International expansion has become an established route to generating revenue growth for UK retailers, but the logistics of moving products across the globe can often put a strain on efficiency and profits.  

International expansion has become an established route to generating revenue growth for UK retailers, but the logistics of moving products across the globe can often put a strain on efficiency and profits.  

Most retailers don’t want to talk about it, but some companies are racking up millions of miles by sourcing internationally and then distributing from a location that is far away from the original sourcing point.

As a result, many of the products being sold into an overseas market have travelled to the UK from one of the key manufacturing hubs (such as China, India or Turkey) and then shipped back out again. As a result, some international retailers may find that 15% of their retail sales have twice the logistics cost of the other 85%.

Furthermore, these products will have taken longer to arrive, and may not be entirely suited to the market at that time. This then has a knock-on effect for full price sales, meaning more products get discounted. For any retailer operating in the fashion and convenience market, what is already a slim margin can therefore be wiped out completely.

Retailers that find themselves in this scenario will need to build much better distribution channels – but will first need to determine what demand can be expected from key markets. In order to achieve this goal, however, they will first need to review their internal processes and also get better data back from the market more quickly. Only then can they adjust their supply and distribution channels with confidence.

Better data will ultimately be the key to achieving this goal, as it can help retailers in ensuring that their sourcing and distribution centres can be strategically placed to suit the demands of new markets.

This is something that companies like M&S, George at Asda, Tesco’s F&F and Gap are very much aware of, and why they are making changes to their processes to reach this point.

This may sound simple, but in practice it’s not, as supply chain technology alone cannot solve this problem. Some large retailers are likely to operate across 100 different departments, with many of them having sub-teams within them.

Communicating through traditional means of email and spreadsheets is therefore fraught with delay and inaccuracy.

New social business processes and platforms can transform collaborative performance inside the retail organisation, however, by providing the right information to the right people at the right time.

M&S, for example, has moved to a new planning application that allows every team to work collaboratively, follow other teams’ activities and easily update team members when things change.

This approach not only creates greater visibility, but also frees up the time needed to make better decisions about how things get done. Armed with this kind of information, retailers can support international expansion much more effectively by investing in new supply chains within markets that are already working very well, rather than wasting time and money in areas where demand is actually very weak.

Tristan Rogers is chief executive of ConcretePlatform.com which has helped retailers including Tesco, Walmart and Marks & Spencer expand overseas