SMEs are increasingly setting their sights on delivering products and services beyond the domestic market, but with these global ambitions come a whole host of challenges – from extending customer reach, to adding steps to the supply chain process.
Offering a national delivery service is one thing, but when it comes to fulfilling orders in international markets such as Asia, an extra element of careful planning is required to ensure it’s done successfully.
In order to develop an effective supply chain strategy, businesses could consider narrowing their target audience and regions, employing trusted experts on the ground, and even marketing their goods differently.
Ben Franzi, Australia Post General Manager Global eCommerce Platforms and Marketplaces, and Philip Boston, business development consultant for organic skincare brand Botani, share their top five essential considerations when supplying to an international market, particularly Asia.
1. Products and services should resonate with international consumers
“The Chinese see Australia as a very healthy place to live,” Franzi explains. “Cosmetics and beauty products, speciality foods and products made specifically for babies and children resonate well.”
An SME that is ready to succeed in an international market knows that appealing to local consumers is key. Therefore business owners need to think about which regions they approach – there will be different ethnic backgrounds and product biases.
“You can’t look at China as one big Australia. There are cities in China bigger than the whole population of Australia, so you have to think about your target market rather than taking a big, broad approach.”
2. Reaching the international market requires a clearly defined strategy
With a population of more than 1.3 billion, China represents one of the biggest and fastest growing markets in the world for Australian businesses. So when looking to crack the Chinese market, it’s important to develop a strategy for incrementally investing in this foreign market and to choose inexpensive options to build a customer base.
“You might dip your toe in the water using Tmall.com (Australia Post’s international marketplace, via Alibaba) to help you get some volume. Then, as you mature and get more volume, you’ll want to start building your own presence and thinking about whether you want to use a commercial supply chain,” says Franzi.
3. Gain traction in target regions through marketplaces
“Two-thirds of the world’s population sits in Asia but they’ve not got huge penetration rates online at the moment,” says Franzi. “Australia has 24 million people and about 94 per cent of us are online but in China, this sits at 44 per cent and in Indonesia, 20 per cent. There’s a huge growth wave coming, simply as more people throughout the Asia-Pacific region get online.”
China is dominated by eCommerce site Alibaba, so utilising Tmall.com (on their platform) enables Australian SMEs to sell to Chinese consumers with ease.
“Australia Post’s Tmall platform makes it as simple and cost effective as possible for SMEs to sell their products into China as well as providing a range of additional useful business functions via the platform such as currency conversion, language translation and shipping arrangements.”
4. A social media strategy drives consumers online
“We’re across Facebook, Instagram and Pinterest,” says Phillip Boston. “If you’re not in social media, you’re losing sales.
“You also need a WeChat or Weibo strategy if you’re targeting Chinese consumers,” explains Franzi. “You should think about how you’re going to use those platforms as part of your marketing strategy, because there’s a lot more friend-to-friend and peer-to-peer recommendations in China, and these social media sites can really drive your sales.”
5. Focus on logistics and planning at every stage
Not all markets operate the same way, so while a SME might have a handle on the domestic scene, delivering internationally can require different strategies and processes. For example, timelines can vary considerably.
“You have to register every product, and the ingredients have to meet the criteria of what can be imported into the country. The registration process is quite involved and, in China, has taken over 12 months,” says Boston. “But the same process in Korea took just a matter of weeks. They’re all so different.”
“Selling via a marketplace such as Tmall can significantly reduce the time it would normally take an Australian SME to penetrate the Chinese market, without having to go through a complicated product registration process,” says Franzi.
Treading carefully can also benefit an SME looking to expand – running small trials in a target market as opposed to taking on a large-scale investment from the outset can reduce the risk of failure.
Supply chains are complex and it’s vital to find the right approach to fulfil your customers’ needs. This requires significant research, such as attending events and conferences to speak with experts in the international space without committing to a cost.
And, as good customer service experiences drive sales, anyone handling questions and complaints must speak the language of the country the SME is servicing and be knowledgeable about the products.
Australia Post and StarTrack are experts in supply chain management and end-to-end eCommerce solutions. For more information on how to build effective behind the scenes operations for your eCommerce service, visit startrack.com.au/advantage.
