Aussie retailers urged to turn tables on cross-border raiders
The ‘threat’ of cross-border online retail should be viewed by local retailers as an opportunity, according to industry experts, with seasonality and the power of Australia as a brand key opportunities for local operators to sell abroad.
While the popularity of overseas retailers and the GST-free threshold have been the subject of widespread criticism, the chance to turn the tables on international competitors has been largely overlooked by the industry.
According to senior research analyst at Forrester Research, Steven Noble, online exports are a neglected opportunity with the largest online retail markets around the world being many times larger than the local market. “International online sales represent a massive opportunity for Australian brands, as the Australian online retail market remains small in comparison to its global counterparts,” Noble says.
Managing director of ChannelAdvisor, Mark Gray, seconds Noble’s sentiments, pointing out that the barriers to achieving overseas distribution are lowering, and huge opportunities exist for seasonal products and the strategy of using Australian heritage as a selling point.
Gray believes leveraging ‘brand Australia’ can open up premium price points by emphasising the authenticity of uniquely Australian products, giving UGG boots as an example. “Retailers should be asking themselves ‘what do we have that is inherently Australian’ that can be branded as Aussie and sold across the globe.”
In 2011 Forrester’s research indicated that 58% of Australian retailers were making their products available to customers outside of Australia but only 16% operated transactional websites outside of Australia, and just 7% had offshore fulfillment centers. Without localisation, efforts to sell abroad were not expected to take off, according to the study.
Logistical barriers, the cost of localisation and the strong Aussie dollar have been put forward as the main barriers to cross-border sales, as well as a lack of knowledge about how to start entering markets aboard.
“When it comes to boosting exports, most Australian online retailers don’t even know where to begin,” Noble says. True localisation involves altering the total product experience for a foreign market and is an expensive proposition for most Australian brands, so Noble advises starting with an initial on a few key markets.
The logistics of local payment and distribution are lowering, adds Gray, pointing to PayPal and Amazon’s fulfilment services which for a small fee will take care of international delivery. Finding the right partners was another hurdle that once overcome can make the endeavour more achievable.
Australian retailers already making use of a cross-border strategy include skincare brand Aesop, surf wear giants Billabong and Rip Curl, health brand Blackmores, appliances manufacturer Breville, bag maker Crumpler and compression sportswear brand Skins.