Future of Retail: The international question
EXPANDING into international markets has increased as retailers have looked to grow amid the consumer spending squeeze at home.
Manchester Home shopping group N Brown has targeted Germany and the US for its plus-size Simply Be women’s clothing brand, while JD Sports Fashion – another of the North West’s star performers in recent years – has acquired established businesses in France and Spain and then used these new territories as springboards to establish its own shops there too.
For retailers – international growth online is, on the face of it, much cheaper and easier than opening physical stores.
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Rob Aitken, North West partner at accountants Baker Tilly, said:“The internet allows UK retailers to get international exposure at minimal risk. Otherwise expanding overseas can be a multimillion pound investment.
“You can use your main website to see where you are transacting most and then decide which jurisdiction should have a locally tailored website.”
Online retailer The Hut Group operates 19 websites across a range of consumer sectors – from entertainment and gifts to fashion and beauty – and has a turnover of around £143m.
Demonstrating the group’s appeal beyond these shores, 35% of total revenues come from international sales – with its zavvi brand well established in Spain and the Netherlands.
Chief marketing officer Andrew Booth points to cultural considerations when targeting foreign markets – even those in Europe.
“There are vast differences in how people buy online in different countries – in Germany for example, they don’’t like credit so we have to offer payment options,” he said.
Growth in Europe could be boosted by the possible introduction by the European Commission into a Common European Sales Law. A recent EU survey showed that 53% of the population buys goods online but only 9% felt confident doing so.
Hilary Ross, partner and head of retail at law firm DWF says: “Europe is very keen to change that figure and get people more comfortable and there is an opportunity for retailers in that online sphere.”
She says the proposed common sales law could be good news: “It will give more upfront information on rights to the consumer and will increase the business people are willing to put through online.
“It will open up the European market, give consumers more confidence in it and allow retailers to test the appetite of non-domestic consumers for their products.”
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