By Gary Lombardo, Demandware
In today’s global commerce reality, expanding commerce operations worldwide remains a top priority for many retailers. In fact, at the Global Commerce Executive Workshop in Sydney, Australia in June, more than 50 retail executives and industry leaders gathered to discuss best practices and hear from successful Australian and New Zealand retailers, like Cotton On, Michael Hill, Apparel Group and Deckers.
While the executive workshop offered a number of insights, there were 5 key takeaways that really stood out when it comes to navigating the new global commerce reality. In this post, we’ll explore the first 2:
1. The global commerce opportunity is massive, but retailers should focus on the markets that present the largest opportunity for their brand.
Worldwide global commerce is a $1.5 trillion opportunity in 2014 and was a $5 billion opportunity for Australian retailers, specifically, in 2013. While North America, Europe and Asia-Pacific are the main markets for most retailers—and certainly the main markets for the Australian retailers at the workshop—retailers should focus on the countries that make the most sense for their brand. These regions can be identified by looking at some key criteria, like consumer preferences; economic, legal and regulatory environments; and local infrastructure.
Russia, for example, is an emerging market that could present a large opportunity for retailers. However, it is complex due to the predominance of Russian players in key areas like payment, social and search; vast distances and infrastructure challenges that make fulfillment difficult; and the relatively low adoption of consumer online buying behaviors.
2. Rolling out an online global commerce strategy varies from market to market.
There are a number of online channels designed to sell products overseas, like marketplaces, consumer shopping engines (CSEs), social marketplaces and direct-to-consumer (D2C) websites. D2C websites also have different ‘flavors,’ such as a non-transactional marketing site to build a brand presence, a partially localized website for cross-border trade, or a fully localized, transactional website with local operations and a local team to support it. Defining the right combination, and timing the launch of online channels, will vary for each market and will also depend on how mature the brand is in a particular geography. Often times, a gradual and iterative approach can work in a specific country where marketplaces, CSEs and a non-transactional D2C website are used to test consumer reception of the brand, followed later by a fully localized D2C website once the brand is proven in the market. In some cases, however, a fully localized D2C website may make sense immediately, especially if the brand is known through a retail store footprint or other means.
For example, David Williams, Director of Online, EMEA of Deckers, explained that when Deckers first launched internationally, it did so by shipping internationally from its U.S. website. They did minimal localization in the checkout process, which enabled cross-border trade. They also learned valuable lessons about each market, which provided helpful guidance when they decided to iteratively launch regional sites, followed by launching fully localized, D2C websites in each country. Today, the retailer has 6 brands successfully operating 15 sites across 6 different countries (Source: Deckers).
Check out the next 3 takeaways here.