The looming prospect of Brexit and other global uncertainties have not suppressed retailers’ appetite for international expansion judging by the packed room at Drapers’ International Roundtable, in association with Ingenico ePayments and Oban International, at the Ham Yard Hotel in London, earlier this month.
Senior executives from Dune, Oliver Bonas and Kate Spade gathered to discuss how to expand overseas online and the overwhelming message was to “think global, act local”.
Dune international, franchise and wholesale director Ben Jobling said localisation is the key to success online and franchise partners can play a crucial role in helping to get it right: “The reason why we have these [franchise] partnerships is because we’re not the experts in these markets. They are.”
Kate Spade senior director of ecommerce international Ceanne Fernandes-Wong agreed that “on-the-ground” expertise – be it through franchise partners or hiring native experts within in-house teams – was a key ingredient for success.
John Sellwood, business development director at digital marketing agency Oban International, said retailers should not try to “awkwardly shove” their UK approach into another culture: “It works best when there’s a really deep understanding of what your brand means and a good understanding of local expertise,” he said.
But what does localisation really mean?
Translating the website and offering local payment and shipping options is part of it, however, Fernandes-Wong said it was ultimately about “understanding what your brand needs to be in a certain market and what levers you need to pull”.
Regina Lau, chief strategy officer at payment strategist Ingenico ePayments, said: “There’s a bit of a tug of war because there are lots of factors to control.”
And some customers can be temperamental. Fernandes-Wong shared the example of a luxury brand that experienced a drop in sales following the launch of its French-language website. The customers who had money to spend on the site preferred to shop on an English language website.
“If you have a very affluent customer, they might only want to shop in English as there’s a certain cachet to it,” she explained. “It’s about understanding what drives a market and knowing your customer.”
Taking the first step
The roundtable attendees were all at different stages of their international rollout. Around 40% of Dune’s sales come from overseas, and Jobling described the retailer as an international company of which the UK is just one of its markets.
By contrast, Oliver Bonas is at the beginning of its international journey and plans to launch its first overseas website in Ireland next year.
Katherine Saralis, omnichannel project manager at Oliver Bonas, said it wanted to take things slowly and thoroughly plan its overseas website.
“We’re still a privately owned, so we’re moving slowly and carefully,” she said.
Olga Szombathelyi, head of international at Ann Summers, admitted launching overseas could be “daunting”, but said small steps could be taken: “You can use your existing website and localise it slightly, just for the payment and shipping. When you decide your brand is big enough in a market, you can do a dedicated website. You can do it step by step.”
Szombathelyi said the first step in international expansion was to define what your brand was and where it should be positioned in the market. This would help to determine the best route to enter international territories.
Fernandes-Wong said that regardless of which expansion route is chosen, retailers needed to make a sizeable investment, and often made the mistake of not investing enough in online launches.
Making use of marketplaces
Ann Summers has opted to make its international debut by selling on marketplaces. This allowed it to build its brand before considering launching a standalone website.
Szombathelyi explained: “It’s not a case of building websites and they will come. You need to partner with Tmall, Zalando and Asos. They can help build the brand for you before you take that leap into stores.”
Many of the retailers in attendance agreed that marketplaces can be a valuable tool for overseas expansion.
Ray Clacher, executive vice-president at Trinity, which owns premium brands Gieves & Hawkes, Kent & Curwen and Cerruti 1881, said: “Don’t worry about the margin, [marketplaces] will build you a business. The Farfetches and Tmalls will do it better than you can. We embrace those partnerships globally.”
Clacher added that these marketplaces are more important in some countries than others: “In mainland China there’s no Google, so they search in a totally different way. If you don’t [go on Tmall], you haven’t got a business.”
However, he warned that product is sold in a “totally different” way on Tmall. Shoppers expect a plethora of images and videos, and tend to call a customer services hotline as they order a product.
Claire Arksey, global executive director, retail store operations, Urban Outfitters, advised brands to “be humble” when working with marketplace partners: “On Zalando, we were being deprioritised because of our photography. We felt we needed to protect it, but by holding on to it, we were never going to be top of the site.
Most of the roundtable attendees agreed that social media is important for international expansion. And localisation was key. Dune, for example, allows its franchise partners to create social content to make sure it is tailored for each market.
In terms of which platforms to target, Instagram was the “holy grail” for Kate Spade globally, however, in China it is focusing on WeChat.
“Having a strong WeChat game is critical in Asia,” said Fernandes-Wong. “The power of WeChat is that it’s not just a social platform – it’s a sales and CRM [customer relationship management] platform.”
Other social networks are following WeChat in becoming platforms that go beyond engagement to facilitate transactions. Attendees highlighted that Net-a-Porter and Adidas are using WhatsApp and Facebook Messenger to sell goods.
Payment specialist Ingenico ePayments helps retailers to maximise the impact of social media. Sangeetha Narasimhan, UK marketing manager, said: “We’re investing a lot in payments technology so you can buy through chatbots in Facebook Messenger.”
International expansion is not straightforward but by understanding how your target customer shops, and what emerging technology and platforms they are using, retailers can thrive far beyond their own borders.
THREATS AND OPPORTUNITIES
Social media is a great engagement tool but it can also pose reputational risks if not managed closely. Ben Jobling, international, franchise and wholesale director of Dune Group, said all platforms needed to be monitored constantly and customers should receive a swift response to complaints otherwise “negativity can spread like wildfire”.
Delivery can be a stumbling block for retailers fulfilling international orders from the UK, however, Jobling said a third-party logistics provider can take the stress out of the situation: “We only have to ship it to Heathrow. They will deal with it beyond that point.”
Regulation is set to make email marketing are lot more complicated, warned Andy Oakes, director at digital marketing agency Oban International. The General Data Protection Regulation is set to be introduced next year and will tighten the requirements around when brands can use data. Oakes urged retailers and brands to get up to speed.
- Claire Arksey, global executive director of retail, Urban Outfitters
- Ray Clacher, executive vice-president, Trinity (part of Fung group)
- Ceanne Fernandes-Wong, senior director of ecommerce international, Kate Spade
- Ben Jobling, international franchise and wholesale director, Dune Group
- James Knowles, head of commercial projects, Drapers
- Regina Lau, chief strategy officer, Ingenico ePayments
- Simon Maylott, head of ecommerce, East
- Miles Miller, retail project manager, TM Lewin
- Gordon Mowat, former interim chief operating officer, Jack Wills
- Sangeetha Narasimhan, marketing manager, UK, Ingenico ePayments
- Andy Oakes, director, Oban International
- Rosie Pearsall, head of international ecommerce, Boux Avenue
- Katharine Saralis, omnichannel project manager, Oliver Bonas
- Jeremy Seigal, CEO, White Stuff
- John Sellwood, business development director, Oban International
- Olga Szombathelyi, head of international, Ann Summers
- Camilla Tress, ecommerce strategist, Oliver Bonas
- Fabrizio Zappaterra, chairman, Temperley London
Drapers International Roundtable: Retailers look past Brexit and global uncertainty