Al Gerrie – CEO, ZigZag Global
Al Gerrie is CEO at ZigZag Global, who provide software linking retailers with warehouses around the world where ecommerce customers can send returns. Instead of sending the goods back ZigZag will resell the stock locally via marketplaces to provide cash recovery – not returns.
What are the new eCommerce technologies or approaches that you think will have the biggest impact on consumer behaviour and sales in 2016?
“Retailers should be focused on integrating with international marketplaces and improving their returns processes. For cross border, localisation is key – attention to detail.
ZigZag was set up to help retailers address the growing problem of returns and local fulfilment. We have set up warehouses in UK, France, Germany, Spain, Italy, Australia & New Zealand, USA etc., so that customers can send goods back to our processing facilities and get refunded within a couple of days instead of weeks. We’ve built some intelligent software that routes products according to demand. It is early days for this kind of technology, but I think you’ll see it become commonplace within a few years.”
Which regions or markets do you foresee huge growth in eCommerce in the coming year?
“It is absolutely vital to have an international strategy. International will be bigger than the UK in the near future, and successful expansion is a combination of driving growth and realising opportunity. Once a retailer has a UK strategy in place then they naturally start to look towards the US, Australia, Europe and further afield. The retailers we work with haven’t necessarily finished in the UK and Europe just yet – there is a lot of market untapped there. It’s not just about the rest of the world and the BRIC countries right now.
It’s important to get your house in order – and to understand the complexities of trading in new markets. Make sure you have translations, customer service, payments, delivery, returns and a marketing strategy in place. You may well find that a direct approach is not actually best – e.g. marketplaces can be a more cost effective way to test the waters rather than going direct because there’s less risk and greater existing penetration. Consider utilising channels such as eBay and Amazon as your way into these markets.
Marketplaces have huge penetration in some territories. Ninety percent of Chinese ecommerce is made up of marketplaces and TMall is 47% of that figure alone. Why try to break into a notoriously difficult market by going direct, when there is an established marketplace the Chinese already trust and resonate with, with its own payment gateway too? Find out whether there is demand for your product via marketplaces and use that as your guide to decide which markets to then go into with a direct approach.”
Which sectors of the economy are most ripe for digital disruption in 2016? And how will this impact on eCommerce?
“Export – Cross border is still growing faster than other opportunities, so focus on getting international done right before you worry about disrupting the world! If your products can’t be found by customers on local marketplaces then you are missing a trick.
International customers are ready to buy from the UK, but they want to buy from retailers who have made the effort to translate products and policies and offer customer service support into local language too. They want to search in their own language, and they want fast delivery and local returns.
Amazon offers FBA (Fulfilled by Amazon) which can help with distribution into multiple countries. Ebay also has over 20 marketplaces to offer. Both have superb mobile solutions in local language and currency. They have active users who have come onto the site to buy.
Adding new marketplaces can increase your online revenue by over 50%. If you aren’t ready to trade on foreign language sites yet, look towards the US and Australia, but make sure you have got delivery and returns right first.
Eastern Europe has not reached full penetration yet even in terms of having broadband. E.g. Allegro – the biggest marketplace in Poland – said in 2015 only 75% of Polish consumers were be online. That statistic means a quarter of their population hasn’t even come online yet so there is very big natural growth opportunity there. Russia is developing fast, but is nowhere near saturation. British retailers are naturally trading in France and Germany but often tend to ignore the rest of Europe. Some of these countries you can afford to come back to and focus on later, but trading now means less competition, so do some research to understand the potential that is there. Look further afield, but keep one eye on the emerging countries within Europe too.
For the more mature retailers, the China and India are the biggest long term opportunities but it can take several months to get live in these countries, so if you want to be online for Singles Day 2016 you need to start now.”
What still represent the biggest barriers to eCommerce success for a brand or retailer?
“The biggest challenge most retailers face is a lack of local knowledge. Retailers also don’t tend to have a good understanding of marketplaces. They haven’t got the local language speakers and don’t have the experience of the culture. UK companies don’t necessarily understand the best payment mechanism in other countries – credit card payment doesn’t always work everywhere so it’s about finding knowledgeable staff or working with partners that understand the local market so that they can benefit from experience.
Fulfilment is a challenge too – there are countries that are still notoriously difficult to deliver to like Russia for example – delays, corruption, customs, lack of understanding about which carrier to use. Focus on getting products into these countries quickly and safely – it can cost you dearly if you get it wrong with the customer – it’s damaging to your feedback / brand to be delivering in 3-4 weeks to your customers. Find a fast courier that can get your products through customs and ideally using a tracked method. Being able to have a solution that is bespoke for every country is very important because one size doesn’t fit all. Returns still pose a major problem for cross border retailers.
Speed to market is also key. If you can’t deliver new projects quickly in-house, then do not be afraid to outsource elements to specialists who can lend their expertise to bring a dedicated approach to internationally.”
What roles do you see becoming more important for eCommerce businesses this year?
“Good Business Analysts are hard to come by. There is also a growing need for specialists in international marketplaces, and where brands have started to introduce International eCommerce Directors, I think you’ll see country managers become more important as these markets grow.
Outsourcing is important for brands who need to evolve – you can’t simply promote from within for markets you don’t understand, so your choice of partner is critical to your success. Returns are also a source of untapped revenue for many retailers, and with return rates increasing it is vital to pay attention to this area of the business or work with a partner that can manage them for you – it’s a full time job! ZigZag did a recent returns case study for a fashion retailer who had over £1m of inventory off sale at any one time because it was stuck in limbo (on the way back to the retailer but not available for sale yet). If you can reduce the time to get products back on sale you can unlock millions of lost revenue without making any investment in stock or launching in new markets. It is a very powerful metric.”