What's The Best Model For Building An Agile International Business?

By Tim Koshinsky, VP Solutions, OLR Retail

Competition has pushed the boundaries of retail quite literally in new directions. Saturation in developed markets is driving retailers to find new, untapped resources for profit growth; recent Euromonitor statistics revealed that while mature markets represent 58% of global retail sales, the market only grew by 2% between 2013 and 2014.

Contrastingly, during the same period, the top 10 global retail markets were dominated by emerging or immature regions. China represented a third of the top 10’s share, while the other BRIC countries, Mexico, Turkey, Indonesia and Iran also featured.

Embracing these markets is an effective way not only to capitalize on new consumer opportunities, but to diversify risk. It can also present new trading opportunities across the brand as a whole; for instance, cross-border seasonal stock sales, to optimize inventory throughout the year.

However, expansion into unexplored territories is not simply a case of transposing existing operational models into new regions – at least not if retailers want profitable, long-term growth. A minefield of logistical and cultural differences mean that what works in one place will not necessarily translate. Go too far the other way with bespoke strategies, though, and retailers risk creating siloed operations for each market.

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