With UK ecommerce sales growth nearing maturity, leading fashion retailers want to target new customers around the world. So how are fashion etailers getting in on the global action?
1 Research into usability, language and payment methods
Before businesses even begin the process of launching global websites, extensive research needs to be carried out. Foreign cultures, product preferences, different climates, languages and currencies, varying payment and tax systems and the myriad of possible delivery options must all be understood.
Gerry Cavender, marketing and communications manager for global payment services at RBS WorldPay, points out how much there is to learn about payment methods beyond the UK. Visa and MasterCard are important,
but in the Netherlands about 60% of online payments are made using iDeal - a direct debit system - while in the Czech Republic, paying 50% cash on delivery for goods ordered online is still common.
He says: “In Germany, ELV [similar to direct debit] is the preferred payment system so this requires the right technical connections with German banks, and probably a German bank account set up by the merchant.” New payment systems that offer international customers security and ease of use also need considering, for example PayPal, Giropay and Allpay.
Other issues to consider are how you integrate payment detail information into your existing systems, comply with emerging regulatory requirements such as PCI DSS (Payment Card Industry Data Security Standard) and monitor and protect against fraud.
“Having a single payment system that allows you to trade in multiple markets in a wide range of currencies is advantageous,” agrees Chase Paymentech Europe managing director and president Shane Fitzpatrick. Such a system keeps overheads low, helps increase checkout conversions and gives customers a first-class experience, he says. Recent research from Chase Paymentech found that 30% of UK businesses had international growth plans, but that 77% of those did not have payment systems in place to properly support European customers. “Merchants should understand their target market, most popular payment types and their associated costs, many of which are hidden,” says Fitzpatrick.
The usability of your site for overseas shoppers is also a key consideration. Mark Gunn, Europe, Middle East and Africa (EMEA) marketing director at web application performance management specialist Compuware Gomez, warns that different internet service providers (ISPs) and browsers around the world can affect your site’s performance: “Will your service work well on Australia’s ISP Telstra, or China Telecom?”
In fashion, rich content is in demand globally. “Our research into best practice for effective internationalisation has shown that fashion fans want rich content wherever they are shopping,” says Max Childs, EMEA marketing manager at cross-media solutions provider Adobe Scene7. “If you create a rich, engaging experience - ideally using visual filtering, lifestyle views of product, quick views, zoom, video, outfit builders and the like - you will have a successful website across different regions.”
2. Systems: managing orders, warehousing facilities and integrated systems
Robust order and despatch systems are vital for fashion businesses expanding their online global reach. Accessories retailer and brand Radley recently updated its transactional order system to accept international orders, and updated its warehouse management system to allow for the changes to warehouse despatch. It now has UK, European and US websites, and ships to 45 countries.
Radley head of ecommerce Kim Correia says: “We’d seen increased demand from customers to ship overseas so we embarked on this project to ensure quick delivery at the right price, to provide the most value for customers.”
Opting for a fully localised ‘shopfront’ and ensuring all services are available in the new countries - including ‘click and collect’ and returns through the store network, for instance, if the brand also has a bricks-and-mortar presence - will require web inventory management to be integrated with store systems.
Retailers are also improving their merchandise planning systems to take international web demand into account, improving stock flow to these new markets (see case study, above).
Steve Smith, senior vice-president EMEA at supply chain software provider Manhattan Associates believes the biggest obstacle for most etailers is their inability to bridge separate supply chains to create integrated stock management. “In many companies, order management, product development, procurement and manufacturing are separated from the final delivery process,” he says.
“To get a single view of inventory across the supply chain, all of these areas need to be synchronised so an organisation can run smoothly, can keep track of exactly where capital is tied up and can expand successfully into new geographical markets.”
Etailers often take a leap of faith when they begin to expose their store stock online, says retail software provider BT Expedite programme director for multichannel Jason Shorrock. “It’s a cardinal sin to offer goods for collection in-store if they aren’t there when the customer arrives.”
Best practice might be to only say ‘in stock in-store’ if there are more than two units available, to allow a margin of error. SMS text messages to customers can also be a good backup.
3. Delivery: free, same day, next day. Which to offer and how to implement
New Look is today delivering to 120 countries, while Marks & Spencer’s delivery network spans 81 countries, with an overseas order placed every two minutes. “Expanding the potential market through international exposure via the web can be a great way to build revenue and increase margin,” says Karl Wills, managing director of etail deliveries specialist MetaPack. “However, when not executed properly, overseas shipments and problems with returns can eradicate margin and lose customers.”
Customers all over the world want value for money, and fashion retailers are extending their ‘free delivery’ marketing strategies internationally. For instance, premium retailer Ted Baker boasts free UK delivery if more than £130 is spent, which translates to free delivery in the US for a spend over $200.
