Global Marketing

How Small Retailers are Fighting Back with Social Media

As international retailers continue to push for a seamless shopping experience in every corner of the globe, small retailers are forced to become increasingly creative in their fight to keep their heads above the water in the riptide of competitive retail markets.

Truthfully, it's hard to go against the raging tide of e-commerce mania and instant gratification that has taken over consumer's desired shopping experience. Small retailers simply don't have the operational bandwidth and manpower to deliver One-Click Checkout with two-day shipping the way Amazon does.

But perhaps the key to not only surviving but thriving as a small retailer is using the power of individuality that the digital world otherwise sees as a cause of conventionality. Social media platforms were initially a way for “hipster” individuals who sought a unique voice to be recognized, until they morphed into the next great marketing tool for big and small business alike.

Recently, there has been a general consensus that the use of social media platforms as a digital dart board for one's every passing thought or action has reached saturation points.

Yes, there are startling statistics on social media usage. With 11 new users every second and over three billion users across various platforms every month, social media is certainly not disappearing – it's just a matter of using it smarter, not harder.

2018 digital and social media statistics.

Instead of commandeering the use of Facebook, Instagram, and Twitter the way an international retail giant like fashion brand H&M might, small retailers need to go back to more simple ways to harness the incredible interactive power of social media.

Take Salt Creek Farmhouse, a rustic furniture business with husband-and-wife team who oversee everything themselves, from design to distribution. Conventionally, small businesses have been taught to use social media the same way big retailers do – with relentless, over-strategic, painfully obvious brand placements and advertising.

Instead, Salt Creek's Instagram, for example, features thoughtful photos of their products and/or small team of carpenters crafting their furniture and decor. None of their posts feature quick links to purchase or excessive detail about sales and promotions, the way conventional retailers do. Their Facebook posts are simply linked to their Instagram images and feature no splashy text or aggressive self-promotion. Their website takes pride in explaining the value of each step that goes into the process of their products and why customers who truly understand will endure the long wait for their orders.

An example of the handcrafted products offered by small retailer Salt Creek Farmhouse.

More small retailers have been taking note and using social media for what it truly is meant to be – a way to digitally socialize with their customers, and leaving the business transactions to websites.



Global Marketing

Can French Retailers Survive Amazon?

For centuries super market business in France has been simple, you know who your competitors are and outside companies are non-factors due to government protection. Well, this golden age is about to end, and all of this is due to Amazon.

In the past, French supermarket industry is dominated by few major players with each of them controlling relative equal share of the market. These retailer purchase directly from French producers who often have a higher price than the rest of the world. The reason why these supermarket purchase from domestic producers are because of the high tariffs the French government charges on imported products especially when it comes to agriculture industry. This allow these supermarkets to develop relationships and buyer powers over domestic producers creating a barrier of entry for potential new players. This however all changed with Amazon starting to make inroad into the French Market. The model of Amazon allow it to lower the cost of its products due to the fact that it has low overhead cost like rent for the physical retail stores. This change has caught the entire French supermarket industry off guard and they are scrambling to adjust.

Recently, Carrefour, one of the largest supermarket chains in France has struck a purchasing agreement with Systeme U in an effort to gain purchasing power over its suppliers. This is largely to cut cost, so it can compete with the low prices offered by Amazon. Another French retailer Casino is also in talk with Auchan to develop a similar partnership.

Image result for carrefour

Another way that these retailers are cutting cost is by forming closer relationships with Chinese manufacturers of non-food items. This method should allow retailers to decrease prices but it does come with the cost of running into bad publicity with the French public and government who supports its domestic manufacturers.

There are also talk of stricter government regulation to block certain supply chain access for Amazon. In fact, all of the retailers are investing a lot of effort lobbying for the support of the French government. Facing with the dilemma, French president Emmanuel Macron has promised additional funding for domestic agriculture products, as well as minimal farm prices to protect domestic farmers. These efforts will slow down Amazon's footstep, however it will draw fire from other nations and the European Union, as it defeats the whole campaign promise of Macron which is the greater unification of the EU.

In the end, French retailers need to reinvent themselves in order to compete with Amazon. Relying on the government is simply not enough to be successful in the long run.


Global Marketing

India: The Next Battlefield Between Walmart and Amazon.

For the past few years, the ongoing battle between Walmart and Amazon to capture market shares in the US market has garnered national attentions. The two giant retailers are throwing every trick in the books to try to defeat its opponents. Amazon for the past few years has acquired brick and mortar retail stores like Whole Foods in a effort to further penetrate the grocery market and establish a supply chain and distribution network to supports its growing eCommerce business. Walmart in term beefed up its own online retailing footprint while at the same time consolidate its brick and mortar operations to better position itself for the upcoming expansions.

