“The right balance between online presence, offline awareness and brand building will be key”

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Michel Koch, Head of International Multi-channel Trading at Marks & Spencer, is the president of the expert jury judging the candidates for the Cross-Border Award at the Global E-Commerce Summit in Barcelona. We talked to him about his vision on cross- border trade, multi-channel retail and other retail challenges.

You are the president of the jury for the best cross- border webshop of Europe. What are the key ingredients a webshop needs to have in order to win?
As jury president and also as head of international trading for M&S.com I fully measure how going cross-border is a challenging journey. When all operational hurdles are passed (legal, logistics, translation, marketing, branding,…), what makes the difference is clearly customer experience. For a webshop, being truly cross-border is about being true to the local customer, serving their needs the way they expect to shop, so that they feel the same trust as with a local retailer.

Last year, the winner was Zalando. What makes Zalando stand out from the crowd?
Zalando have had a clear strategy since the beginning to be “state of the art” cross border. It is part of their DNA to cross frontiers. They have followed a similar pattern in other European countries, thinking global from Berlin, but acting local with a dedicated local team throughout Europe. The company, from the beginning, has be focused on customer service, offering free shipping within 3 days and 100 days free returns. Wherever they trade in Europe, ZALANDO strives to have the public feel they are shopping with a local store, which is a best practice in cross border eCommerce. Since their opening, Zalando have been spending millions advertising for their brand though massive media campaigns (including TV, online display and many more). The brand has more than 85% awareness everywhere, but this probably went beyond their own brand. By doing so, they also advertised the benefits of online shopping, and enabled to build more trust in e- commerce with their differentiating service offerings. It seems they want to set new standards for e- commerce, in the same way Amazon did more than 15 years ago.

What do you consider the ‘hottest’ growth markets for cross- border expansion at the moment?
In spite of the financial crisis, eCommerce has kept a steady development, and remains one of the fastest growing industries. This is valid for Europe, with countries like France maintaining a strong growth due to more and more newcomers (both e- tailers and lots of “niche” players), coupled with a very high growth of mobile (especially tablets).
However, I believe that many eastern territories are still in their e- commerce youth and now see more and more online-stores to open: Poland and Russia could be quoted. For many UK retailers, what works best is overseas dispatch due to a strong expat presence and awareness in Australia, New Zealand, USA, Canada.

The customer increasingly expects seamless integration of sales channels. How can retailers merge cross- channel with cross- border?
It is a point that traditional retailers are coming back in the race, and designing new cross-channel concepts together with developing their online sales outside of their borders. Some have a “test and learn” approach, launching a pure play activity before to install a progressive store presence. Others, like Marks & Spencer, combine both strategies and innovate with “clicks and bricks” stores (the first one was launched in Central Amsterdam mid April). It is likely we will see more of this, where digital meets retail, in smaller surface stores conveying a new multichannel experience to customers, with large interactive screens together with strong human interactions. “Retailtainment” is part of it, a big differentiator too in terms of brand content and customer experience.

What are the main challenges companies have to face on their journey to be successful in doing this?
Being cross-channel as well as being cross-border will be much to do with logistics and total fluidity and agility in handling stock whilst maintaining costs down. Having the right balance between online presence (with large assortments) and offline awareness and brand building (with geographically strategic and right sized store presence) will be key. …

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