How retailers can achieve successful cross-border growth, according to an industry expert

Retailers have nothing to fear from setting up shop in new territories, says Jonathan Sheard, Vice President, Sales at ESW, if they follow a tried and tested partnership route that favours local knowledge, automation and teamwork.

In today’s retail and DTC climate, many brands believe that doing business is getting harder. A unique combination of economic pressures on customers, rising operational costs and new competition from low-cost retailers such as Shein, Temu, and as ever, Amazon, means that many retailers are struggling to retain their positions in the market while also trying to attract and keep new customers.

In the face of these pressures, many retailers will retrench and double down on their domestic efforts. But to maintain their position, brands should be looking outward to untapped markets beyond their borders. When planning to sell internationally, brands need to get it right from the word ‘go’, because getting it wrong is too expensive. It can be so costly, in fact, that some merchants have to abandon their international efforts altogether.

Many retailers are unaware of the size of the global opportunity, and are surprised to learn that shoppers in emerging markets, particularly in Asia, Latin America and the Middle East, have an appetite for international brands. This growing demand is largely driven by the rise of an affluent middle class and cultural shifts that place greater emphasis on personal luxury and status.

To reach these new customers, many brands turn to marketplace channels. A marketplace may offer an easy entry point to global customers, but the channel comes with steep costs and trade-offs. First, retailers are ceding control over their customer data to these platforms. This creates a disconnect between the brand and its customer base, preventing the brand from developing deeper insights into consumer intent and behaviour. In an industry where personalisation and tailored experiences provide as much value as the product itself, this lack of direct contact with the customer is  problematic, particularly as brands need to drive repeat sales and long-term loyalty.

Moreover, marketplaces typically charge commissions, cutting into the narrow margins that all retailers operate on. These high fees also limit the resources brands have to invest in more sustainable and innovative strategies for global expansion.

To truly unlock the potential of cross-border commerce, retailers must look beyond the marketplace and to a true direct-to-consumer approach. The most effective and efficient way to go directly to new markets is to partner with experts in cross-border logistics, compliance and customer experience. Working with a partner that can help manage the complexity of international trade allows the brand to maintain focus on its core business.

Jonathan Sheard Vice President, Sales, ESW

Such partnerships remove many of the traditional barriers to international expansion by managing customs and taxes, and optimising customer experience through localised checkouts, payment and delivery. By working with an international e-commerce expert, brands have the flexibility to operate in multiple markets without having to navigate the maze of regulations and logistics alone.

Local knowledge is particularly important. What works in one country often does not in another. Some markets, for example, impose high import tariffs, making it difficult for retailers to turn a profit unless they adjust their pricing strategies. Moreover, cultural differences, language barriers and consumer expectations must be taken into account. It’s not enough to offer global shipping. Brands must invest in translating their websites, localising marketing and merchandising strategies and offering a seamless shopping experience tailored to the needs of each region.

Among the many benefits of this approach is that brands own their own data, a rich pool of insights that enables optimisation across the supply chain, from order to post-purchase, as well as customer service. Armed with these insights, the brand can work closely with their partners to personalise the customer experience.

Another advantage of working with cross-border partners is that brands can consider more innovative business models that generate new sales and fit with their consumer values. Sustainability, for instance, is becoming an increasingly important factor in purchasing decisions, especially among younger, more affluent consumers. Retailers can no longer afford to ignore the impact of their operations on the environment.

One increasingly popular eco-friendly channel that is designed to generate new business, engender loyalty and enable retailers to demonstrate their commitment to sustainability is re-commerce. Re-commerce is the reselling of returned or second-hand goods through online channels. Brands that can integrate re-commerce into their cross-border operations stand to gain not only financially but also in terms of reputation, as they appeal to eco-conscious consumers who value both quality and responsibility.

Automating the many processes needed to deliver these programmes depends on technology. Brands need solutions that can be customised with their branding and offer the full range of locally preferred payment, delivery and returns options for each territory. This kind of flexibility is essential for scaling globally while maintaining the exclusivity and personal service that consumers expect. It also creates a more mature partnership model, where the partner is effectively an extension of the internal team.

By partnering with cross-border specialists, brands can maintain their identity and control while unlocking new markets. The benefits of this approach are clear; a seamless, trustworthy experience for the international customer leads to increased brand loyalty, higher spending and more frequent purchases.

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