Retailers are developing online systems to increase cross-border sales for 2012, as the outlook for domestic economies continues to look weak, according to research.
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One quarter of European retailers believe they could increase revenues by 25% if they could sell more effectively online and across borders in Europe, according to findings from Accenture. The survey covered 146 European retailers from six retail sectors and seven countries.
Chris Donnelly, head of Accenture’s retail practice, said: “Because the market as a whole isn’t growing, every online sale takes away from physical sales. So that means there is a risk attached to not growing and developing the online business.”
Around 10% of consumers in Europe purchase across borders, says Donnelly. But he believes this will be the strongest area of growth. “It’s interesting how much the younger generation has a higher expectation of how easy it is to purchase items cross-border,” Donnelly said.
In some instances online channels are preceding physical channels in foreign markets, said Donnelly. “For instance, M&S opened in France online before it became a physical presence there. There are also instances where retailers may not have all channels in all of their markets.
Dan Lumb, head of e-commerce at fashion retailer Reiss, said the company’s strategy was to expand into new geographic markets. However, he said having a physical store in a new geographic region first was a good way to develop an online channel in new markets.
“If we’ve got a store in that market, we’ve got an animal there to start with, so it feels more organic to us to then expand online. If we’ve got people talking about Reiss offline to friends, we will then try and get them on the website. But we’d rather do that where we’ve got ground exposure first,” he said.
Juan Manuel Rebollo, senior executive at Accenture, said systems integration would be a key trend this year. “We are seeing high-performing retailers investing in technology to streamline and manage the cross-border differences in Europe. This investment will be critical in successfully negotiating the operational, regulatory and legal hurdles ahead of them,” he said.
But Accenture quoted one retailer as saying that developing an online channel exposes weaknesses in store process systems. “Multi-channel ‘click-and-reserve’ cannot be offered before achieving a very high level of accuracy in stock files,” it said.
According to research from Capgemini, shoppers spent a record £7.9bn online in December, a 16.5% increase on the previous year.