Today’s digital-first society has meant that it’s easier than ever for retailers to break into new markets – with the right tools, of course – but there are a number of key considerations that must be addressed before taking the leap. This is according to global eCommerce platform provider Kooomo, which outlines that retailers must consider a whole host of challenges including licensing, warehousing & logistics, legal requirements, payment offerings, and configuration of commerce and content to name a few.
Ciaran Bollard, CEO of Kooomo explains: “With the success of online retail having skyrocketed over the past year, we’re seeing many retailers now looking to expand their business into other markets. But before doing so, it’s important that these retailers take a step back and examine options, test the market, create a plan and do a little soul-searching before expanding into a foreign marketplace.
“First and foremost, you must understand the difference between globalisation and internationalisation and which it is that you want to achieve. Internationalisation refers to the process of entering new markets with a general product or service with localised messaging and processes, whereas globalisation is the process of integrating your business into countries around the world, thereby having an effect on local economies.
“In either scenario, the key considerations you’ll need to make include:
1. Product demand
Firstly, is there a demand for your product in particular markets? Minimise risks by expanding into markets where you know your product or service is sought after. You might have had inquiries from potential customers in certain countries or you could seek advice from retailers already in those markets.
Before you even consider going global, spend time researching the markets that you’re interested in – gather industry and consumer data and pull together competitor analyses. A clear expansion strategy will be the difference between sinking or swimming.
2. Local legal requirements
Each territory will have its own legal requirements, so you’ll need to get familiar with the legalities associated with trading in each new market or country. For example, GDPR regulations in the EU effect any business trading in the EU, and other territories may have their own equivalent of PDS2 payment directive.
3. Do you have the tools?
There is a huge opportunity for retailers and brands to expand into new markets, but limitations and compliance often hold them back. Limitations within certain digital commerce platforms can often mean that if you want to trade internationally, you’ll need to set up multiple storefronts and manually input your product catalogue for every individual language and/or currency you want to sell in.
You should ensure your eCommerce platform has the ability to grow with you. You will also need to consider the new languages, new currencies, new taxes, VAT and regulations in which your site will operate.
4. Payment differences
True localisation goes so much deeper than basic languages and currencies. Accepting all major credit and debit cards for your international customers at checkout isn’t enough to make you an international player. Did you know that In Italy, prepaid cards are popular amongst online shoppers, while in Hungary, cash-on-delivery reigns supreme? Did you know that BNPL options cannot be the default payment method in Sweden, while in the UK it annually becomes more popular by 39% YOY?
If you want to make a successful international expansion, you should dig deep into all of the cultural nuances and preferences that exist.
5. How does your current supply chain fair?
Supply chain processes and systems will work a little differently when it comes to internationalisation – transportation and communication will be paramount to your success. When working with smaller quantities on an international scale accuracy is essential. If companies merely dip their toes in global waters, it’s not critical to redesign the whole supply chain network.
However, if the strategy is successful and starts accounting for a significant portion of the business you might need to rethink your strategy to accommodate the shift. For example, distribution points, contractual arrangements with 3PLs, warehouse designs or the level of automation.
Then there is the standard of delivery that you have set for your business. Locally, next-day delivery is easy to guarantee – but what happens when you scale up? Something that merchants often forget is that there is a huge difference between delivering items quickly and delivering items on time. You could use DOM systems in conjunction with the right messaging and content to ensure that packages reach their destination when and as expected.
Having the right tools to manage your supply chain will be vital for managing your operations as you scale upwards and outwards.
Ciaran concludes, “If expanding your retail business into other markets, it’s important that you set about this journey at the right time – wait too long and your competition might snap up the opportunity but dive too soon and you may run the risk of losing the market before you’ve even started. With an educated strategy, the right tools and effective localisation successful global expansion can very much be within your reach.”
If you’re interested in understanding more about taking your business to new markets, contact the Kooomo team to discuss further.