The overriding message from a panel at today’s World Retail Congress was that in order for retailers to expand internationally they must “think globally but act locally”.
The panel was moderated by Sir Ian Cheshire, outgoing group chief executive of Kingfisher, and consisted of Philip Mountford, chief executive of lingerie retailer Hunkemöller, Jesus Echevarria, chief communications and corporate affairs officer, chief executive of BoConcept.
The theme of the session was to tackle the question “Is international still a growth opportunity for retailers?” The panel were in agreement that it is, but highlighted some of the challenges faced along the way.
Echevarria said: “To become international is not in itself really anything, the priority to succeed is the model you choose for expansion.” He said Inditex began its international expansion plan back in 1975 and now opens around 350 stores a year and is in 88 countries worldwide.
Whilst Echevarria said it is paramount to have local flexibility, everything is controlled and defined centrally to ensure a consistent brand approach.
Mountford highlighted the need to research every market thoroughly and alter product and price accordingly. He said Hunkemöller adjusts about 25% of the product range to suit a new market and often refers to McDonald’s pricing (the price of a Big Mac at global locations) to adjust pricing according to the market. He said the success of international expansion for Hunkemöller is to reach sector critical mass in each new market – something which he said they have already achieved in Belgium and Luxembourg.
Talking about the shift to multichannel, Echevarria said: “Online requires immediacy, customer focus and good logistics. We had those things already so online fits perfectly well with everything we do.” Inditex is currently in 27 markets online and plans to continue to grow this side of the business.
Despite all of the challenges international and multichannel expansion can bring, Echevarria concluded the real strength of a business is in its people. He said: “The growth of this company in the last 40 years has been because of the people. Every business should be thinking about how to motivate your team and make them passionate about your brand.”