'Is attack the best form of defence?'

This article is brought to you by Retail Technology Review: 'Is attack the best form of defence?'.

By Denise Burkett, ClickandBuy.

It may seem counter-intuitive, if not downright risky, but rather than battening down the hatches and waiting for the recession to pass, some of the UK's biggest retailers are preparing to bolster revenues by expanding their online operations overseas. Their rationale? That with their models honed and re-honed in the ultra-competitive UK, grabbing a bit of market share elsewhere in Europe (and beyond) where domestic players are potentially less sophisticated, might be a realistic plan. Play.com, Amazon and ASOS are all examples of businesses that have recently taken this particular plunge.
 
However, international expansion is a path fraught with as much danger as opportunity. For retailers casting their eyes over the channel, it wont be as easy as translating the website, sitting back and watching the Euros roll in. And one of the biggest, yet least understood, challenges is payments.
 
Take the example of the much-loved and recently re-invigorated Marks and Spencer. Overseas customers can buy M&S products via its website. But only using credit cards. To a UK audience this may not sound like much of an issue. After all credit cards are ubiquitous over here. Leave our shores however and the picture changes dramatically. In Germany, for instance, there is no culture of paying on credit. Ask UK shoppers if they have a credit card and most will tell you they dont just have one, they have more than one. Get on a plane to Frankfurt and put the same question to German shoppers however, and 65 per cent will say they dont own a credit card of any kind.
 
In terms of payment culture this difference isnt just a footnote, its like the difference between sun and shade, between night and day. And for UK internet retailers toying with the idea of offering their products to new markets, its a truly fundamental point. To stick with the example of Germany, imagine going to the effort and expense of readying your web content and your fulfilment systems to service German customers, only to realise that your payment options effectively bar two thirds of German people from buying anything. Yet crazy as it sounds, this is exactly the mistake that numerous retailers, large and small, have made.

 
Looking at the rest of Europe, and then the rest of the world, the payment picture becomes even more fragmented. Most countries have multiple popular local payment methods that are totally unknown to UK internet retailers. iDeal in the Netherlands; CartaSi in Italy; Carte Aurore in France; Dankort in Denmark; Euro6000 in Spain. True international expansion means finding a way to accept payments using all of these local methods.
 
Another big issue is fraud. Most UK retailers have fraud screening systems in place, however these are generally only for credit and debit cards. But trading internationally and accepting the local payment methods introduces a whole new set of fraud screening challenges.
 
Finally comes the question of customer support. Extending your internet retailing offering to, for example, Turkey, France, or Holland brings with it linguistic challenges. If customers in these countries have queries or problems relating to a payment, you need to be able to handle these in the local language of the customer. That requires not only customer service teams that have expertise in payment processing, but who can deal with the attendant linguistic challenges. All of which is easier said than done.
 
So how do internet retailers solve these challenges? For many, the answer is to work alongside a specialist payment provider. Choose carefully though. To really seize the opportunities offered by international expansion, make sure you select a company that can support the huge number of payment methods used around the world, that is experienced at handling transactions in dozens of different currencies, and that can provide customer support in the languages you need.