Out-Law News 2 min. read

Global retailers urged to adopt different strategies when courting international consumers

Global retailers have been warned against relying on a 'one size fits all' approach when expanding into different territories.

Trust was the number one reason given by consumers for shopping at a new store, according to a new report by Retail Week and Pinsent Masons, the law firm behind Out-law.com. However, the factors driving that trust were very different depending on where the individual consumer was based.

"With the general lack of stability in consumer markets around the world and the development of technology that enables global e-commerce to flourish, the benefits of internationalising your brand have never been greater," said retail expert Tom Leman of Pinsent Masons. "However, the retail sector has as many international expansion failures as it does successes."

"Shoppers around the world have widely differing views on what matters most to them so you need to know where to allocate your budget for maximum effect. With so many retailers eyeing international growth, understanding what garners a consumer's trust will make you stand out from the crowd. Set against the backdrop of fierce competition, getting this right has taken on new levels of urgency," he said.

Researchers surveyed 5,000 customers based in China, France, Germany, the UK and the Middle East to inform the report. They found that trustworthiness was the top reason given by customers in each of these jurisdictions when choosing to shop with a new retailer, outranking other factors including value for money and product choice. There were, however, some markets in which trustworthiness performed more strongly; particularly in China, due to its continuing issues with counterfeit goods.

Globally, consumers were most likely to be put off shopping at a particular retailer by high prices, with 70% of respondents ranking this as one of their top three deterrents. Consumers in the UK and US were particularly price sensitive, while those in the Middle East were less likely to cite cost as a deterrent to shopping with a particular retailer. Consumers in the Middle East were more likely to value quality and luxury over price, according to the report.

UK shoppers were the most active online shoppers, according to the research; followed by French, German and Chinese consumers. However, there was still some nervousness about cross-border shopping among respondents, with 31% saying that they would be put off buying an item if they knew it was coming from outside their own country, according to the report.

Just 1% of French survey respondents said that they trusted celebrity endorsements of products versus 33% in Abu Dhabi; while 45% of Middle Eastern shoppers said that they trusted reviews of products on social media, despite just 14% of UK and German respondents answering the same.

"Cultural, social and local nuances can have a very real impact on what shoppers expect," said Gemma Goldfingle, features editor of Retail Week, in her foreword to the report.

"For example, China's problem with counterfeit goods has left its shoppers dubious and craving authenticity while the importance of approval from friends and family in the Middle East makes social media a powerful tool for both reviews and selling," she said.

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