Zoe Ripley, Marketing Director, EMEA for Channel Advisor explains to Retail Gazette about the opportunities for British retailers to explore business overseas in the e-commerce sector.
1.What is the opportunity for SME’s overseas? What are the benefits of exporting a brand overseas and what is the best way to do this?
If you have an online business, the world is your oyster. Forrester recently estimated that 8 to 10 per cent of online sales in the UK are cross-border and IMRG, the UK’s industry association for online retail, reported that cross-border sales in Europe were set to reach €36 billion in 2013, while e-commerce sales in Asia-Pacific grew more than 33 per cent to $332 billion in 2012.
Global marketplaces offer retailers access to new sources of demand. Whether catering to a niche audience or a more broadly targeted geography, emerging marketplaces represent a smart online growth strategy. Marketplaces like Amazon and eBay have significant volumes of active users and an infrastructure that consumers are familiar with and confident in purchasing through.
Marketplaces offer three strong benefits for retailers seeking to expand internationally: they come with a ready-made audience already shopping on the channel, alleviating the need for a local website; they have a robust marketing engine and a globally recognised brand that promotes trust among shoppers – driving traffic and revenue; and they offer programmes and services to assist retailers in their international expansion – such as global fulfilment schemes.
ChannelAdvisor suggests that retailers take a ‘passive’ approach by making English listings available for international shipping. This is a great way of gauging potential and demand. If successful, ChannelAdvisor recommends retailers then begin localising listings for international marketplaces for example eBay.de or Amazon.fr.
2. What trends are you seeing? Do British online retailers prefer eBay, Amazon or Rakuten? Do they prefer independent marketplaces. If so why?
A retailer’s preferred marketplace depends on the product they are selling along with the vertical they operate in. The global success of Amazon and eBay’s third-party marketplace models has led to an explosion of emerging marketplaces from new players and global retailers – Tesco, La Redoute, Newegg, Groupon Goods, Rakuten’s Play.com and Mercado Libre are just a handful of examples across the globe. These emerging marketplaces are growing fast. To put this into context, six out of ten Japanese consumers are members of Rakuten, Mercado Libre is the largest online trading platform in Latin America with a market of more than 550 million people, and La Redoute is the largest marketplace for clothes and home interiors in France.
In terms of preference, it is hard to decipher a clear favourite amongst eBay and Amazon for British retailers. Many online sellers are recognising the benefits of selling across multiple channels, enabling them to capture different audiences across different devices. Many don’t see it as a simple choice between eBay and Amazon, but look at these as two opportunities to grow their business. One very important thing to keep front of mind for any retailer is that these marketplaces have very high standards. They garner millions of loyal customers and generate millions in revenue because they have built trust with their customers; trust that only comes from repeated positive shopping experiences, so regardless of which marketplace they choose, they should work hard to ensure a successful customer experience.
3. What’s your forecast for 2014? What’s the future?
Product-driven advertising has become a powerful tool for retailers on social media outlets and we anticipate this will continue to grow. Pinterest, although a regularly new social media channel, has become a fundamental part of this strategy. It can be a prosperous way for retailers to generate exposure and interact with their consumer base. Already second — behind Facebook — in providing referrals to websites, it supplies at least three times the amount of referrals as Twitter. Buyers referred by Pinterest are 10 per cent more likely to follow through with a purchase, compared with visitors from any other social networking site. The visual nature of Pinterest can provide helpful information to buyers about a retailer’s brand, sharing products, drawing buyers to the retailer’s website and ultimately increasing their sales. We expect more and more retailer’s to harness this growing trend in the coming months.