Expanding into international markets is a growing trend for large retail companies and can be an exciting but challenging proposition.
As retail brands look to offer their product lines further afield by expanding their offering to untapped overseas markets, they need to consider their approach to not only to trends, tastes and innovation but also to people management. International retailers face a number of communication challenges as they look to expand beyond their national borders.
One Size Doesn’t Fit All
Expanding abroad is about more than getting the product right. It is also about understanding how business is done in other countries. No matter how innovative or creative a retailer is, if they cannot build successful local relationships they are likely to fail. It would be short sighted to underestimate the importance of understanding the mind-set and cultural diversity of local customers, partners and suppliers. Customer behaviour and expectations, presentation styles, supplier and employee relationships and local taboos are just a few important considerations.
Even across English speaking markets, there can be a surprising number of linguistic misunderstandings. British clothing retailers need to do a lot more than changing pricing from Pounds to Dollars for the American market. We have all heard examples of confusion and embarrassment due to different words used for clothing such as pants, trousers, knickers, vests, suspenders, braces, and jumpers. And there are also differences in sizing and measurement systems.
And then when another language is added to the mix retailers need to watch out for potential unintentional meanings of slogans and branding. How often have companies come unstuck by not carrying out due diligence before new brand launches?
More than Words
Getting the advertising right is not just about using the right words. Although most retailers are probably aware that the use of sexualised imagery in parts of Europe is unlikely to travel well, some might be shocked to learn that headless mannequins are required in Saudi Arabia to adhere to that country’s interpretation of religious laws, even before they consider what clothing to display.
Local rituals and customs should also be taken into account. For example, diffusers in much of Asia may remind customers of worshipping their dead ancestors and should be sold sensitively. Numbers and colours have different significance in other parts of the world. Cutlery or crockery displayed in sets of four could be a turn off in China where it is an unlucky number, yet considered appropriate for a western consumer where the typical family unit is four. Colours can also be symbolic. Be careful of white wrapping in India as it is associated with death. Blue is the colour of protection in some Mediterranean countries but the colour of mourning in others such as Mexico, Korea and Iran. A country’s national colours should also be taken into account as they may be off limits for clothing.
In some markets, quality might be more highly valued than quantity, making premium products and limited editions more attractive. Having a prominent designer logo on display could be less desirable in cultures where outward status is not highly valued. In other cultures, tradition and stability are favoured. Fairy Liquid knew this in a successful advertising campaign they ran a few years ago in the UK, reinforcing the product’s long-term reliability. Their campaign in Egypt focussed on its relevance to modern day life, using popular actors as endorsements, demonstrating an understanding of the importance of relationships.
Relationships, Relationships, Relationships
Building relationships with new partners also needs careful consideration, particular when entering markets where relationships are essential for doing business. More time spent on face-to-face visits is money well spent when trying to penetrate many Asian or Latin markets whereas greater reliance on transaction-based email correspondence might work between two western markets. And it is also important to consider who you need to get to know as well as how. Local as well as national governments, important local families or religious groups may all play a part in the success of your new venture. In some countries you will always need to work with a joint venture partner but not in every market.
Once the retail operation is up and running, managers also need to adapt the way they communicate with their sales teams. Methods of staff recognition and performance feedback might need to change as may expectations of autonomy and conformity. For example, a number of retailers have struggled to impose a uniform on customer-facing staff in France due to the high values placed on individuality. And expectations of good customer service are far from universal. The American full smile and ‘have a nice day’ approach has not always translated well to Russian or Eastern European markets.
The Cost of Poor Communication
International expansion has become an integral part of most large retailers’ strategy. Those who achieve the greatest success overseas are the ones that recognise the need to take a different approach to how they communicate with their partners, employees and customers on the ground. Miscommunication, cultural gaffes or poor customer service can all be extremely costly, wherever you are operating.