Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
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Overstock.com has opted to outsource all international orders to one company, E4X. The e-retailer will ship international orders to E4X’s New Jersey hub. E4X is responsible for customs clearance, international shipping, package tracking and return shipping.
As will be the case with marketing to consumers in different countries, Overstock.com says there will be a learning curve when it comes to facing challenges involved with international order fulfillment. “I’ll know much more a year from now,” says Jake Bailey, director of international business at Overstock.com. “This is going to be a learning experience right from the first order.”
Timberland has European warehouses for its retail store operations and will use this infrastructure to fulfill online orders. But Timberland, like Overstock.com, says fulfillment of online orders in a foreign country is a new process that’s hard to gauge without experience.
“You are never going to know everything you need to know up front, and you have to have a certain amount of comfort with that ambiguity,” Brown says. “You’re going to learn after the fact no matter how hard you try not to.”
Brown believes a retailer can succeed by fulfilling orders from U.S. warehouses or foreign warehouses, depending on its goals. “It’s very possible the right thing for a retailer might be to not have a warehouse overseas, to find ways internally or to use a third-party service to ship across the ocean,” he says. “If you’re looking at global sales as a tertiary component, then going through all the infrastructure build-up is not the right idea. If this is a long-term strategy, then you have to take that into consideration.”
Setting up shop is one thing, facing the competition is another. U.S. retailers heading overseas will have to compete with local retailers for the hearts and wallets of online shoppers.
Overstock.com is confident it can take a piece of the pie, it says, based on the considerable feedback it receives from overseas online shoppers wanting to make purchases on its site. It also believes it will be competitive based on the e-retailing landscape in Europe.
“When you have a smaller number of players, as is the case in Europe, the web experience and customer service will not be as good because of the lack of competition,” Byrne says. “The competition in Europe will just not be as stiff as it is here.”
Timberland is putting its faith in its brand. When Timberland introduced its products to Europeans, the company positioned itself as a premium brand, selling at higher costs than other shoe and apparel retailers and opening stores on European high streets such as London’s New Bond Street. It was a strategic choice to position products differently from the U.S. The result: An established, well-known brand with strong customer affinity, Brown says.
Further, to best compete, it is migrating U.S. best practices in e-retailing to its overseas operations. “We’re putting people on the phone or on a plane to collaborate with Timberland country managers abroad,” Brown explains. “My team has been in Europe four times this year so far. One project was helping our French subsidiary build a web site prior to the e-commerce site rollout next year. This wasn’t part of our roadmap for 2008, but we embraced their idea and did it within six weeks to get a French online presence established now.”
While Timberland is confident in its brand appeal and best practices to help it be competitive in overseas e-retailing, Brown cautions retailers considering international e-commerce not to underestimate the competition.
“It would be an incorrect assumption on anyone’s part to say that because Europe is not as far along on the e-commerce adoption curve that they are not as savvy or astute,” Brown concludes. “They are strong in stores, and they’re taking the same principles we did years ago and extending them online.”