In a post-Brexit world, global ecommerce needs global tech
Discussions over what type of Brexit Britain is going to have – soft or hard, slow or quick – should not distract anyone from the fact that it will happen; despite the recent suggestion that the referendum was merely advisory and that MPS can theoretically over rule it. In the words of Prime Minister, Theresa May, “Brexit means Brexit”.
For smart retailers, Brexit is seen as just another little earthquake in a world that generates a new and usually unforeseen challenge almost daily. It is these companies that have already recognised early the opportunities available from trading online outside home territory. For some, it has been the making of them; their brands at home are running out of growth, while the appetite for their products in the US and Asia has in some cases surpassed home volumes.
Clearly, this means there is room for more UK companies to become true global traders. One in 10 (10.8%) UK companies export, according to the most recent figures from the Office for National Statistics (ONS). Exclude financial companies and this increases to 15.3%.
However, many of these organisations proceeded to expand globally with a certain naivety, that home-grown messaging, positioning, systems, processes and logistics would work abroad. The major missing component is a scalable and flexible trading platform able to understand the nuances of local markets and respond accordingly, to differences in customer expectations, fulfilment and delivery, and tax and regulation. And the infrastructure to support, with the cloud being the only credible platform for flexible, distributed, available and secure global commerce.
The harsh truth is that most retail ecommerce websites are not fit for global trading, in terms of their page load speeds, product availability and international customer service capabilities. Many global sites are simply the poor relations of a domestic master site.
Companies for whom non-UK trading is less than 5% of turnover, or whose customers will put up with an inadequate service because the goods they are buying are so hugely in demand, might find this an acceptable compromise. But consider that some retailers have seen their businesses grow explosively with each country extension, until over half their turnover is coming from outside the UK, and in some cases, more than half their profit. ‘Making do’ with a substandard ecommerce experience does not seem as appealing any more.
As retailers expand internationally, reputational consistency is key to maintaining brand image. Inconsistency of page speeds, availability and service will not reinforce their growing global reach – especially in a climate of spiky demand. Get the online customer experience wrong and organisations are faced with a huge potential loss of immediate and forward income, as well as smaller than possible basket sizes.
However, fixing the problem is not as easy it sounds. The current dominant players in ecommerce platform provision have progressively managed the expectations of their clients down to something that they the vendors can manage, but are simply not fit for global online trading. When new sites are added across new territories, these are usually supported on existing infrastructure. This leads to availability of sub 98%; and bear in mind that 2% downtime, particularly during peak trading periods, can equate to a loss of as much as 5% of the annual revenue opportunity.
Forward thinking retailers are taking a different approach, and becoming leaders in ecommerce without owning a conventional heavyweight ecommerce platform. They are moving away from the enterprise IT mentality of predominately ‘buying’ products that are integrated at the top tier with minimal engineering. Digital-first retailers are choosing to own the core of their business; by utilising a microservices architecture that eliminates long-term commitment to a single technology stack, it allows you to plug in best-of-breed cloud services that already exist, and build the ones that you want to differentiate your brand on. Enabling rapid deployment and scalability in new regions and improved fault isolation, microservices mean that you are not limited by the tools offered by ecommerce package vendors.
This enables a retailer trading in 10 countries to adopt a cloud-based approach which will be supported by multiple data centres for both availability as well as redundancy, and can use the cloud to extend easily to a further 10 countries. Availability always achieves the magic four 9s (99.99%) for every site in every territory, and page loads speeds are around two seconds or less, regardless of the limitations of local networks.
This approach is already working for some of the world’s best-known ecommerce retailers, including ASOS. The fashion e-tailer depends on the Black Friday peak for a significant percentage of its annual turnover; there is a cost associated with even the smallest amount of downtime. And ASOS is not alone – as more and more retailers look to embrace their ambitions overseas, they will need a platform that not only projects their brand but manages high-volume transactions 24/7.
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