Small and medium enterprises seeking to get ahead in online retail know the answer lies in logistics – cutting through the clutter and simplifying processes around delivery and returns. Here’s what you can learn from web-based fashion store SHOWPO.
Online fashion retailer SHOWPO is one of countless SMEs sending parcels across Australia every day. And for brand founder Jane Lu, managing the logistics element of the business has been a challenge. However, she has been able to perfect the science by streamlining her supply chain and minimising the messy to and fro of products.
“Simply improving the descriptions of each garment on our website and adding accurate measurements has worked really well for us and actually reduced the volume of returns,” she says.
The entrepreneur left behind a corporate career as a business analyst to launch SHOWPO in October 2010, starting from a small Sydney garage. Lu opened her first bricks-and-mortar store just two months later, and another shortly after in Sydney’s CBD.
Lu stayed at the forefront of fashion trends and utilised social media to build her brand as a leader of young women’s fashion, despite operating in an extremely competitive industry. In fact, it was her savvy approach to eCommerce that saw the retailer gain a strong following online among young women, and proved so successful that Lu closed down the two physical stores.
“Closing our stores allowed us to focus our efforts on the most profitable and saleable part of our business: online sales.”
Making returns simple
Integral to their online success was the time spent working on efficient supply chain systems, and making returns easy for customers.
Australia Post General Manager Global eCommerce Platforms and Marketplaces Ben Franzi says smoothing out the process of receiving goods that come back is vital, adding that successful online sellers and retailers are the ones who embrace returns rather than making this process difficult for customers.
“People remember great customer service – especially when it is in response to dealing with an issue or resolving something like an item that needs changing. Online retailers should see every return as a great opportunity to connect with customers and provide a positive customer service experience.”
Just as a live chat function can make a customer feel valued, SMEs should consider building the delivery cost into the product price, or cost out free shipping as part of their marketing strategy, Franzi says.
“A growing number of SMEs are introducing free shipping and free returns for online sales, and this has been a foundation for solid growth for many. However, careful planning is required and a good understanding of your product margins is essential to maximise [financial] returns.”
Online retailers with a clear returns policy and seamless processes in place to make it easy for customers to return their goods can use this platform as the ideal differentiation strategy.”
Picking a shipping and warehousing platform
Never underestimate the importance of an effective shipping solution to your eCommerce site’s success. As Franzi goes on to add, small to medium businesses often find pick and pack companies that provide end-to-end fulfilment services can solve some of the most complex and messy parts of the supply chain.
“SMEs with an online component need an effective shipping and warehousing platform so that the system supports you to give great customer service, especially if you’re operating two or three stores and you’ve got to track inventory. It can get out of hand very quickly if you don’t have a solid solution in place from the start.
“Picking goods out of a brick-and-mortar store can be very costly, because stock levels are constantly depleted. And of course, you’re always trying to pick and pack around customers.
“On the other hand, if you pick and pack from a warehouse, you also need to balance your supply chain and establish efficient warehouse management systems that suit your sales flow.”
3 top tips for cutting messy logistics
Make sure you capture a valid delivery address from your customer at the point of sale.
Offer delivery choices and convenient collection options to avoid failed delivery attempts.
Alert your customer once you’ve posted the product and communicate expected delivery times.
Australia Post and StarTrack are experts in supply chain management and end-to-end eCommerce solutions. For more information on how to build effective behind the scenes operations for your eCommerce service, visit startrack.com.au/advantage.
ZFootwear label Betts has brick-and-mortar stores across Australia, but the company’s recent entrance into eCommerce required a whole new set of skills – from drawing up a digital marketing strategy to implementing payment and order fulfilment systems.
Betts has been in business for approximately 120 years selling shoes to customers from a number of physical storefronts but, like many brands, the company recently added an eCommerce site to their offering.
“We started trading online around five years ago,” explains Betts Group digital retail manager Samantha Campbell. When she joined the company two years ago, they were launching four new websites to align with each of their brand positions.
