Business development 24 January 2017

How small retailers can target international shoppers

Chinese new year
Chinese New Year will see thousands of international shoppers flock to the UK

In a new article for Business Advice, Worldpay’s UK marketing head, James Frost, outlines why 2017 marks a fantastic opportunity for small business owners to cash in on the growing number of international tourists coming to Britain.

As celebrations for the Chinese New Year kick off this January, the time is ripe for retailers, brands and hotels selling luxury goods and services to build businesses for the ‘global shopper’.

Consumers from outside the EU are arriving in ever greater numbers, thanks to the slump in value of the pound against the Yuan and more relaxed visa requirements.

But many smaller retailers, especially those outside London, are still either unaware of the benefits, or unable to capitalise on this potentially lucrative new trend.

Brexit uncertainty has created a climate for change. The weakened pound prompted an influx of bargain hunting ‘Brexit tourists’ to the UK over the Christmas period, with foreign visitors spending over £725m on British high streets last December.

This is especially true of brand-conscious Chinese tourists, for whom luxury goods over here are already at least 30 per cent cheaper because of high tax rates back at home. The number of payments Worldpay processed from Chinese shoppers increased by 24 per cent year-on-year from 2015 to 2016, and could increase again in 2017.

The World Tourism Organisation, meanwhile, says that China is leading the way for international outbound tourism, with the largest population of overseas tourists and most money spent.

A total of 120m Chinese people travelled overseas in 2015, spending on average more than £2,000 each trip. And many more are set to do so in the UK, since the Home Office launched new two-year visa rules for Chinese nationals.

Huge spikes in demand during the upcoming Chinese Golden Week provides a great opportunity for brands that are geared up to provide the international consumer first class experiences.

Many retailers outside of the capital don’t realise that other UK cities are also benefitting from the influx of tourists, including the historic centres of Edinburgh, York and Bath, as visitors seek to combine tax-free shopping with cultural experiences.

Retailers must remember that an international shopper is no ordinary customer. Thanks to tax-free shopping and the relatively high levies on luxury goods at home, many will be prepared to spend full price on favourite items.

It’s a much different outlook for home-grown consumers, who are increasingly educated only to buy when an item is on promotion.  The flip side, of course, is that international visitors can have culturally different expectations when shopping and, given the amount some spend, are increasingly demanding high levels of service.

Going global

The problem for many UK retailers is that they don’t seem to understand exactly what a lucrative opportunity a foreign shopper represents, or if they do, are still unsure how to best serve these new global customers.

Simple things like letting them pay using the card they want to, can go a long way. China UnionPay has a monopoly in its home country, and last year its debit card was the most popular payment method in the world. Offering a range of international payment methods is an easy way to improve the overall experience for foreign visitors, and make them feel more at home.

Dynamic currency conversion can also help. Readily available from most major payment service providers, this facility shows retail transactions in real time, in a shopper’s local currency, and can make a huge difference to the whole retail experience.

It all comes down to best practice – whatever their nationality, treat them personally and on terms they understand, especially when it comes to paying.

Train your employees so they know the expectations of shoppers coming from different cultures, and if possible take a leaf out of Selfridges’ book by employing those who can speak their native tongue. It might even be worth investing in a digital marketing campaign, via social media, in their home countries to establish that initial relationship.

Consider amending in-store signs with additional languages and international size labelling for certain items. Clearly display the tax-free benefits of shopping in-store, and consider putting the tax-free price on goods. Specialist personal shopping services and extras for big spenders, like free taxis or refreshments, may also help to draw in those lucrative international customers.

Don’t be disheartened that Chinese New Year is already upon us. International shoppers can often arrive in numbers at times not traditionally considered peak periods.

Chinese tourists flock abroad during the summer and the autumn “Golden Week” holiday in October.  Pre- and post-Ramadan can also be a big time for heavy spending by Middle Eastern shoppers.

The message is clear for UK retailers – if you haven’t begun already, it’s time to start thinking globally if you want to mine a rich seam of international custom.

James Frost is chief marketing officer at  Worldpay UK

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