International expansion has been high on the shopping list for retailers and other consumer-centric firms in the last decade.
There have been huge successes, for example with the bricks and mortar and franchise strategy of luxury group Burberry, the concession model of department store John Lewis and the global e-commerce drive of ASOS boosting group sales.
Despite caution arising from the Brexit vote in June, retailers still have the desire to spread their wings. “The UK retail market is flat. If you want real organic growth then looking abroad is more important than ever,” says Paul Martin, managing director of Boxwood Insight at consultancy KPMG Boxwood
Nick Croucher, manager, Commerce and Industry, at Frazer Jones, would add. “Retailers are certainly looking to expand their customer reach and looking at entering new markets. However, the UK market remains an attractive market for further growth”.
Planning for growth
So what can retailers do to make their moves a success, whether within Europe or beyond? The British Retail Consortium recently held a conference entitled ‘International Retailing – Delivering Growth Strategies in Global Markets’. It looked at the importance of choosing the best expansion channel, customer interaction and people when launching abroad.
Karl McKeever, managing director at retail consultants Visual Thinking, explains why these are the key issues. “As the world becomes more connected it has never been easier for retailers to move into new overseas markets. However, a brand’s success and reputation when they do so hinges on their ability to deliver a consistent and positive customer experience and this requires investment in people and practices to ensure standards are as high as in their home market,” he states.
“You need to make sure there is the necessary level of training, support and communications to embed best principles and reflect cultural differences to achieve global consistency, just as Apple and Burberry have done.”
However, Martin of Boxwood fears that this focus on recruiting talent and managing HR functions, is often overlooked by retailers.
“Retailers have spent most of their efforts around where they are going to be located and the business model they are going to use but have not invested the time and money in working out operational structures including recruitment and HR,” he says.
Croucher supports this view: “Global ‘one-size-fits-all’ solutions don’t exist. Many organisations are trying to rationalise or group countries into regions but these structures are rarely fit for purpose and can stifle growth.”