“Fulfilling from a distribution centre in the locality will make it easier to push down delivery costs, but of course you need scale first,” says Royal Mail head of international marketing Roger Morris. He suggests that only once fashion retailers are seeing more than £2m sales in a country will carrying and holding stock in the destination country make commercial sense. “For now, many etailers are happy with the transit times and prices for sending orders first class from the UK,” he adds.
Topshop customers in Denmark pay £5 a delivery and goods arrive in five to seven working days. To get goods sent to Hong Kong costs £10.50 but takes roughly the same time.
As demand grows, though, services such as next day or nominated day delivery will be required by overseas fashion shoppers, with customers expecting to track their parcels. DHL Express offers same day, time definite and day definite services to international markets, and expects to see these grow in popularity for ecommerce customers. From Royal Mail, Airsure is its fastest, trackable option, which is available to 30 destinations worldwide.
“Delivery costs have to be relative to the cost of the goods,” says Morris. “Some customers might be happy to spend £30 on express delivery for a £1,000 coat, but that amount won’t be paid for a £90 pair of jeans.” Getting returns right is imperative too, with many courier companies offering a fully automated returns service to cope with the 30% of goods likely to be returned. Royal Mail has just launched an international returns service into 24 countries, so customers can print a label from the relevant website and use local post service offices to send goods back with ease.
If you’re an etailer shipping beyond the EU, customs expertise will be important in selecting a logistics partner to meet business-to-consumer needs, says DHL Express director of regional sales Tony Cooper. “Some online retailers send all goods duty paid [DTP], from their own database,” he says. “Others don’t, but this leads to a poor customer experience as they don’t know the full price of an item. If you’re in Australia, have paid £200 for a bag, £30 for delivery and then receive an unexpected customs bill of £50, you won’t be happy.” Pre-warning the customer is the safest bet.
Boden: Growing country by country
Lifestyle brand Boden has opted to branch out internationally in stages, and today operates four different websites, catering for the UK, US, Germany and Austria.
The UK site went live in 1999, and the US followed soon after with a 2002 launch. Germany was the next territory, launching in 2007, and Austria in September 2009. Each site is tailored to the local market, with content translated where necessary, and local currencies and payment methods used. Product reviews are from local customers, and in the case of the US, customer queries are handled by a local US call centre, which opened in 2008. Shipping from the UK means Boden has not set up local distribution centres yet, so international customers must wait about two weeks for despatch, in the case of the US, at a flat-rate cost of $10 (£6.20) an order.
The international sites make it clear that customers may have to pay import duties and taxes “levied once a shipment reaches your country” and there’s a recommendation to contact the local customs office for further information before placing an order.
Jacques Vert:New IT system puts international on the map
Womenswear retail group Jacques Vert is overhauling its IT systems following significant growth in its online sales channels and increased focus on multichannel and international retailing.
“Things are definitely moving online and we have to make sure we’ve the systems in place to cater
for more international development,” says group finance director Ian Johnson. “Aligning stock management systems means we’ll manage this transition more effectively and provide our customers with better customer service.”
Managing multiple fascias - Jacques Vert, Planet, Precis Petite and Windsmoor - across different regions, sizes and styles means Jacques Vert must constantly analyse a complex range of products sold through more than a thousand outlets in the UK, Republic of Ireland and Canada, as well as via web stores for each fascia.
“We need to be more reactive and operate a more effective supply chain to remain ahead of the competition,” says Johnson. “This means continually monitoring trends and identifying best-sellers so that popular lines can be quickly replenished.”
Asos: Taking the pain out of shipping overseas
Young fashion etailer Asos delivers to 167 countries and launched its US site in September, while French and German sites went live in October. International growth will fuel the company’s ambition to become a £1bn business in five years.
To manage increased volume and destination of deliveries and returns while achieving the best price for carriers, the etail giant has worked with ecommerce deliveries specialist MetaPack. An automated solution has been set up, integrated with Asos’s order processing and fulfilment systems, which pinpoints the best carrier to use and automatically deals with international shipping nuances.
At the packing stage, Asos calculates the weight, required for air freight, as well as the exact contents of each package for customs documents. This information, along with the country of destination, is passed to MetaPack via an application protocol interface (API), a web services interface that lets two different web languages talk to each other, so it can decide on the eligibility of a postal carrier, and the number of copies and type of documentation needed. The documents are printed automatically along with appropriate carrier labels, saving the time and resources previously taken up in contacting the carriers for prices.
MetaPack can then provide an audit of the carrier selection, the chosen documentation and the management of tracking data so delivery can be closed off with an appropriate tracking status. The system maintains the transaction data for six years in case it is required for customs inspection. All this information is available through one screen, on one system, regardless of carrier. “Including all our deliveries through one process has improved our productivity dramatically,” says Asos head of customer logistics Stuart Hill.