Comment: There is desire and opportunity for British retailers abroad

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The latest Bank of England view on growth is challenging for retail as inflation continues to run ahead of consumers’ earning growth and spending power.

The latest Bank of England view on growth is challenging for retail as inflation continues to run ahead of consumers’ earning growth and spending power. This means it is essential for retailers to keep adjusting the sales channels to give customers the choice and budget for substitution as sales move between physical and online.

We can use the competitive tension to create new products and services, and find ways to delight the customer and win their loyalty.

At Hobbs, we have invested in our autumn/winter 13 collection and taken a big step forward with a range of new products as the engine of our growth. Understandably, many retailers - ourselves included - are seeking international opportunities in order to realise the full potential of a British brand. In addition to taking advantage of what’s available in our domestic market, businesses must seize their chance to invest in foreign territories, and to get it right.

Unfortunately, a number of the country’s bigger brands have struggled to successfully expand internationally and have lost money as a result.

So how can retail businesses make it work? The answer is in the detail and understanding the parallels and differences from country to country and culture to culture.

There is no bigger contrast than when you analyse the two largest economies in the world: China and the US.

Both countries have a love and admiration for British brands. One is difficult to enter but has an impressive appetite and significant long-term growth. The other is easier to enter but mature and highly competitive.

We believe that there are successful long-term strategies for both. While product offers may differ in style, size and consumer habits, you can still remain true to your brand DNA.

At Hobbs, we are working through the process of focus groups, desktop research, analysing existing international sales and rapidly developing our online presence and data sources. We are eager to talk to those that have been there before and to make contacts with the countries’ relevant decision makers.

Essentially, there is no substitute for spending time on the ground in a new market in order to develop relationships and understand the customer, culture and nuances.

British retailers need to invest in a new market without the expectation of an immediate return. International returns take time and, even with the rapid development of online, rewards might take five-plus years to emanate.

Hobbs consciously chose to increase expenditure by more than £3m last year in market research, product development and expanding the team in preparation for the international phase. Despite the initial costs, this is
a long-term investment and something we are committed to do over each of the next few years.

There is great desire and opportunity for authentic British brands overseas. Making trips, building relationships, senior management commitment and thinking long term is key to success.

I was fortunate to join a UK Trade & Investment delegation to meet the top 45 entrepreneurs in China at a summit in a fast-developing, second-tier Chinese city. The introductions and discussions were invaluable. If, like Hobbs, China is a target, another organisation committed to providing assistance is the China-Britain Business Council.

Both are Government sponsored but their high-level access is excellent. Our bags are packed and we’re ready to travel.