Cross-border commerce is a lucrative opportunity retailers can’t afford to pass up but selling across regions can greatly increase the supply chain’s complexity. Additionally, retailers need to understand each market on multiple levels, from preferred payment types to last mile expectations, if they want to achieve true success.
“There are a lot of mistakes you can make if you try to take a concept of one market and pop it into another,” said Greg Portell, Lead Partner in the Global Consumer Practice of Kearney in an interview with Retail TouchPoints. “If you try to move from Los Angeles to New York, even that’s fraught with problems. So if you start thinking about moving from New York to Mexico City, you need to find the right overlap.”
Some of the key considerations retailers should have in mind as they explore cross-border commerce possibilities include:
- Keep an eye out for demand signals: Cross-border expansion can’t be done on a whim, so look for ways to measure interest in foreign markets and properly position your value proposition;
- Find the right cross-border partners: Smart retailers utilize the experience and expertise of partners, such as marketplaces, that have operated in new markets for years;
- Understand challenges that can impact pricing: Retailers need to be prepared to offer a top-notch experience for customers regardless of local regulations and infrastructure; and
- Look to China for cross-border lessons: The Chinese cross-border market is very mature, which makes it an attractive country for Western retailers looking to find a new audience.
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