The right way to avoid wrong international decisions
Web retailers need to take a close look at their international expansion opportunities and craft a specific strategy that fits each organization’s individual needs, Jim Okamura, senior partner, J.C. Williams Group, will tell attendees at the Shop.org 2005 Annual Summit in Las Vegas next week.
Some web retailers may want to take a very conservative approach and only test the market with a limited entry into a foreign country, Okamura says. To that end, they may select only one country or international market and then make only slight adjustments to their search engine marketing program, payments processing program and fulfillment center to conduct a test or evaluate an opportunity.
But for some retailers a “toe in the water approach” may be too conservative. “Going into a new foreign market could generate substantial new opportunity,” Okamura says. “Retailers have to ask themselves ‘Am I just showing the flag?’ or ‘Am I willing to take a bigger risk to generate a bigger reward?’”
Going global and selling in multiple foreign markets is moving up on the list of priorities at many U.S. web retailing organizations, Okamura says.
But whether they are a large multiple channel retailer or a relatively small start-up operation, both organizations face a similar set of questions and challenges. “Whether a retailer is big or small, they have to look at their position and see if it suits them to go overseas,” Okamura says.
U.S. web and multi-channel retailers are looking at more overseas opportunities because in many cases they have the brands that foreign customers want to purchase, he says.
However, whether a web retailing organization is big or small, the merchant needs to be very consistent and execute a flexible business plan. “Going global means that a retailing organization has to see themselves established in a particular market and adjust to the buying behavior of web shoppers in that country,” Okamura says. “What might be seen as mass merchandise in one foreign market could be considered more upscale in another. To expand successfully overseas, U.S. web retailers need to know their audience, their purchasing patterns and what will motivate them to shop and buy.”
Despite the obvious challenges of marketing, fulfillment and payments processing, 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 to meet goals and objectives retailers must stay focused. “You have to know what your competitive position is going into a new market and you have to create an organization that is specific to your objectives,” he says.
Okamura will be moderating a panel discussion entitled “Zooming in on International Expansion” at 3 p.m. on Wednesday.
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