When it comes to expanding online overseas is it better for retailers to launch dedicated websites for each market, or is the expense not worth it?
Why are we talking about it now?
Retailers are increasingly taking the opportunity to expand overseas by launching dedicated websites for particular countries. In the last couple of months Asos has opened sites in the US, France and Germany.
Marks & Spencer boss Marc Bolland said at last week’s results that an international roll-out of its multichannel operations would begin next year and Debenhams is launching a Republic of Ireland site, trading in euros, as the first step in an international online offensive.
But can’t retailers already sell to overseas shoppers through their UK sites?
Yes, and many do. But there are challenges with that approach and opportunities in tailoring the model. Asos has customers in 167 countries, but chief executive Nick Robertson believe business is best done in a different way to capture sales from the 97% of internet traffic that occurs outside the UK.
He points out that sites in foreign languages improve trust levels and customer conversion rates and that the way sites are promoted on search engines such as Google changes - Asos’s UK site will not feature on searches in the US, for instance, but its Stateside site will.
Does currency matter?
M&S sells in sterling at present, but one of the reasons it will come off its Amazon technology platform is to enable trading in other currencies - as Asos can. Similarly, after testing its Irish site Debenhams will be able to sell in euros elsewhere. Debenhams’ ultimate aim, says deputy chief executive Michael Sharp, is “any country, any currency”.
So there are as many differences between operating online internationally and domestically as there are in running shops here and overseas?
Aspects such as cultural difference and the fundamental proposition can be as important online as when opening bricks-and-mortar stores. Consumer preferences and attitudes, while they may remain distinct, show signs of increasing convergence - particularly among young shoppers.
Robertson is in the fortunate position of appealing to a globalised 20-something consumer, for whom the internet is central to life and whose preferences are shaped by an increasingly globalised celebrity and fashion culture.
The big difference between dedicated overseas websites and opening stores internationally is exactly the same as it is at home - the overhead costs involved are far lower.