“Our fashion brands are Betts For Her and ZU. Betts For Her is aimed at the younger, faster fashion range and ZU is a little more contemporary and mature. We also have our Airflex range, which is about using technology within the shoe to make it more comfortable and durable, and our Betts Kids range.”
Before launching their four online stores, Betts had roughly 200 physical stores across Australia, so they had strong market awareness. Campbell explains that the company was motivated to get online in order to bring it into the 21st century: “Recognising that customers want to shop with us through a variety of channels, not just physical store locations.”
Developing an online strategy
Betts’ online strategy revolves around getting closer to its customers, which can include everything from enabling them to browse shoes online before shopping in-store, to offering search filters to assist them in finding a precise style, colour and size. And, as Campbell has discovered, good website design is key when it comes to attracting online shoppers.
“We may have four different stories on trends that we want to focus on for the season. We support that by offering the range online, emailing our customers about it, and also communicating that we’ve got different offers available. We also create content and information on the website, which gives them another reason to check in with us.”
“It might be content such as, ‘How do I wear that particular type of shoe?’ or ‘What trend is that shoe going with?’ It’s about that extra value that you can provide to customers.”
Locking down logistics and operations
With all deliveries shipped from Perth, the Betts web team is made up of five to 15 casual staffers fulfilling orders. Currently, customers have the choice of a standard parcel, arriving within five to seven days, or an express option, both of which are through Australia Post.
“Some of the bigger eCommerce players out of the UK and USA have had a lot of success with that,” says Campbell, who points out the company already accepts physical returns on online orders.
Being on the west coast has posed some challenges though: “Getting faster delivery to the east coast is one of the biggest challenges we need to look at. Whether that’s through faster options for delivery like StarTrack Courier from Australia Post, or using our store network more efficiently.”
Australia Post and StarTrack are experts in supply chain management and end-to-end eCommerce solutions. For more information on how to build effective behind the scenes operations for your eCommerce service, visit startrack.com.au/advantage.
Within today’s competitive eCommerce landscape it’s essential businesses offer a reliable delivery service and secure online transactions if they want their online store to survive and thrive.
Customers have increasingly high expectations when it comes to their online shopping experience and, if an SME doesn’t deliver the goods within this competitive eCommerce landscape, people will simply shop elsewhere.
Jane Cay, founder of women’s fashion online retailer Birdsnest.com.au, implemented best practice customer service systems to ensure her business thrives. These include personalised and speedy delivery options, easy returns and ongoing customer service.
After working with Australia Post to improve its supply chain, Birdsnest.com.au has gone from having a minor retail presence in the small town of Cooma (NSW) to posting more than 1000 packages on an average day.
“It’s very important to get a delivery done quickly,” says Cay. “When someone orders something today, they actually want it yesterday… Our business is all about trust. If we receive an order at 1pm it goes out that day every time.”
What do online shoppers really want?
Establishing a customer’s trust is a crucial step that can only be achieved through reliable and speedy delivery, excellent customer support and evidence of secure payment systems.
“Customers simply want to receive their goods quickly with minimal fuss,” says Australia Post General Manager of Parcel Operations Efficiency Rebecca Burrows. “They want to be able to choose when, where and how they receive their order, whether that is at home or at work.”
To encourage repeat customers, it’s necessary to ensure an easy returns process at low cost and minimal effort. In addition, she says, tracking systems should be used to allow both the retailer and customer to view where an item is located during the delivery process.
“Good visibility of returned items is important for retailers and customers alike,” says Burrows. “Knowing where they are in the returns process at all times and then a quick and easy resolution in the form of an exchange or refund goes a long way towards keeping everyone happy.”
And as shoppers can’t see the person they are actually dealing with, clear recognisable symbols that provide visual reassurance of secure payments, such as SecurePay and PostPay, need to be established.
Go the extra mile: make your site mobile and offer real-time support
The days of being purely a desktop shopper are long gone. Today, customers also expect to be able to shop on a responsive, mobile-friendly site across all of their devices at any time, says Burrows. This behavioural preference for instant gratification also extends to customer support.
“Live chat, the ability to phone and the ability to instantly resolve issues is ideal. If the customer needs to leave the site or wait to have an issue resolved, the sale is lost,” says Burrows.
