It’s often the smallest of things that make the difference between whether a business is a success or failure.
And, nowhere is this more true than when a business enters a new and overseas market.
Too often do firms assume that they can just replicate and implement their existing business and operating model in a new market and they will be successful. But, doing so ignores the, sometimes subtle, differences that exist between markets…… language (obviously), history, habits, geography, market maturity and cultural preferences etc.
Here’s some examples of the differences that exist between European markets in the online retail space:
- Payment
- In Italy, 29% of people do not have a bank account. To accommodate this, leading European online retailers operate cash on delivery services to cater for their Italian customers’ needs.
- Meanwhile, whilst the British and the French like to use credit cards when shopping online, the Germans, Swiss and Austrians tend to pay for their goods on invoice and make bank transfers for the items they decide to keep. Moreover, they can need up to 30 days to pay their invoices, because many of those customers tend to settle their invoices once a month along with all of their other bills.
- Delivery
- Recent research by Metapack shows that if UK customers can’t have their orders delivered to them at home then the most popular delivery option (68%) is ’click and collect in-store’.
- However, this differs to German customers who largely prefer delivery to ‘lockers’ that are close to their homes. Patrick Wall, MetaPack’s CEO, attributes this to the structure of their housing stock, where the majority of people tend to live in flats/apartments as opposed to houses.
- Meanwhile, in France, the most popular delivery choice for 76% of French shoppers is to have their orders delivered to a local shop, like a tabac.
- Returns
- Germany, Austria and Switzerland have a much higher rate of returns (30-40%) than many other countries. This is attributed to their long history with mail order and, as such, they are more comfortable with returning goods than many other countries.
- However, Italians traditionally don’t like to return things as they believe it is going back on the agreement that they have made with a firm/brand. However, knowing that being able to return things is an important part of the overall customer experience, particularly in areas involving clothing, Zalando, a leading European online fashion retailer, has developed educational TV pieces to help their Italian customers become more comfortable with the idea of returning items.
- Customer service
- Zalando also found that the Swiss tend to wake up earlier than their German neighbours and, as such, they want to have access to the customer care team one hour earlier. Therefore, in order to accommodate the needs of their Swiss customers, Zalando’s Switzerland team, who are based in Berlin, now come in an hour earlier so that they can provide the earlier service that their Swiss customers desire.
These examples seek to illustrate the range of differences that can exist between markets and how much companies may have to adapt their payment, delivery, returns, credit control and cash management systems if they are to deliver a market beating customer experience.
Simply cutting and pasting your existing operating model into a new market is not enough and could end up alienating many potential customers and posing a risk to your brand.
This post was originally published on my Forbes.com column here.
Thanks to Rona Proudfoot for the image.
