The road to international expansion in Retail has been successfully travelled but it is also lined with a lot of accidents and failures. But is it that easy?
“We are going to expand in to the U.S.!”
I heard this refrain many, many times. The growth and success that a Retailer experiences as they expand in their original, domestic market inspires a level of confidence in the company’s ability to expand beyond it’s geographic borders.
While it is tempting to think that just adding another store or another channel in a new country should be easy the reality is quite different. The subtleties associated with a new country and it’s market, demographics, customer behaviours, infrastructure requirements, brand awareness and culture can make global expansion risky at best.
Our recent blog post The Target Canada Story and the Brand Impact of the Supply Chain! is a great example of a company assuming that its success in its domestic market could quickly be replicated. Two years and several billions of dollars later the company closed its operations in Canada and retreated.
This infographic provided by Patrick Thuot at StoreTraffic SMS is a great depiction of the realities that Retailers must face when expanding globally.
Even if your company only does business via E-Commerce there are significant differences in serving customers beyond your country’s borders.
Some of the largest retailers in the world have failed in their efforts to expand geographically. And these companies have phenomenal resources, experience and expertise at their disposal.
So if you are planning to expand your Retail business ensure that you have a well constructed strategy. Even if the country you are expanding in to is very similar to your own do not underestimate the subtleties associated with launching your brand in a new country.
If you do not have a strategy then failure in the new country has the ability to destroy your entire company everywhere!