Yes, “Going Global” is a hot topic and you’ve probably attended numerous conference sessions over the past year. You need to embrace international markets because ecommerce growth rates abroad exceed those domestically; new customers in new markets create an opportunity to diversity, and/or because of you’ve been told to do so.
There are many ways to go global with many considerations, such as:
In order to understand where you and your peers are with international expansion, FitForCommerce conducted a survey of retailers, brands, manufacturers, and distributors to assess the state of cross-border ecommerce. We’ve analyzed the results by looking at the current international operations and future expansion of “going global”. Thank you to the ~60 respondents for their valuable input!
About the Respondents
- Heavy distribution of apparel retailers: 47%
- Even distribution across pureplay, ecom and traditional retailers
- Balanced distribution across no global sales to 10% in global sales
Current International Operations
- 70% expect to explore new international capabilities over the next 18-24 months; only approximately 20% expect to do so in the next 12 months
- Highest interest exists for expansion into Canada, Western Europe and Australia (all 30% interest)
High percentage (78%!) of those expecting to explore global expansion said they project international sales of less than $20M – which indicates conservatism and unknowns of future performances in these markets.
Approach to International Expansion
- 80% expect to leverage at least some level of internal capabilities as sales grew; 17% plan to outsource all activities
- Respondents appear flexible in how they plan to ship to consumers remaining open to options for direct shipment, leveraging a re-shipper, or package forwarder
The approach retailers are taking seems to indicate that they want to retain elements of control of their international expansion, seeking help in areas that they do not have the expertise in or the ability to keep current (e.g., tariffs, language, currency).
Even with the massive growth opportunity overseas, many retailers/brands/manufacturers still seem rather hesitant to take the plunge. Contact us to learn more about cross-border ecommerce – whether you’re in the thinking, planning, executing, or growing stage.
At the risk of disputing the reputable Captain James T. Kirk, space is not the final frontier… it’s Europe, and China, South America… potentially anywhere outside the U.S. Digital commerce technology has broken down many of the barriers to international expansion.
Having facilitated part of the Global Commerce Executive Workshop produced in partnership between FitForCommerce and Demandware, I learned a lot about international commerce. During the Workshop, we examined and discussed four different aspects of expanding into international commerce:
- Defining a Global Commerce Strategy
- Establishing Operations and Organizational Structure
- Addressing Technology Considerations and Regulatory Issues
- Executing Merchandising and Marketing Best Practices
Whether you define “international” as simply shipping outside the U.S. or a full-blown multi-national operation, you will still need a strategy. You must develop the business case, determine which markets to enter, and understand techniques for defining a consumer-led global strategy and for selecting the operational model for global expansion. Make sure to cultivate internal support and visit the market in person.
Operations and Organization Structure
Understanding the key factors for establishing on-the-ground operations is critical – and these include how to drive organizational alignment, readiness and team structure. External partnerships and expertise may be needed to compete effectively as a local brand. Define the right balance of centralized vs. regional staffing based on existing teams and regional needs/capabilities.
Technology and Regulation
Key technology questions, such as front-end site design for site optimization and hosting of commerce operations to address management and site performance must be considered. Key regulatory questions such compliance to local laws, adherence to local licensing requirements and establishment of the proper legal entity will need to be addressed. Leverage regional experts to understand critical legal constraints.
Merchandising and Marketing Best Practices
Creating a proper user-experience based on local consumer needs, including best practices for local language, currency, content management, payment, online marketing and pricing, promotions, shipping and assortments is key. The options are myriad and you might find yourself evolving from central, globalized content and merchandise assortment to a site that is specialized at the region or country level. It’s also important to create and leverage content assets for maximum appropriate re-use.
The full details and insights from our workshop will be available at www.fitforcommerce.com. Look for our complete write-up on the topic in coming weeks. I encourage you to download these materials to help as you consider your potential expansion into international commerce.
Good luck and enjoy the ride.
3 HOT TIPS:
- Define your strategy: including the rationale for the markets you are going after, and the business model to get you there (full internal, external partnership, full outsource, etc.)
- Consider your tech requirements: whether your platform can support multiple languages, currencies and server locations to drive optimal performance across vast distances.
- Understand the continuum: from “Global” to “Local” for merchandising and marketing strategies. Do you need one site in one language with one assortment, or an offer tailored to a specific country? Or a combination of both staged across a long range plan?