Entering the brave new world of online global retailing

Going global can certainly create a world of new opportunity for Internet retailers. But whether they are foreign retailers taking on the U.S. business-to-consumer e-commerce market or U.S. retailers eying online overseas expansion, a merchant’s strategy has to be grounded in reality and tailored to each organization’s specific business objectives.

Using the web makes it potentially easier and cheaper for U.S. retailers to enter into a foreign market when compared to the much higher costs of publishing a catalog or building stores.

But the planning process needs to be flexible and retailers need to allow for extra time, Ed Bussey, senior vice president and general manager of U.S. operations for FigLeaves.com, told attendees Wednesday at the Shop.org 2005 Annual Summit in Las Vegas. “You need to allow twice as much time for certain activities than you may originally think,” Bussey says.

FigLeaves, an online intimate apparel retailer headquartered in the United Kingdom, added a U.S.-oriented home page and a shopping cart that processed e-commerce transactions in U.S. dollars and began operations. The result generated more than $1 million in new U.S. sales in just under six months of the launch.

But Bussey advised web retailers not to go it entirely alone when taking on a new foreign market. “You are going to need partners that are local,” he says.

Delegating control is also an area where retailers need to be flexible. “To be successful you need to know when the timing is right to have a physical presence in a new foreign market and how much control the new office and staff will have versus what needs to be done at the corporate headquarters,” he says. "It can be an ongoing balancing act.”

Bussey, who spoke at the session entitled “Zooming in on International Expansion,” also noted that retailers need to be very pragmatic in planning their first-year business costs and sales expectations.