Commerce Trends

by Manhattan Associates

Do European retailers need to become more international?

They might stand shoulder to shoulder, but when it comes to cross-border commerce, Europe’s retailers are worlds apart. Whereas we’re seeing many UK companies developing effective models for expanding internationally, many of their continental European counterparts are operating with a more domestic-focussed approach.

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Why is this? Well, there isn’t one blanket answer for every country, however there are some key trends across continental Europe that have historically impacted retailers’ ability to scale into new territories – although market leaders are quickly catching up.

The first of these is attitude. Many UK-based businesses – and indeed US firms – have had great success with ecommerce-led strategies, but it’s taken some European countries longer to perfect online shopping models in their domestic markets.

France in particular has experimented with several strategies to find the right approach. Initially, when internet shopping took off, many retailers decided to create separate brands for their ecommerce enterprises. However, this gave rise a complex situation in which their online and offline presence became segregated, yet increasingly consumers wanted to interact consistently with a brand across multiple channels.

To overcome this, many French retailers have embraced the drive store concept, creating a hybrid shopping service for customers. This has been incredibly successful on home soil, but the education and investment needed to make this model mainstream makes it a harder sell for new markets.

This isn’t the only hurdle European retailers are striving to overcome. Another major factor that has historically impacted international expansion is investment in the technologies needed to facilitate such growth.

An interesting recent article by Kurt Salmon’s Mark O’Hanlon pointed out that often fear of poor ROI prevents retailers from adopting the tools to create better customer experiences, but sometimes businesses need to speculate to accumulate.

For example, France, Italy and Spain all have great fashion brands that could be aggressively marching into new territories, however they need to put the operational systems in place to adequately service customers in additional markets.

In order to build the foundation for international expansion, continental European retailers must first focus on getting the multi-channel model right in their domestic market. This means gaining complete network inventory visibility in order to sell everywhere; something that can’t be achieved with legacy systems. More information on how to do this is available in our 4-step guide to profitable omnichannel fulfilment.

Intelligent order management software is critical to mastering the complexities of multiple channel, multiple region retail. By embracing the latest operational technologies, retailers will gain the flexibility to better serve customers on home soil, and the scalability to extend this approach into overseas territories – giving consumers in far-flung territories a taste of European style.