The key to international expansion: scale globally, respond locally
The European Union’s proposed Single Digital Market represents an opportunity for a business of any size to expand into new regions. Set for introduction at the end of 2016, the legal changes are designed to tear down regulatory walls, merging 28 separate national markets with their own regulations to a single one. Although the move is tipped to contribute €415 billion a year to the European economy, it also means businesses could face increasing levels of competition from abroad, so they need to look to other shores to respond in kind.
Going global has traditionally proved difficult for even the biggest of brands. This recently became apparent for eBay, which re-launched its Chinese operation after spending a decade struggling to gain traction in the market in the face of local competition like Alibaba. After initially attempting to go it alone, the auction site is now partnering with JD Worldwide to ease headaches over languages, customs and, perhaps most interestingly, international shipping. This is especially true since, as Gartner recently observed, retailers’ supply chains must now be able to offer both global scale and local responsiveness to succeed. The good news for retailers is that when it comes to deliveries, it is possible to succeed on both a global and local scale by working with multiple carriers.
When looking at new geographies the physical delivery of items is something that can sometimes be overlooked, when it must be a strong focus. Here are three important areas businesses must address in order to make sure they can deliver when servicing customers in new markets:
1. Build a global network of carriers
While it’s great to have regular carriers you can rely on, restricting yourself to a small number is dangerous: any one carrier could encounter challenges and start missing delivery windows, suddenly put its prices up or stop delivering to a particular region. Working with a range of carriers protects businesses from these potential problems by providing redundant options to immediately fall back on if your chosen carrier encounters problems. It is also unlikely that one carrier will have a strong presence in every single country, so having a network of different carriers can make sure you service all customers in new countries with the same range of options.
Building a strong network of carriers will enable retailers to feel confident they can deliver on promises made to customers. However, these efforts may be hampered if it takes retailers a long time to on-board new carriers once they have been identified. Being able to scale quickly will put retailers in a much better position to expand rapidly and capitalise on new markets as they open up. Quick scaling can also patch any service gaps that appear, and offer delivery options to respond to increased periods of consumer demand in specific regions.
2. Create new efficiencies
When servicing customers in a new territory, it will naturally prove difficult to manage a growing logistics network and process a much greater number of orders. As such, retailers need to have clear visibility into their carrier networks so they can keep a close control on costs and offer an efficient service in order to compete in new territories. This will also mean that the service can offer the right range of options and at the right price point to be attractive from a customer point of view.
This is where cloud-based systems can make a crucial difference, especially for retailers that haven’t invested significantly in infrastructure. Cloud represents a chance to be more agile and compete with existing players, while allowing efficient management of deliveries in multiple territories. Businesses can scale deliveries in line with growth without being restricted by existing infrastructure. This means orders can be managed more effectively, and it will be easier to identify potential areas where efficiencies could be made.
3. Offer a seamless experience across multiple geographies
In order to truly capitalise on new markets, retailers must be able to scale delivery networks to meet increasing demand, and at the same time provide a consistent customer experience. Retailers of all sizes now need to look to new markets to grow their business; the days of just having a fairly static number of delivery destinations are now gone. Having the right supply chain processes in place to flexibly deal with a global network of carriers is now essential. In future, this could involve a customer ordering a product online on one side of Europe, changing delivery options on the move, and requesting final delivery to the other side of the continent.
Customers will demand the same level of service wherever they are, and retailers need to ensure that the promise to the consumer is consistently fulfilled across all regions. But to make this happen, retailers must avoid making the mistake of treating Europe as a single set of nations: each country has an individual culture for delivery and returns as it does for other shopping preferences. For example, in Germany customers prefer to pay by invoices rather than credit card, while the opposite is the case in Sweden. Consistently providing the same high level of service while meeting the cultural context of each country is key.
Seize the opportunity
By building a robust global network of carriers, creating new efficiencies and providing a seamless experience across multiple geographies, retailers can quickly gain traction in new markets. These principles remain the same whether it comes as part of a global expansion push, or to serve a new set of customers that has opened up closer to home as a result of the European Union legislation. It’s simple: without flexible delivery networks in place to quickly onboard carriers, retailers will be slow to react to new opportunities. They will be left in the wake of rivals who snap up their customers and speed into the sunset.
Niklas Hedin is CEO of delivery management expert Centiro
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