Giving customers the ability to track their parcels in real-time will also help minimise the influx of tracking-related customer service calls, freeing up time to offer greater service elsewhere, says Burrows. It’s just one of the simple ways a business can bolster their online sales.
Above all, keep it personal
For Cay, the automated elements are vital, but she still ensures a touch of personalisation in her approach to service. And while using live chat can improve the level of online customer service, she likes to really connect with her customers.
Finishing each package with a handwritten note, whether it is a customer’s first or 100th order, is truly appreciated by shoppers, says Cay.
“Over 80% of our orders come from returning customers, so we find our retention is very good.”
Upon delivery, the website’s Net Promoter Score (NPS) management tool encourages customers to leave feedback and rate how likely they are to recommend the business.
“It’s a way of gauging the satisfaction of our customers. Six months ago responses showed people were finding it costly to return goods. We’ve now implemented flat-rate returns with Australia Post to simplify and reduce the cost for our customers.
“Since then, all the negative feedback we were getting about that has dropped off.”
Australia Post and StarTrack are experts in supply chain management and end-to-end eCommerce solutions. For more information on how to build effective behind the scenes operations for your eCommerce service, visit startrack.com.au/advantage.
A successful eCommerce company knows that every stage of the supply chain must run like a well-tuned machine if they are to be successful. From warehousing and inventory to delivery, these are the hurdles your business needs to overcome.
International footwear and sports apparel retailer ASICS knows a thing or two about supply chains thanks to its global wholesale network.
But in the last two years, it has been perfecting the art of eCommerce, and delivering its famed goods direct to consumers across Australia.
To achieve this, ASICS Senior Manager – Operations James Gardiner explains that the business needed to develop a new behind-the-scenes strategy that was all about putting the consumer first.
“We thought about how we can get deliveries there quickly, and looked at the top supply chain and packaging solutions to achieve this,” he says.
He explains that the business uses IT systems to segregate orders once they hit a central warehouse, and that an alert is made when an item ordered by a customer is ready to be packed.
Gardiner thinks a good supply chain is vital to any thriving SME, and is as important as the product itself, of course supported by marketing and financials.
Supply chain requirements in today’s market
Put simply, a supply chain is the movement of product from supplier to customer, explains Shaun Patterson, Head of Marketing, Commercial and Logistics for StarTrack. As Australia Post’s parcels business, StarTrack was integral in assisting ASICS to achieve its streamlined delivery system.
In an increasingly international market, the supply chain could mean moving goods within Australia, importing from overseas, or exporting overseas. The customer could be an individual shopping from home or a business ordering bulk goods. For SMEs in eCommerce, the vital elements are obtaining goods from suppliers, and delivering them to consumers when fulfilling orders online.
And, just as an attractive website design can attract online customers, it’s also important to think about logistical elements SMEs need to have in place to keep the customer satisfied after they make their purchase.
“Warehousing, delivering direct to the consumer, ‘click and collect’ and consolidated shipments for store replenishment are just some of the ways a supply chain can improve the online shopping experience for their customers,” says Patterson.
Finding the right supply chain logistics partner
Many SMEs will engage with a supply chain logistics partner to ensure this is done correctly.
To get a supply chain partner spot on, it is vital they understand a customer’s expectations, and think about the desired speed of delivery, he explains.
It’s also important to know the value of the goods being exchanged, the size of the products and the delivery locations – as these all have an impact on designing and delivering the right supply chain.
Patterson says if your customers are predominantly located in regional locations, then it’s important to make sure the logistics supplier has a strong regional footprint.
“Or, if you’re delivering to consumers [in city locations], then delivery choice becomes critical, as does a supplier that can provide options like parcel lockers and multiple parcel collection locations,” Patterson says.
He explains that adopting effective shipping solutions and offering extras such as delivery status update notifications and alternative delivery options are vital to meet the needs of today’s eCommerce customers.
In his experience, Patterson has found one of the biggest logistical challenges SMEs in eCommerce face is managing product returns. The solution to this is simply having a well-oiled supply chain at the core of their business.
