Following a recent Net Media Planet event, the company’s marketing manager Carolyn Seaman, presents some key findings on international opportunity for UK retail brands, and looks at how paid search and display advertising can be effective routes for international expansion...
Optimising the International Opportunity with Search
By 2020 over £28 billion in UK online retail will come from international consumers. This is the staggering figure predicted by new research from OC&C Consultants and Google, presented at a recent event hosted by paid search specialist agency; Net Media Planet.
The event explored the size of the international opportunity for UK brands, and discussed how brands can successfully internationalise their businesses in order to capitalise on growing overseas demand.
Representatives from Google, Microsoft and Net Media Planet presented ideas and strategies they have used successfully to drive international growth through search and display advertising.
Understanding the Scale of the International Opportunity
The opportunity seems hard to dispute. Martijn Bertisen, from Google, explained that the UK is already playing host to a keen international audience with 13% of total online sales coming from overseas in 2012. If we look at particular sectors such as the apparel sector, this activity is even more dominant with an incredible 68% of traffic coming from international markets. The trend shows no sign of abating with international sales set to make up to 40% of total UK online sales by 2020.
Europe and Asia are recognised as the engines of growth owing to the increase in regional internet penetration and a growing middle class. This is coupled with changing purchasing behaviour which is moving online as more consumers seek out popular, international brands and broader product selections.
Of these markets, arguably the largest opportunity lies in China which is fast becoming the world’s next e-commerce superpower, with an active online population of over 500 million users. To put this in perspective, this is a larger online population than the population of Europe.
How to Expand Internationally Without Expanding Internationally
Despite the fantastic growth potential, e-commerce doesn’t necessarily make international expansion any easier. A robust business plan coupled with the appropriate local market knowledge is absolutely key; according to Sri Sharma, Net Media Planet’s managing director.
Search and display advertising can help to achieve these objectives as part of an international growth strategy. As Sri explained, search can help brands to build brand awareness in new markets, drive sales and help to build the international expansion business case. Referencing the phenomenal international success of fashion retailer ASOS, it was revealed that much of their growth had been due to having a strong search strategy. Using integrated search and display advertising, ASOS was able to build the brand and offer a favourable proposition in relation to local competitors.
With the case of high-end clothing retailer Karen Millen, they were able to use the insights gained from an international search campaign to help build their international expansion business case. Analysing data obtained during the campaign, Karen Millen was able to learn which target markets had the most business potential, and incorporate these recommendations into the business plan accordingly.
Delegates also heard how the Microsoft Store took one brand successfully into 40+ markets. While Microsoft is very well-known globally, Microsoft Store is not. The challenge was to build the brand in territories where awareness was low, and drive sales in markets where there was already some demand. Using the latest Google geo-targeting techniques, Microsoft Store was able to maximise their ad spend by only showing ads in regions and cities where demand was high and the propensity to buy equally so.
Clearly momentum for the international opportunity is gaining ground, and it is the brands that are exploring new territories which are beginning to reap the rewards. However, all speakers stressed the importance of the right approach to international expansion, explaining that moving into a new market requires thorough research and local market knowledge. So it is important to take the time to do your research and consult experts who can help support your successful market entry.
Five Things Every Brand Needs to Know:
As a takeaway, delegates heard the five key things that all brands need to know to help their international campaigns take off:
- Do the research - Google offers free and easily accessible tools to help brands understand the potential of new markets and execute successful market entry. These tools include; Google Trends, Google Global Market Finder and Google Translate.
- Understand your ad platforms - Research and focus effort on the search engines that drive the most traffic in that target territory, it’s not always Google! For example, in Russia this will be Yandex, whilst in China most internet users use Baidu. With Display advertising the platform gets more complex and fragmented, so it is important to understand which approach will work best for you and your business.
- Understand the local customer - Brands need to understand who the local consumer is. It is essential to learn how your local consumers buy online, how they start their shopping journey and the kind of promotional messaging that works best for them. For example the typical Chinese consumer is young, tech savvy and will most likely have been recommended your product or service by a friend.
- Localise your marketing - Ensure that your marketing activities are relevant to a geographically, linguistically and culturally different audience. Localising your marketing presence can have a big impact on conversion. For example, we heard that one well-known retailer increased conversion rates by +20% when landing pages and ads were translated into the local language, and a staggering 70% when their websites were fully localised and products offered in the local currency.
- Understand and differentiate from the competition - Look at each of your competitors and analyse the site for style, format and messaging. This approach should be replicated in new territories so that you can understand who you are competing against, what their proposition is, and ensure that you can offer something that is different and compelling. A good tip if you are looking to differentiate on price is to use www.skuddle.com, or Google Shopping for further price comparison insights.
More details on the event and presentations can be found on Net Media Planet’s website.