A step-by-step guide on how to branch out internationally as a retailer.
If you’re an Australian retailer that’s survived the past five years, congratulations.
Tough conditions have driven scores of local brands including Dick Smith Electronics, Pumpkin Patch, David Lawrence, Payless Shoes and Roger David, to the wall in recent years and some experts predict the rout is far from finished.
Last year, insolvency specialists SV Partners made the gloomy pronouncement that a further 1,500 local retailers were poised to suffer the same fate as these once-flourishing chains, including 18 with turnovers greater than $50 million.
Tackling international markets can provide Australian retailers with a golden opportunity to double or triple their turnovers, despite lacklustre conditions at home.
It’s a lesson upstart retailers like Showpo and Hello Molly don’t need teaching. These homegrown digital natives have been global from the get-go and today derive a significant percentage of their respective turnovers from overseas sales.
Expanding offshore is also working a treat for some of the country’s better established, traditional brands – the likes of Ksubi, Zimmermann and Tony Bianco. They’re all homegrown designers whose well positioned offerings are striking a chord with buyers around the world.
It’s a modus operandi that doesn’t only work for boutique brands. Bricks and mortar behemoth Cotton On has spent many years testing overseas markets and building a strong online and physical presence in territories where its cheap and cheerful value proposition resonates.
I’ve spent many years helping Australian retailers like these prepare for international expansion and can state one thing with confidence: their success has not been a matter of chance or good fortune.
Making a go of it in overseas markets requires meticulous and agile planning. Going in on a wing and a prayer can be a disappointing and potentially costly exercise.
Here are some tips for brands that are looking to dip a toe – or a whole foot – in overseas waters.
Choose your markets carefully
Sell online and the whole world is your oyster but when you’re starting out, it makes sense to focus your efforts on a handful of overseas markets which are relatively easy to enter. Your best bet is likely those where Australian brands are already well known and liked – think New Zealand, the US, the UK, Singapore, Hong Kong, Japan and parts of western Europe. While China, with its rapidly swelling middle class, may seem an obvious and highly lucrative target, it can be tougher to gain traction there, unless you’re prepared to invest heavily in marketing and promotion.
Look at your logistics
They might love Aussie brands but they don’t want to pay for them in Aussie dollars. Before you start spruiking your wares offshore you need to localise your currency and work out how you’re going to get the goods to customers cheaply and quickly. Online marketplaces like Amazon set the bar high when it comes to service and smaller retailers which don’t offer equally reliable and speedy delivery will be marked down accordingly.
Tailor the experience
Marketing campaigns don’t always cross international borders successfully. Localising your promotional activities to appeal to customers in your targeted territories will help drive interest and sales. It’s possible to do this relatively cheaply using Instagram and other social media platforms. Employing local influencers who’ll promote your product to their followers is an effective means of growing market awareness, often for a relatively low cost.
Find a strategic partner
An omni-channel approach can be the best way to build a strong presence when you’re the new kid on the block. Partnering with overseas outlets that will showcase your brand in the bricks and mortar sphere will raise brand awareness and, in the long term, drive more customers to your site. It’s a strategy which has worked well for upmarket fashion label Zimmerman whose presence in Saks, Bloomingdales and Barneys, all well known US department stores, has endowed the brand with considerable cachet and sent online sales soaring.
Get your house in order
You’re cruising for a bruising if you attempt to tackle offshore markets when your systems and processes aren’t in apple pie order back home. Excellent stock control and customer service mechanisms that allow you to cope with customer enquiries and complaints 24/7 are de rigueur for Australian retailers looking to make a splash on the world stage.
Work out what’s working
Digital retailing generates a plethora of data and if you’re smart you’ll make good use of it. Data analysis tools can help retailers identify where the majority of overseas customers are coming from, what they’re buying and when. Once you know what’s working, you can redouble your efforts in that area.
Embracing a golden opportunity
Australia is a market of just 25 million souls and, even in good times, making a success of it in retail can be challenging. Offshore markets can represent a golden opportunity for local retailers with quality well priced offerings to boost their turnover and profits.
Laura Doonin is the Director of Moustache Republic