Clothing retailers going global with online stores: Datamonitor Retail

Geographic borders are breaking down in clothing retail due to a rise in the number of brands being launched in new countries through online offerings. Whilst this is a great opportunity for under-pressure retailers, competition will become tougher, says a new report on retail by Datamonitor.

Research by the market research firm reveals that although moving into new countries offers an increased customer base, retailers should think carefully about their strategy to ensure they have the basics in place, if they are to stand a chance of competing with local retailers.

''Unless retailers invest in some essential basics, there is a risk of developing a poor reputation before the retailer has a chance to formally launch,'' says Natalia Grabov, analyst, Datamonitor Retail.

Datamonitor identifies some of these basics as sizing details and simple to find delivery information. Also promoting delivery destinations is vital to ensure sales from multiple countries. 
 
Retailers can benefit further from launching localised online stores, the analyst firm believes. Though a costly strategy, Datamonitor says if the site isn't local it makes keeping shoppers happy harder due to a number of reasons, including logistics issues.

For example, it says, UK-based retailer Next doesn't have any physical stand alone stores in the US so shoppers have to return items by post and as they have a very limited time frame to do this, as well as the cost involved, the retailer has to work harder to ensure shoppers aren't put off.

One retailer to have ensured it launches into new markets using localised stores is Japanese company Fast Retailing. The retailer owns a number of brands including Uniqlo and has set up a physical store in each country where the brand has an online store. Importantly, each market has its own web domain and only delivers within that country.

''Uniqlo's strategy is undoubtedly more costly than launching only online stores first in a new country. However, it has its rewards as it is able to tailor its online store to that specific market. More importantly, it will allow Uniqlo to complement its online store operations with its physical stores,'' added Grabov.
 
''Over the next year we will see more retailers pushing into new markets and the different strategies they use will be vital in ensuring they are able to compete with the retailers in the local markets. Essentially in the online space it is all about speed, so those who can get into new markets without compromising their service will reap the rewards.''

Datamonitor Retail's research and publications provide executives with independent analysis of the retail sectors, key trends driving each, insight into the major players and forecasts.