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Internationally speaking: multi-channel opportunities for Brits abroad
By Qusai Sarraf, CEO, multi-channel and global retail expert IVIS Group
British retailers lead the world in multi-channel retailing. Tose who crack the formula for providing international customers with a seamless experience have huge opportunities to build profitable multi-channel retailing operations worldwide.
Te BRIC countries - Brazil, Russia, India and China - combined represent over 40% of the world’s population, and analysts predict that by 2050 their total economies could eclipse the combined economies of today’s richest countries. Internet penetration is still comparatively low and centred on major cities, but their ecommerce market value already exceeds £69 billion. Tese countries clearly offer a powerful combination of rapid economic growth and speedily rising internet audiences. Appetite for British brands in many regions of the world is
high, being particularly widely respected and sought after in China and South East Asia. Te British government has recently entered into an agreement with Alibaba’s TMall and the online platform
Shangpin.com to bring British business into China, where it will provide support and expertise to British brands looking to establish a presence there. Once regions are identified, which methods should a retailer or brand employ to work out how best to sell in each territory? Ultimately, as for the domestic market, the overall strategy should be to place the customer at the centre of every decision made. Companies need to assess the “7Ps of Internationalisation”:
Positioning, Product, Partnership Process, Promotions, People and Platform. Tese activities need to be looked at for each market, as with
internationalisation comes a fresh new set of multi-channel challenges – commercial, operational, cultural, technical and legal to name a few. While British retailers want to give international customers
the fully connected, convenient experience that omni-channel customers enjoy at home, there needs to be a degree of localisation and customisation. Tis is necessary to ensure the diverse cultural tastes, shopping behaviour and legal requirements in the international markets are taken into account. To illustrate such intricacies, there is a perception in China that
web prices must be lower than offline. Tis has certainly been true up until recently and as a result, British retailers need to take the price-sensitive segment into account. In China you have to include platform / revenue channels such as TMall, JD, DangDang and Pai Pai. Also, you cannot assume in a country like China that a brand can be positioned for the entire market. You must position for specific regions or cities as there are huge differences between cities in tiers 1, 2, 3 and 4 in terms of commercial maturity, and even between cities in the same tier in terms of style and shopping experience.
Direct Commerce |
www.directcommercemagazine.com WeChat, the Chinese equivalent of WhatsApp, comes with
many commercial applications that do not exist in Western markets. Customers are able to link their WeChat account with their bank account. Tis means shoppers can use WeChat to scan QR codes and pay with their phones, which makes impulse buyers a great target. Te influence that social media has on purchasing power is
unprecedented. In China, 70% of purchases are led by social recommendations or reviews. Customers now also expect rich information about the products they are purchasing. Looking at the US, this market also requires different
positioning and marketing for many parts of the country ranging from the East to the West coasts; acknowledging different lifestyles and trends. With a federated approach to tax, as well as distribution and delivery, the US market presents the same challenges for retailers trying to deliver the best possible customer experience consistently across channels. In the US, as with some markets in Eastern Europe, there is still a strong coupon culture. Customers take comfort from physical forms of promotion, and these will need to form part of an overall promotional strategy across in-store and online. Russia meanwhile has seen gradual acceptance for multi-
channel shopping but faces the huge challenge of logistics. Te current carriers struggle across Russia’s nine time zones and are seeing a quarter of deliveries being refused at the door. Cultural differences will also affect whether UK retailers should
follow the same process for both domestic and international operations. In many countries people are far more connected than we are in the UK. On a train in South Korea for instance, it would be difficult to see anyone not using their smartphone. So the immediacy of customer requirements can be challenging. Te approach of a business will inevitably differ according to the availability of smart devices in each market. Te need to differentiate, innovate and propagate your business
is crucial if you want to succeed in the current climate. Examples of new business models born out of customer-centricity and challenging retail as we know it include own brands moving to marketplaces and selling via other merchants, different brand websites, white labelling, affiliates and flash sales - all of which can be successful for both domestic and international markets. For each business model, the target segment, ranging and how
they reach consumers and deliver goods need to be clarified. It is also important for retailers to understand that upon implementing
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