Greg Zemor, Co-Founder of marketplace distribution solution Neteven, discusses how online retailers can capitalise on the differences between online marketplaces in Europe.
It is very easy for UK retailers to look at the internet purely from an Anglo-Saxon perspective. After all, US global corporations such as eBay and Amazon dominate so much of the tech and retail news in the UK that you'd be forgiven for thinking that they are among the only players on the world stage. The truth is that the European online retail scene is much more diverse and complex than most people imagine. However, when you think about this diversity it makes perfect sense. Online retail habits are a reflection of the cultural nuances and preferences of each country. It stands to reason that the browsing habits and preferred online retail sites in France, Germany, Spain and the UK will differ. The issue for online retailers in the UK is how to overcome these differences to ensure that their products have pan-European appeal.
While jack-of-all trade marketplaces such as eBay and Amazon dominate in the US and UK, prominent European marketplaces are generally specialised by category. For example, Zalando and Otto in Germany and La Redoute and Spartoo in France are leading fashion destinations, whereas FNAC, Cdiscount, PriceMinister and Rue du Commerce focus on technology and media.
The way European online retailers approach sales also differs between countries. In France, the period for online sales is traditionally very rigid. It is kept to fixed periods each year, with a peak during the 'Summer Sale' between 25th June and 29th July. Some European marketplaces such as Zalando, have gone as far as implementing a policy of zero reductions outside of pre-designated sales periods.
As in the UK, customer service is a crucial part of the online retail experience in Europe. However, as European retailers can be separated from their customers by language and cultural barriers, many marketplaces, including Spartoo and BrandAlley, have decided to handle customer service internally. This means that if you sell your product on either of these sites, their respective customer service teams will handle any queries or complaints from customers across Europe. For consumers, this all but guarantees a high level of service, and for retailers it removes the difficulty of potentially handling queries in multiple languages.
For UK retailers and brands aiming to build their customer base in Europe, one of the key ways to create visibility is to integrate the various European marketplaces into a multi-channel strategy. This allows the retailer to leverage the consumer base and marketing power of numerous marketplaces in several countries at once.
The most successful multi-channel retailers choose an assortment of their product catalogue to distribute across a range of specialist or general marketplaces. By carefully controlling the price and promotions, the most attractive offering can be tailored to each European country. In addition, by choosing marketplaces which offer additional services such as customer service and delivery, online retailers can make substantial savings on infrastructure costs and enable much more efficient delivery of products to customer across Europe.
To overcome one of the biggest hurdles of operating in Europe - multiple languages, many marketplaces such as PriceMinister, Cdiscount, Rakuten, FNAC and Rue du Commerce, also offer European Article Number (EAN) matching. This means that merchants do not need to translate their product data into different languages. They input one data set with an EAN and the marketplace does the rest.
Looking ahead, the major online retail trends in Europe will be based on convenience and logistics. What I mean by this is that a retailer's ability to compete will be based on its ability to offer products via as many channels as possible and deliver them via as many methods as possible. This trend is already borne out by the numbers: according to a recent study conducted by RetailMeNot, m-commerce sales in Europe are forecast to hit £19.8 billion, with purchases made on mobile devices accounting for 13% of all online sales in 2014. It is therefore crucial for retailers to use marketplaces that are optimised for mobile use or at least provide a mobile app. 'Click and collect' is also growing quickly across Europe. While most large retailers deploy this type of offering through their own shops, small retailers and online brands often do not have the physical retail space to make this offering viable. This is why there is an increasing move towards partnerships between marketplaces and large retailers, for example, eBay's tie up with Argos.
The reality of the online retail situation in Europe is that unless you are a huge global brand, you will not be able to gain enough visibility for your products without help. This aid can be provided by leveraging the expertise and customer base of the various marketplaces available in each in country. By using marketplaces that offer additional services and have an eye on future trends in Europe, UK retailers can ensure they can compete with their continental rivals while also saving money on infrastructure. In short, European retail is competitive and complex, however, this intercontinental rivalry has created an environment where more and more innovative products are being developed which UK retailers can leverage to help them compete.