When you’ve reaped retail success in the U.S.—or have been approached by international customers for your product—it’s natural to set your sights abroad. After all, total global retail sales in 2020 are projected to amount to nearly The outlook for international brick-and-mortar retail is sunny: In Great Britain, for example, the British Independent Retailers Association shows that more shops were opened than were closed in the first quarter of 2017. This was an increase of 414 shops in the first three months of 2017, compared to a net increase of just 4 shops for the same period the previous year.
International expansion can mean wonderful things for your retail store, but it’s critical to take the right steps before opening up shop. Rules, customs, finances—they are different in every country. Here’s what you need to think about:
- Research customer shopping habits. Find out who they are, what they buy, and how they shop. Example: Pitney Bowes found that while people in most foreign markets prefer to buy apparel and footwear in person, Chinese consumers are more likely to buy these items online. You also should consider localized product assortments. Preferences are different across borders and it is critical to take assortment, sizing, and fit into account.
- Understand the local culture. Don’t assume a “one size fits all approach” will work. Pay attention to the differences in communication style (even standards for humor, jargon, and gestures may be different). And account for translation errors as well. Example: the literal translation of KFC’s infamous slogan “Finger-lickin’good” in Chinese is “Eat your fingers off.”
- Hire local support. You need a team that knows the language, customs, and laws. A local lawyer, accountant, and a real estate agent are a must. With all the new regulations around data and fiscalization, it is critical to know all of your responsibilities.
- Think through payment options. How do your customers prefer to pay? Will your store have integrated payments or use external terminals. Will you accept all the forms of payments that are relevant (bank cards, credit cards, apple pay, paypal, etc).
- Analyze pricing models. Pay attention to your competitors’ prices within the market and the country averages for specific types of products. Example: In the U.S. the average pair of jeans is $34, but in Switzerland it’s $153. This may mean that you need separate pricing structures for products sold globally. You also need to take exchange rates into account to make sure you maintain your margin goals.
Globalize your technology. Your local IT infrastructure must be compatible with your domestic one. Invest in a system that can be used seamlessly in other markets; use it for everything from ringing orders to tracking revenue to managing inventory. As we live in a global world and economy, you want a global system rather than disparate systems in each market.