Well, now it seems like the battlefield has spilled over to international markets. Walmart recently placed a $15 billion bid for 75% of India's eCommerce platform, Flipkart.  This transaction is looked at as a direct shot at Amazon for the following reasons:

  1. To start off, Flipkart is started by 2 former Amazon employees. What better way to annoy Amazon than acquiring a company started by its former staffs. Acquiring Flipkart will also allow Walmart to gain insider knowledge about the operations inside Amazon in order to re-position its own eCommerce division.
  2. Purchasing Flipkart will also allow Walmart to expand its own operations within the lucrative and growing Indian retail market. Currently, India's retail market is estimated at $800 billion of sales on an annual basis. The market is expected to grow to over $1 trillion over the next few years. Walmart had already establish a presence in India through brick and mortar stores, however these stores have not had the success that the company had hope for due to strict foreign direct investment regulation that the Indian government places on the retail industry.
  3. Purchasing Flipkart and entering into the Indian eCommerce space also present another opportunity of using this as a testing ground for new innovations. Even though Indian retail market is attractive, in the end what matters most is the retail market in the US and China. Through Flipkart, Walmart can practice strategies and innovation that it can later transfer to the domestic market. This is valuable because in the future it needs a more comprehensive and unique business strategy, if it wants to compete with Amazon who is dominating the online retailing space.

In the end, this is only the first salvo of shots that these companies are exchanging. In the near future, one should expect to see a cluster of M&A activities between these two companies in the hope of winning the retail market.


Global Marketing

International Retail Going Way Down Under in Australia

While the Australians may be known for their tourist-friendly charm and engaging landmark attractions, there is one aspect of the world Down Under that hasn't been so open to international visitors – and that's the retail market.

Within the past two years alone, multiple retailers have been forced to shut their doors in the face of plunging sales and revenue on Australian shores. International retailers such as Payless Shoe Source, GAP and Topshop have all been forced to close their Australian brick-and-mortar locations as the continent grapples with the onslaught of online availability from e-commerce giants like Amazon and Alibaba.

Watch the video below explaining what went into British brand Topshop's Australian demise:

Esprit, a fashion apparel line under Esprit Holdings Limited, is the most recent brand to collapse under the tremendous pressure to survive in Australia's harsh retail climate. The breezy, bohemian line of women's clothing would seem an idea match for the country's beachy lifestyle, but it proved to be no match for the existing competition. Esprit will be closing over 60 stores and laying off hundreds of employees.

Esprit CEO Thomas Tang cited the company's continuous struggle over the past few years without any turnaround as the reason for their exit from the Australian market.

“Esprit's operations in Australian and New Zealand have been loss making for some time, despite intensive efforts made by the teams in the past years…” Tang stated.

“In order to strengthen our foundation, the Group intends to withdraw from these markets and this will allow us to concentrate efforts and resources to other markets in Asia.”

Image result for Esprit store closing australia
Esprit is conceding to the pressures of the Australian market and closing all its doors throughout AU and New Zealand.

While the international retail world may be lamenting the seemingly impermeable loss of profit in the Australian market, local citizens and observers aren't as surprised at the global failings of otherwise successful companies. From an insider's perspective, as Sydney Morning Herald contributor and millennial consume Melissa Singer observed, many fashion brands take a condescending tone towards Australian retail, believing that the geographic distance from other major continents allows them to provide the country with much less variety, old stock, and outdated shopping experiences.

Even brands that proudly tout Australia as their home base have taken this seeming sense of disconnect from the rest of the retail world and abused it. Australian beachwear line Billabong was caught stocking Australian stores with year-old designs while saving the latest and greatest for the American market.

In contrast, Spanish fast fashion line Zara has reported solid earnings and saw a 16% increase in revenue in 2017 after renamping its operations strategy and bringing the same on-trend designs to Australian stores as the rest of the world. The opening of the company's online store in March of this year has added to the positive response by local as well who live in the more far-flung reaches of the continent but still value their retail experience as much as the urban citygoers.

So Australian retail players…take note. If you want your stores' profits to go up, don't treat Australia as a place to let experiences slide Down Under.


Global Marketing

What is the cause for record retail space closing?

90 million square feet. That is the amount of retail space that has already closed in 2018 and we are not even half way through the year. To put that number in perspective 2017 was the record setting year for retail closure and the total number of square footage closed for the whole year was 105 million square feet. What is worst is that CoStar is estimating more retail closures on the way. A large part of this is attributed to the bankruptcies and financial troubles of large retail chains like Bon-Ton, Sears, and Toys R Us.

