Barclays’ have published some research revealing that two thirds of British retailers expect their overseas sales to increase over the next five years. Germany is the market most likely to provide growth named as their number one choice by nearly a quarter of retailers questioned, closely followed by China and Australia.
Richard Lowe, head of retail & wholesale at Barclays, explains: “The beauty of Germany, for clothing and footwear retailers in particular, is that it has a similar climate to the UK so there is no need to spend time and money adapting lines”.
Barclays’ research shows that over two thirds (68%) of British retailers currently generate at least some of their sales from outside the UK, however, the percentage remains relatively small, with the US currently the top overseas destination for British retailers.
Of course it’s a lot easier for online merchants to sell overseas in comparison to high street retailers opening physical stores. The Barclays’ research echoes this stating “When asked how they plan to enter their chosen markets in future, online is the top choice (62%)”. Of those retailers already generating sales abroad, 35% are said to be from bricks and 65% from clicks.
Seamus Whittingham, Managing Director EMEA at ChannelAdvisor agrees and believes all retailers should be taking advantage of overseas opportunities, but a carefully considered tailored approach is essential. Noting that cross-border trade is expected to account for 20% of all e-commerce by 2017 and a huge opportunity for retailers, he cautions “overseas markets are not a case of one size fits all and shouldn’t be regarded as the online equivalent of a gold rush”.
Seamus @ ChannelAdvisor’s Cross Border Trade Tips
To make a success of selling overseas, retailers need to tailor an approach that fits their business and identify the most suitable markets. Emerging markets such as China and India are often seen as the biggest opportunities, but the 13 largest online markets in the EU are already estimated to be worth €20bn and are growing at just under 20% per year. Therefore it will often make more sense for retailers to look to these countries in the first instance.
Germany itself does have good e-commerce penetration across categories and a cultural acceptance of distance selling in general because of their catalogue heritage. E-commerce represents around 64% of all distance selling in this geography. Fraud is also lower than other geographies, which makes it a more attractive destination.
The key thing is to make sure you get your local elements right; high quality translation, appropriate payment methods and reliable delivery and returns options are all vital and getting these local details right will often make the difference between success and failure.