Retailers who are being encouraged to expand internationally should take into account the need to ensure consistent, timely and accurate service to meet the needs of an International customer base. Emma Gooderham, Managing Director of WorldAddresses.com, looks at the best way of taking a domestic business international.
The trend for global trade combined with growing Government encouragement for export activity is encouraging retailers of every size and type to consider international expansion.
Ensuring goods and services are delivered to the right place, and on time however, demands more than an ability to support multiple languages. Indeed, many retailers are taken aback by the challenges posed by multiple different postal address formats, preferred postal methods and even character sets.
So just how can retailers embrace international business and achieve effective delivery and marketing without incurring huge overheads in creating and managing a standardised customer database? Emma Gooderham, Managing Director of World Addresses, highlights the best way of taking a domestic retail business international and emphasises the need to be equipped with good advice so as to ensure consistent, accurate, timely service to the international customer base.
International Expansion
In today’s global economy retailers are being encouraged to extend their customer base beyond national boundaries. But while most are aware of the challenges of managing international banking and maximising currency exchange, just how many recognise a more fundamental problem: achieving timely, efficient delivery of goods on an international scale?
One option is to exploit the international standard for postal addresses, the Universal Postal Union (UPU) (the United Nation’s addressing department) Standard S42 format. Retailers looking to trade with countries that have adopted S42 can create a standardised customer database and confidently embark upon international business. However, a number of countries that are key international markets have yet to adopt this standard.
Countries such as the US, Spain and South Africa format their addresses in entirely unique fashions. This creates considerable data management problems and financial overheads for any retail organisation wanting to crack the global marketplace.
One of the biggest problems with the lack of compliance to the international standard is that addresses are not always formatted in a uniform manner in one country, let alone across the globe. For example, America has more than one type of address: for example, the PO Box form and the traditional format with a house number and street name. Any organisation looking to crack the US market has to consider which the ‘best’ route is, and then assess how best to manage conflicting address types within a single customer database.
Postal Models
Another problem is that few countries take the same approach to delivering mail as the Royal Mail. In the UK today, a house number or name and postcode will suffice to ensure mail reaches its desired recipient. Other countries, in contrast, rely on local knowledge. In South Africa for example, it is not uncommon to see a series of directions written on envelopes rather than, for example, a more typical house number and street name as used in the US and Europe. So how can these very different data sets be rationalised into a single customer database? Is this even possible?
Language considerations are also essential because certain countries have a number of different languages or regional dialects in common use within their own borders. For example, targeting Poland from the UK would generally require only an understanding of the Polish postal system and the Polish language. But if the retailer is looking to expand into Switzerland, then suddenly French, Italian and German languages and conventions need to be understood and accommodated in a single country’s database.
Likewise, Spain not only has a number of regional differences but also particular conventions. For example, alternative spellings of place names alongside each other to accommodate the various dialects such as Catalan are commonplace. How is this conflicting data structure supposed to be formatted to fit into a single database?
Considering Legislation
While these language, format and mail delivery model considerations are not absolute barriers to international trade, they are extremely expensive to remedy internally. Purchasing a country’s data set is not only hugely expensive but also a logistical challenge. For example, purchasing Australia’s raw data set will cost a business £24,000, assuming the sale is even approved due to national data protection legislation. Add to this the internal development required to input that data into a system, and suddenly budgets for international expansion are swallowed.
It is clear that achieving timely and accurate international postal data collection and management is therefore far more complex than simply supporting multiple languages. Rushing headlong into an international retail business model without considering these issues could cause huge problems – from the poor customer service associated with non or late delivery, to the additional costs of redelivering goods and the administrative overhead associated with managing these conflicting character sets and non-standardised address templates.
So what are the options? International addressing is an issue without doubt. And it is clear that retailers need a way of overcoming the global postal inconsistencies. They need a simple, easy to use international address look-up and advice on the key issues that need to be considered in each country. The challenge however, is far from insurmountable. The key is to ensure retail organisations are aware of the challenges before embarking upon expansion into new countries and experiencing unexpected costs or business damaging levels of poor customer service.
Conclusion
Given the divergence in international postal models, it is no surprise that many companies can become wary of attempting to maximise the global opportunity and retrench to the UK market. But this is missing out on a massive opportunity. In fact, technology now exists that provides retailers with a quick, easy way to provide searchable global address data in a single database. Simply using a postcode or zip code can provide the full address as used in each specific country, overcoming the problems associated with different formats, languages and models.
In many markets, the big opportunity is global. Furthermore, with international competition increasingly encroaching on the domestic market, many retailers need to exploit a strong product/service offering internationally.
The key is to understand the issues and get the right support in place. Just as retailers take legal advice on international contracts and financial advice on exchange rate management before embarking upon global trade, they also need to seek expertise in the vagaries of international postal systems if they are to confidently embark upon global expansion. It is those retailers that exploit the tools, expertise and postal standards available that will be best placed to achieve rapid global success.
By Emma Gooderham
Managing Director
www.WorldAddresses.com