Greg Zemor, co-founder of Neteven takes a look at how UK retailers can reach new customers in Europe via online marketplaces.
With eBay and Amazon dominating so much of the tech and retail news in the UK, it would be easy for UK retailers to assume that they are among the only players that matter.
In fact, the retail scene in Europe is far more diverse and complex than many imagine. Tapping into the pool of Europe's 300 million consumers is the dream, but consumer habits in France, Germany, Spain and the UK all differ.
The main issue for UK retailers is having a tailored approach to overcome these differences and ensure the pan-European appeal of their products.
One of the crucial differences is that in the UK and US, generalist marketplaces such as eBay and Amazon tend to dominate, while in other prominent European markets, online marketplaces tend to be specialist and focus on a specific category.
Another variation is in the peak sales periods for European retailers. In France, the main periods for online sales are rigid and fall within certain dates each year, with a peak during the summer sales between 25th June and 29th July. Some online marketplaces, such as Zalando, have policies in place to ensure that there are no price reductions implemented outside the pre-designated sales period.
One thing that unites the online retail experience in Europe is the importance of customer service. Some marketplaces, including Spartoo and BrandAlley, have decided to handle customer service internally, with queries and complaints from European customers being handled directly by these sites on behalf of the online retailers.
For UK retailers looking to expand their brand and reach new customers in Europe, one of the best strategies for creating visibility is through a multi-channel strategy, integrating with relevant European marketplaces. This will allow retailers to tap into the customer base and marketing power of numerous marketplaces in multiple geographies simultaneously.
Multi-channel retailers that have seen great success tend to choose an assortment of their total product catalogue to distribute on a range of specialist or generalist marketplaces. By carefully controlling prices and promotions, the most attractive offers can be put forward to each European country. By choosing marketplaces which offer additional services, such as customer service and delivery, online retailers can save a lot on infrastructure costs.
Another way that a lot of marketplaces help retailers to combat one of the biggest hurdles of operating in Europe – language barriers ¬– is through European Article Number (EAN) matching. As a result, merchants do not need to translate product data into different languages – they input one set of data with an EAN and the marketplace does the rest.
Looking ahead, the main factors to influence online retail trends in Europe will be convenience and logistics. A retailer's capacity to compete on a pan-European level will be based partly on the number of channels that they are able to offer their product through, as well as the number of delivery methods available.
Another crucial factor is mobile and the numbers speak for themselves – a recent study conducted by RetailMeNot shows that m-commerce sales in Europe are forecast to reach £19.8 billion, with purchases made on a mobile device accounting for 13 per cent of all online sales, in 2014. This shows that online retailers should look to sell through marketplaces that are optimised for mobile use, if possible with a mobile app.
The trend for 'Click and Collect' services is also growing across Europe. Most large retailers are able to offer 'Click and Collect' services from their shop space, however, many smaller retailers and online brands may not have a physical space to do so. This, in part, explains the increasing move towards partnerships between marketplaces and large retailers, such as eBay's 'Click and Collect' tie up with Argos.
In reality, most of the smaller retailers will need help to gain enough visibility of their products online. One of the best ways to achieve this is by leveraging the expertise and customer base of the various marketplaces available in each European country. Retailers should look to sell through marketplaces with additional services that are keeping pace with online trends in Europe. Through these marketplaces, UK retailers looking to grow their online presence can ensure that they are able to compete with rivals on the continent, while saving money on infrastructure costs.