, people don’t like buying in bulk whereas in the US they do. And so on.
The ownership structure of the company can make a big difference as well. Private companies where the owner takes a long term view can take their time to build business. But private equity backed businesses for example, are more likely to be looking for a quick return – so that could infl uence the best markets and models of entry to go for.
IN GERMANY, FOR EXAMPLE, CUSTOMERS DON’T LIKE USING CREDIT CARDS BUT THEY DO LIKE TO PAY LATER (A HANGOVER FROM THE CATALOGUE CULTURE). IN JAPAN, PEOPLE DON’T LIKE BUYING IN BULK WHEREAS IN THE US THEY DO.
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