The internet offers etailers a whole planet of customers – but delivering their purchases can be a world of trouble.
British fashion websites are virtual shop windows, which can be tailored to suit a French, Swiss, Japanese, or any other international audience. With annual growth rates for etail sales in other countries often double the current 12% growth rate for UK online sales, it’s easy to see why the likes of Arcadia, Boden, Thomas Pink and countless others are scrambling for international customers.
During the year to March 31, Asos launched country-specific sites for Italy, Spain and Australia – it already covered the UK, Germany, France and the US. Aurora Fashions says it will launch six international sites this year. Hobbs has been shipping from its UK site to 20 markets, particularly Australia, France and Germany, and so is developing local language sites in these three countries.
But even with ‘localised’ website front-ends, more often than not the delivery of goods is still from the UK. This means a lot rides on the home delivery and returns service. Getting international home delivery right can give you a competitive edge, and for this reason it’s a hot topic in retail right now.
“There’s a big difference between offering overseas customers the chance to buy from a UK site, and offering those customers their own site, tailored for the way they want to shop, pay for and receive the goods,” says Paul Kendrick, marketing director at home shopping group N Brown. “Quite rightly service expectations are high if you’ve created the illusion of being local. So you must ensure your home delivery – even if from the UK – doesn’t disappoint.”
He points out that flying goods to Indonesia is not much different to flying them to Inverness. “The parcel just spends longer in the air,” he says. But he agrees that costs, customs and returns complicate matters greatly.
Kendrick says N Brown’s plus-size Simply Be fascia had a “full launch” (localised web and catalogue) in Germany three years ago and in the US 18 months ago, and sales from both countries totalled £4.2m for the 2011 financial year.
International delivery to a few more countries is also possible through N Brown’s main UK site, and this will be opened up to the whole of the EU in the next few months. But for Germany and the US, N Brown wanted to “go in more aggressively” so there are dedicated sites and a call centre in each country, manned by local third-party specialists.
This ensures the customer service is in the right language, close to home, and makes these new groups of customers feel properly catered for. “Our Florida call centre for Simply Be has been pivotal in reassuring US shoppers that we’re a US home shopping business, albeit with a British heritage,” says Kendrick. “US customers really want a phone number to ring and for the customer service agent to understand their local needs.”
N Brown uses Hermes in Germany and DHL in the US for express deliveries, but has found the local postal services very good for standard delivery, making it possible to get parcels out in three to five working days. “The big issue with international delivery for our customers is not the speed at which they receive goods, but the lack of tracking of parcels that the international postage services provide,” says Kendrick. “That’s an issue we’re working on and want to be able to improve without impacting cost too much.”
Global logistics giant DHL says its fashion retail clients want bespoke services so new overseas customers aren’t disappointed. Dean Wyatt, vice-president of business development for retail UK at DHL, says: “Retailers realise that using postal services is fine for low-value goods, but for higher-value items, you need the service add-ons such as tracking and returns management.” He thinks overseas customers will be happy to pay for a reliable service, rather than rely on “post and pray”, but acknowledges the need for efficiencies that are slowly coming through.
For instance Wyatt says shipping orders straight from manufacturers – who might be in Turkey or China – is one way that fashion players are already saving costs, and he thinks there is scope for retailers to work together and consolidate their deliveries. “With shared-user storage, returns consolidation and combining loads, the operations can become leaner, and price to the customer could come down.”
Fashion retailers are finding that working with e-fulfilment specialists such as MetaPack and iForce or globally-connected third-party logistics partners can take the strain out of managing international home delivery. The use of ‘intelligent despatch engines’ – or parcel management software – to find the most efficient way to send parcels is now widespread. Torque, a logistics specialist in fashion retail, uses RedPrairie’s parcel management system to support clients including TM Lewin, Pringle and Sweaty Betty.
“The system will look at the size, weight and value of the parcel, destination, and required delivery date, and find the best courier service and route for each order,” says Vanessa Hope, Torque’s head of sales and marketing. “This means goods are often flown out to home addresses very quickly and efficiently, and the system even provides despatch notes and labels in the right language for the receiver.”
Consolidation of shipments, and working with leading international carriers and local postal systems, means deliveries can be made at the best possible prices, says Hope. “So retailers benefit from the volume rates we can work to, and it’s also very straightforward for their stock control and order management systems to be integrated with our system.” Torque can organise customs clearance and help retailers with tariff codes and the different paperwork for each region. There’s also track and trace.
Sean Fahey, solutions director for ecommerce at logistics specialist Clipper Group, says the biggest hurdle for clothing retailers who are extending delivery across Europe and beyond, is returns. “People don’t want to post garments back and then not see their money refunded for weeks. If they don’t trust the service or find returning goods too much hassle, they won’t buy from you again,” says Fahey.
Returns can be problematic agrees N Brown’s Kendrick. “A big thing we learnt is that with the open invoice system in Germany [where customers only pay when they have received and like the items] there are very high returns, and that took some time to get right,” he says. “Whereas in the US market, which we expected to be more complicated due to the customs element, we found it easier to get set up.” While Simply Be returns have been about 60% for Germany, they are below 30% in the US.
Innovations are helping. In the US, Simply Be customers are benefiting from Newgistics SmartLabel technology when sending back goods. With these intelligent returns labels, once the parcel re-enters the postal service its progress back to a consolidation hub can be tracked from head office, and customers see their account credited more quickly, reducing the volume of complaint calls and hopefully retaining customers.
Fahey at Clipper says while couriers have focused on improving the delivery of outbound goods to customer homes, they are not set up particularly well for returns management. With this in mind Clipper is in the process of building a consolidation hub in Germany that will be able to collect returns for retailers from mainland Europe and get them sent on cost-effectively and quickly, ensuring customers are reimbursed much more quickly. This will launch in the summer.
Improvements are coming thick and fast.
But fashion retailers waiting to see international delivery issues ironed out before they venture overseas risk failing to engage with these enthusiastic new audiences. They could miss the boat entirely.