“Satisfied customers require convenient, quick and flexible return solutions that make their exchange experience seamless. That takes a supply chain partner with strong experience.”
ASICS’s James Gardiner thinks partnering up on the supply chain is the best way for SMEs to excel.
“SMEs need to ensure the cost margin is good enough to stay afloat – but it can be a disadvantage to cut it down to the lowest price point for poor delivery services – as the cost of a lost sale due to a bad delivery performance is something that we take very seriously,” he advises.
Australia Post and StarTrack are experts in supply chain management and end-to-end eCommerce solutions. For more information on how to build effective behind the scenes operations for your eCommerce service, visit startrack.com.au/advantage.
Creating an attractive online store is all very well but in the face of seismic online retail industry shifts, focusing on the front end and failing to develop a strong strategy for your ‘behind the scenes’ operations can hinder your company in the long run.
The Australian online shopping sector is booming, with a recent IBISWorld report revealing revenue is expected to grow by 18.9% annually over the five years through 2010-15 to reach $14 billion. Therefore, it’s more important than ever for SMEs in the products and services sectors to ensure their eCommerce operations are second to none, but many SMEs are still grappling with how to succeed in the online space.
These figures reflect the new world of retail – a customer-centric, technology-driven, increasingly global and borderless experience for consumers, says National Online Retailers Association (NORA) executive chairman Paul Greenberg.
Today’s online shopping scene
In 2015, Greenberg predicts social media will continue to empower this new breed of ‘hyper-connected’ online shopper and their loud, influencing voice. As a result, we’ll see more proof that customers prefer to shop by engaging with a brand ethos, that cross-border trade is a good opportunity for expansion, and that the most successful retailers will use multiple touch points for meaningful customer interaction.
Online retail in China will continue to explode, says Greenberg, presenting opportunities for Australian SMEs, while we will also witness an increasing number of international retailers opening shops in Australia. Changes are even threatening to cut out the ‘middle-man’ retailer, with manufacturers increasingly going direct to consumer.
Getting unseen operations right
With these profound shifts, SMEs need to develop a clear strategy and offer niche services and products in order to be relevant. And while many companies spend considerable time and energy on building an attractive eCommerce site, it is the unseen operations that will make or break a business.
Good retailers are the ones focusing on supply chains and fulfilment as a priority, rather than spending a large portion of their energy on the front end aspects of their website, says Greenberg.
Online retailing should be handled with responsive warehouse management systems and customer relationship management (CRM) systems for access to data and insights, he argues. It should also include multiple and secure payment options, and platforms that are easy to search, navigate and pay.
Technology, logistics and customer service combined
Winning Group chief executive John Winning agrees, saying that while website design and functionality is important, there’s much more to online retail than simply setting up a site.
“Your website not only needs to offer a user-friendly experience. It needs to have the capability to efficiently tie into other parts of the business. You need to consider how to integrate technology, logistics and customer service together.”
For Winning’s core site – Appliances Online – it was vital to control the final stage of the customer journey in order to be successful, he explains.
“Many of our customers were in urgent need of a replacement fridge or washing machine, so getting them the new product as soon as possible was a number-one priority.”
Winning invested in his warehousing, transport logistics and inventory management to ensure it was spot on.
“Analyse the customer experience. Measure response times, customer sentiment and social media channels, and look for ways suggested by customers to improve your business,” he says.
He also advises SMEs to engage in purpose-built technologies that allow customers to know when and how the company will deliver their product.
While eCommerce might be a fairly new pursuit, the key systems and areas of focus are not unlike traditional business models, says Greenberg, which is why a behind-the-scenes strategy is key.
The good news is that there are always innovative solutions being launched in response to this new ecosystem and expert advice is available.
Australia Post and StarTrack are experts in supply chain management and end-to-end eCommerce solutions. For more information on how to build effective behind the scenes operations for your eCommerce service, visit startrack.com.au/advantage.
Australia's company tax rate is unlikely to change in the upcoming federal budget, says Treasurer Jim Chalmers, suggesting a combination of targeted tax breaks and incentives will anchor the economic blueprint.