Source: CoStar

Experts and insiders in the retail industry attributes this phenomenal to the rise of internet retailing specifically to the success of Amazon. While the rise of e-commerce is part of the reason why big chain retailers are struggling, it is not the only reason nor is it the most important reason. Currently e-commerce only make up around 9.1% of the total retail market in the US and 10.1% of total retail market in the world. This means that all of the senior management who complain to shareholders that Amazon is destroying their companies are simply looking for excuses rather than trying to coming up with way to improve performance. One example of the company that has adapted to the retail trend is Best Buy. It has introduced its own channel of online retail while at the same time improved customer interaction during store visits.

A much more logical reason for the retail failures might be that this is a correction of retail space because there are simply way too much retail space per capita in the US.  According to a Cowen and Company, the U.S. has 40 percent more shopping space per capita than Canada, five times more the the U.K., and 10 times more than Germany. This high level of retail space is not sustainable in the long run and with consumers more careful with their spending habit coming out of a recession, it should not be a surprise that all of these large retailers are going out of business.

Another possible reason for retailers closing shop might be the financial structure of these chains. Both Toys R Us and Sears are both high profile LBOs that have struggled financially to pay of debt. These LBOs are typically highly leveraged by borrowing senior and subordinated debts that have high interest rates. These interest rates cut into the profitability of the stores and the private equity firms who initiated these LBOs have very little retail experience.

In the near future, the outlook for brick and mortar is very grim. However there are opportunities that exist for smart and sophisticated retailers as they can pick up the slacks left behind by the big chains who have closed up shop.


Global Marketing

Amazon Launches International Shopping Experience on Mobile App

After CEO Jeff Bezos' 100 million Prime member reveal on Wednesday, Amazon hopes to add to that number with an international focus.

Thanks to a new “International Shopping” feature on the Amazon Shopping App, customers from various locations around the world can now shop for approximately 45 million products from the online giant's U.S. store. Image result for amazon international shopping

“We are always innovating on behalf of our customers, and with today's launch, we are making the shopping experience on mobile devices even better and more convenient for our customers who live outside the US,” said Amazon's VP of Amazon Exports and Expansion Samir Kumar on Tuesday. “The International Shopping experience solves this customer need and makes it simple to browse, shop, and ship…”

Through the mobile app platforms on Android and iOS devices, customers from over 100 countries will be able to join the 1-Click Order world. They can choose from five languages: English, Spanish, Simplified Chinese, German, and Brazilian Portuguese, and pay with 25 different currency types.

The ease and efficiency of the global purchase focus is part of Amazon's plan to grow continued sales overseas. International customers simply have to download the app and they will be integrated into the International Shopping experience, with their location automatically determined by their mobile device. If  they already have the app on their phones, then they can select the appropriate selection in “Country & Language” settings to determine what is available to be shipped to their respective countries.

Anyone who has shopped while abroad or ordered online from a brand not located in the U.S. knows how frustrating the details of international purchasing can become. Amazon has anticipated these challenges and will include information such as pricing, shipping costs, and import duty estimates for customers to include in their payment estimates. The company will also be working closely with global delivery services so that packages will not be held up in customs and delay arrival.

Image result for amazon international shopping


Interestingly, the International Shopping feature is only available at this time on mobile browsers and apps. Amazon's push to target more global e-commerce sales may explain the decision, as international customers shopping on mobile platforms before the feature launch were most frustrated by the numerous website navigational steps needed to determine global availability of items to their home country.

Amazon has made a great effort to infiltrate the global market with its tech and digital products as well. The Prime video streaming service is now available in 200 countries, along with a Fire TV stick made exclusively for international customers. The popular home assistant Echo is now sharing the voice of Alexa and her assistance in 28 countries.

Overall, Amazon's goal with the International Shopping experience is a simultaneous approach to the American and global marketplace. By allowing worldwide customer to purchase products from the U.S. store, the company is in a comfortable position to increase sales in domestic and international markets while further solidifying one of its four principles of business: long-term thinking.

Global Marketing

The Edit Welcomes Emerging Global Brands

As Americans, we are accustomed to taking the world by storm – a consumerist, more-is-more storm, that is. Conditionally, it is natural for us to hear about American-born brands crossing the Atlantic and saturating the international market. American companies are well loved, and not just by its citizens either – in a recent study conducted by social media analysis firm NetBase, it was revealed that American companies dominated the top two spots in most loved brands by Europeans.

