Does location matter?
By: Petah Marian - 11 November 2011 14:59
While it's a bit of a cliché to say the online retail allows retailers the ability to move abroad, what's becoming increasingly interesting is how rapidly online retailing is becoming a global business - and not just for the e-commerce specialists.
Having lunch with Asos chief executive Nick Robertson last week, it was interesting to note that Asos has better margins and is more profitable internationally than in the UK. The logical conclusion from this statement might be that Asos should look to set up distribution centres in some of its top export markets. Not so, suggests Robertson, saying that the size of the US means that the four-day delivery from the UK to the US is not a barrier for shopping and is the norm in a country the size of the US. Additionally, maintaining a distribution base in the UK means that it can work from a single stock pool and that it will be sheltered from shocks in any single country.
Although I am concerned that this approach may find itself under some criticism in coming years, once sustainability campaigners become aware that Asos is sending the equivalent of two jumbo jets of clothing a day abroad from its UK distribution centre.
But, this traffic is not only headed in the export direction. Clothing aggregator Shopstyle UK is driving UK shoppers towards US retailers, which have, until now, had a limited presence in the UK.
A spokesperson for Shopstyle UK told just-style that Nordstrom and Macy's are among its top five retailers for UK-based consumers and make up around 9% of clicks from the site - less than a percentage point shy of its most popular retailer.
She said that the site is opening up a lot of US brands to UK consumers, and it means they don't have to go abroad to have that "US shopping experience". They can also buy popular brands like Madewell, which isn't currently available in the UK.
Shopping internationally brings its own set of challenges - with sizing and returns being the two that immediately spring to mind, combined with more nebulous marketing ideas about brand awareness and trust of local brands.
That said, it's not hard to imagine a future when a a retailer's base means little or nothing to online consumers...
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