‘Why expand into the US?’ is a question many multichannel brands will ask themselves. To David Lockwood, a better question is: ‘Why not?’
As he reminded guests at Piper’s latest GeekMeet – our regular roundtable of ecommerce minds from the consumer branded world – the US is not only 31 times larger than the UK but 11 individual states are bigger in size too. The GDP of California alone outperforms the entire British Isles.
Lockwood has spent more than 20 years launching brands across multiple countries – from start-ups to large global players. Most recently, he was director of marketing at Boden where he helped the clothing brand continue its overseas expansion.
He explained how having a shared language is usually the biggest attraction for those thinking about entering the US market. There’s also the ‘Britishness factor’ – a perceived stamp of style, quality and authenticity – which often goes down well abroad, particularly in the US. But relying on perception alone is no substitute for ‘doing your homework, understanding what Britishness means and how to use it to your advantage.’
Establishing whether or not your brand’s USP translates to a US audience is also key. It may need amending – for instance, Boden is seen as much more ‘fashion forward’ in the US than it is the UK – or changing completely. Finding the correct pricing strategy is vital too – and rarely reached by a simple exchange rate calculation. Depending on the product and the market, brands may also find they can charge a ‘Britishness premium’.
Shipping and returns policies are other huge considerations. Lockwood recommended shipping from the UK, certainly at first. ‘It’s quicker to send from London to California than it is to ship from US coast to coast.’
Then there are the dreaded tax regulations. He recalled how, in a previous incarnation at wine retailer Laithwaites, he had to ‘visit every county in every US state to obtain a liquor license – 136 court rooms in total.’ But, despite the complexities of the US market, the opportunities for scaling a brand make it difficult to resist.
For those wishing to spread out a little closer to home, Lockwood moved on to the pros and cons of European expansion, chiefly in Germany and France. Many bricks and mortar stores in Germany don’t trade on Sunday which makes it a peak online shopping day. But he explained that online shopping is not without challenges – German consumers have the highest rate of returns of any European country, so brands expanding there should factor this into their pricing strategies.
Meanwhile, ecommerce is growing fast in France but consumers still rely far more on collection posts than home deliveries – so finding and working with one of the collection location specialists is a priority. And while the US may win the award for the most burdensome tax regulations, France is just as strict when it comes to promotions. The word ‘sale’ can only be used at certain periods and for finite lengths of time, so brands must be very careful with the language used. Getting lost in translation is no excuse.
There’s a world of opportunity out there for companies seeking to maximise growth. Preparing well and, above all, listening to customers at every engagement point will help brands navigate the most direct and successful path.
For more information, please contact:
Leon Hughes, Associate Partner
Phone +44 (0)207 727 3842