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Continuing Shop.org’s “Talking With…” series, we took some time to pick the brain of Zia Daniell Wigder, a senior analyst at Forrester Research who is a leading expert on Web globalization. Zia’s traveled to countries that most people couldn’t find on a map and offers insights on the best places for retailers to expand abroad, tips on where to invest now, and sage advice that every traveler needs to remember.
In the last month alone, Costco has announced plans to open in Australia while eBags has shuttered its UK operations (for now). When it comes to expanding globally, it seems like some retailers are jumping in with both feet and others are pulling back substantially to focus on core business operations. I imagine there isn’t a one-size-fits-all approach given this economy, but how can retailers know what choice is right for them?
The dichotomy you describe is certainly one that has emerged from the current economic crisis. Some retailers are viewing the global recession as a wake-up call to diversify revenues and expand beyond domestic borders; others are saying there’s no way they can justify a risky international investment in such uncertain times.
While there’s no foolproof way to determine which strategy makes sense, internal factors are as essential to determining when and where to go global as external ones. Retailers must ask themselves questions such as: How much international traffic is there currently on my site? Do I have existing international fulfillment capabilities that support other channels? How strong is my brand recognition in international markets? Does my company have international staff I can tap into to help operate the new business? Is my company flexible enough to change its offering based on learnings in new market(s)? The answers to these questions can help dictate how successful an international expansion is likely to be. Retailers also need to make sure they’re not overestimating the revenue potential in new international markets – in most cases, it’ll take several years to break even.
As a person who studies web globalization, what are your insights on how US online retail affects retail around the world?
While non-US brands are increasingly impacting global retail, there’s still a lot of leadership in the online retail space coming from the US. Features such as ratings, user reviews and, increasingly, recommendation engines are commonplace on US retail sites, yet they do not tend to be as widely deployed in other markets. US-based online retailers are eyeing these features as a way to differentiate their global offerings from those of local competitors.
However, companies in all regions of the world are challenging the US when it comes to online retail innovation. In France, electronics giant Fnac paired online video and chat functionality to create a unique customer service experience. In China, Tencent’s QQ coin gained enormous popularity and became the poster child for the power of virtual currencies. On the vendor side, Israel continues to produce innovation in areas such as online payments and security. Retailers should not look only to their domestic peers for innovation and opportunities, but rather take a more global view.
Here’s a hypothetical for you: A retailer has a limited amount of money to invest in a new global initiative this year. How should they spend it?
If the retailer hasn’t started shipping internationally, that can be a good way to start. We recently published a report on this topic since it’s been such a key area of interest for our clients this year. The cost of entry is low – a key factor during these economic times – and both site traffic and shipping data provide direction on international demand for products. The upside can be significant: retailers often see a revenue lift in the range of 10% after introducing international shipping. There’s no doubt that a localized, transactional site is the only way to fully mine the potential of any market, but international shipping can be a useful step for companies not yet ready to make a more significant investment.
Where are retailers’ missed opportunities abroad?
Latin America is one region that remains largely untapped by US-based online retailers. I understand the local market challenges and the fact that most companies want to look at the largest online markets around the globe, but when it comes to market saturation, you’re looking at much more intense online competition in Europe and Asia than in Latin America. Two markets – Mexico and Brazil – account for over half the online users in the region and rank as two of the US’s top 10 global trading partners, yet only a handful of US online players have any presence at all in these markets. The head of an ad network in Buenos Aires recently asked me why European online businesses were showing such an interest in Latin America while American ones weren’t.
Walk me through a typical day in your shoes.
Let’s take a typical day in the office rather than one on the road. I try to spend an hour at the beginning of the day reading through the news and industry updates. I’ll then work on a research report – either by interviewing key companies in the space, analyzing data or writing – and spend a few hours on consulting and advisory projects. Recent projects have involved assessing online markets around the globe, calculating potential revenues from shipping to Canada and evaluating different e-commerce platform vendors.
A typical day is also likely to include inquiries with clients as well as briefings with vendors or other companies in the global online retail space. Our goal is to learn as much as we can about the industry from as many sources as possible. New developments come from all over: last week, for example, I met with a machine translation company whose background is in the intelligence community, but whose technology is now being deployed for user reviews and online customer service.
At what point did you know you wanted to pursue this career?
I’ve always had an interest in international issues, especially in applying ideas and businesses models developed in the US to international markets. I’ve been at Forrester (and formerly Jupiter) for 11 years now, but my early career was spent at different diplomatic and educational institutions in Europe and Asia. I enjoy my work at Forrester immensely since in many ways it combines both the diplomatic and business worlds: you can’t simply replicate your current initiative in a new market and assume it’s going to resonate with a local audience.
Tell me about the most unexpected experience you have ever had traveling abroad.
That’s a tough one! I guess my most unexpected lodging experience was after a summer spent teaching economics in Uzbekistan. A friend and I planned a trip to Samarkand, but our guide decided to ignore the itinerary and instead booked us at a hotel outside the city that had recently served as a house of ill repute. Let’s just say the décor had not exactly been updated to reflect the new ownership.
How do you unwind?
I live in New York City but grew up in New Hampshire, so I still try to make time for outdoor activities on weekends. I love to ski in the winter and hike in the summer with my three kids. I also read a lot of non-fiction. I’ll pick up anything that introduces me to a topic I don’t know much about.
You founded a program entitled 12 Hours of Dialogue. Can you tell me a bit about it?
The program involves a series of video-conferences between young professional women in the US and their counterparts in North Africa and the Middle East. The goal is to introduce and connect women who would not otherwise have contact, and to help counteract some of the negative stereotypes that may exist. We discuss everything from our family lives and career aspirations to the best way to combat poverty and global warming. We’ve gotten very positive feedback from participants in both locations and are gearing up for our third year this fall.
I’ll use my last question to pick the brain of a frequent traveler. Finish this sentence, “When traveling abroad, never forget to bring…”
Essentials in your carry-on luggage! I once spent a week in Iran trying to adhere to the local dress code while my bags bounced between different European airports. And my former boss had to present to a client in Mumbai in a borrowed, oversized suit and sneakers when his flight was delayed and his luggage lost en route. It’s so rudimentary, but I’m amazed how many seasoned travelers still make the mistake.
Shop.org members, connect with Zia:
- Facebook: Zia Daniell Wigder
- LinkedIn: linkedin.com/in/ziadaniellwigder
- Blog: blogs.forrester.com/ebusiness_strategy/