Now it's the global market's turn to make their branding mark on the US. With the explosion of e-commerce sales coagulating markets formerly divided by continents, there are several retailers looking to establish physical roots on American soil.

In true harmonious market fashion, the opportunity for exciting international presence has opened its doors while others close on American ones. Roughly 7,000 U.S. store locations rung in their final sales in 2017, with analysts predicting another 3,600 closures in 2018.

Many of these locations were in shopping centers in urban cities, which leaves space in popular malls such as Roosevelt Field Mall on Long Island, New York. Owned by mall giant Simon Property Group, which manages 22 international and 206 U.S. centers, Roosevelt recently launched a pop-up retail exhibit called “The Edit”. Paradoxically, it's a permanent space for temporary brands and features, which has allowed international brands to test the US waters before committing to full-fledged locations.

The Edit in Roosevelt Field Mall, Long Island, New York.

This concept falls in line with tentative ideas that other retailers have been using as well. For example, Nordstrom launched Pop-In, a floor space that allows brands the department store doesn't traditionally stock to be available to a wider consumer base.

The Edit is a way for international e-commerce and social media super brands to connect with consumers on a tangible level. International retailers are already skeptical of the fickle U.S. retail market, and The Edit gives them a platform to test without the financial and strategic commitment of a standalone store.

Swedish brand L:A Bruket is one of the eight international brands that is currently featured in The Edit. The handcrafted home accessory and bath product line has received considerable attention since establishing a standalone space and is using the feedback to prepare a strategy to further infiltrate the U.S. market.

Sweden's L:A Bruket is taking on U.S. home interiors, one handmade soap at a time.

Another example of a European company taking a global brand stand is Parfois, a Portuguese fashion and accessories line with a cult following. The Edit is the brand's first foray onto American shores, and has allowed its previous demure-but-devoted line of fans to expand with a greater, commercial consumer base as well.

The Edit hopes to continue to feature more international brands, but also to incorporate lesser-known American lines taking on unique market niches.

“We created this idea to bring new, exciting brands to the customers,” says Simon's national director of business development Zachary Beloff. “This concept was created to for us to bring brands that the customers might be familiar with online…in addition to the retail, it's just creating this experience you might not see in a mall or shopping center.”

Global Marketing

Going Global: B2B E-Commerce

$1.2 trillion dollars. Five years. That is the approximate amount of money expected to be generated by international e-commerce B2B transactions, as estimated by Forrester Research, while the traditional business-to-business environment struggles to keep up with the blistering e-commerce pace of B2C activity.

E-commerce in B2B transactions are on a consistent growth pattern through 2021.

According to a white paper report by DHL Express with the UK's Cranfield School of Management, the shift to online shopping is affecting not just B2C transactions but B2B players as well. DHL's crossborder B2C shipment volume increased from 10 to 20% of their business just in the past year, and DHL CEO Ken Allen says “there is the same potential for crossborder B2B ecommerce.”

Cranfield also identified three different levels of B2B companies who are embracing the new e-commerce standard, from novice companies who are just opening their doors to online business, to intermediate companies who have grasped the fundamentals and are ready to keep up with the change, to innovators, who are truly the leaders of the pack when it comes to developing and incorporating technological digitization in B2B transactions.

Supply chain management will be key to effectively competing in the changing marketplace. There are five changes that the paper specified to maximize commerce growth, which included digital infrastructure, customer experience, customer personalization, seamless integration, and synchronized logistics.

Improved customer experience is the driving force behind all of the five areas of recommendation. Companies which can offer an easier online and mobile connection for their customers will focus on several vital aspects.

One essential change is seemingly apparent but surprisingly overlooked. Website performance and ease of use are driving factors in seeking an elevated customer platform, from accessible product catalogs to streamlined logistical processing and backend systems.

Many B2B companies become so caught up in the “logic” of more straightforward, need-driven business-to-business transactions that they forget the service experience that draws in a potential customer, hence the failure to notice the value of commercial websites.

Another crucial platform to address is that of flexibility in all facets of B2B customer relations and service. As an “international express logistics company,” DHL takes special interest in recognizing how companies in their industry are paramount to providing the flexibility that e-commerce deals require.

Instant gratification is a predominant element of the lure of online shopping, and numerous studies have shown how companies with quicker customer support, transaction confirmation, and delivery options can benefit from increased sales as a response to pressurized customer demand. This is no longer just an element of B2C transactions, but just as important to B2B customers who need the flexibility in their e-commerce logistics behind the scenes to fulfill demand. As a result, delivery and logistics companies' ability to guarantee not only a streamlined but transparent delivery process is an element of flexibility that is no longer a perk, but a prerequisite for evolving B2B companies.