It is one of several retailers that are using expertise developed in
the UK's fast-growing e-commerce market to expand overseas. Store
chains like M&S are starting to emulate the success of online-only
fashion players like ASOS.
Britain is the world's most developed online retail market,
according to a ranking by commercial real estate firm Cushman &
Wakefield, followed by the United States, Germany and France.
M&S withdrew from mainland Europe in 2001 after a failed expansion.
The retreat was temporary. In March the firm said it would use
"bricks and clicks" - opening new stores in a few markets while
offering online sales in several more - to accelerate growth abroad.
"Because we sit in the UK we sometimes forget how advanced the UK
is," said Laura Wade-Gery, M&S e-commerce executive director.
Although the United States is the biggest e-commerce market by
absolute turnover, internet orders make up a bigger portion of total
retail sales in Britain - about 11 percent in 2013 to 7.3 percent in
the United States, Euromonitor data shows.
Britain's leadership position in e-commerce has been driven by its
compact size - which make delivery more cost-effective - along with
its relatively high internet penetration.
Retailers are seeking to ship more goods to shoppers abroad, a drive
the British government is supporting to diversify exports from a
heavy reliance on finance. It launched a plan last year to help
1,000 retailers break into international markets by 2015.
Consultants OC&C say UK retailers are beating domestic competition
overseas due to wider choice, better prices and fast and reliable
delivery. They predict overseas online sales by British retailers
will jump to 28 billion pounds ($47 billion)by 2020 from just 4
billion in 2012.
"You can go quite a long way with one warehouse serving the world,"
said OC&C partner Anita Balchandani. "We should feel pretty
confident about the prospects for a nation of shopkeepers with an
advantage in the digital world."
GLOBAL MARKET PLACE
M&S is investing 1 billion pounds on logistics, IT and systems. It
launched a new web platform in February and is ramping up a new
distribution center in central England to fulfill all online orders.
It hopes that will help reverse nearly a decade of market share
decline at home and pay dividends abroad as it targets a 25 percent
increase in international sales in the next three years and a jump
of 40 percent in overseas profits.
After its retreat in 2001, M&S started a tentative return to the
international stage in 2011 when it opened a store on the Champs
Elysee in Paris and launched a French-language website.
The move is part of Dutch Chief Executive Marc Bolland's strategy to
turn the British group into an international "multi-channel"
retailer, reaching customers through stores, the web and mobile
Credited with turning around grocer Morrisons, Bolland took over at
M&S from Stuart Rose in 2010.
M&S grew international sales by a third in three years to account
for 10 percent of the 10 billion pounds ($16.82 billion) 2013 total
and more than 15 percent of operating profit.
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Bolland's "bricks and clicks" mantra involves opening stores in
prime locations to publicize the brand, complemented by online sales
from local-language websites.
The attempt to meld stores and online presence is best illustrated
in Bolland's birthplace, the Netherlands, where M&S launched a Dutch
website and "e-boutique" store in Amsterdam last year that allows
shoppers to browse the full range of clothes on life-size digital
screens and then order online.
There was a 13 percent rise in overseas customers searching for UK
apparel retailers online in the first quarter of 2014, according to
a British Retail Consortium and Google study, with growth strongest
in China, Russia, France and Germany.
Nine local M&S websites are already live, with plans to launch in
Russia and Finland this year. M&S also hopes to add 250 stores
abroad by 2017 to the current 455, including new lingerie and beauty
boutiques in Saudi Arabia and India.
It already delivers to countries including Australia and Canada from
its UK warehouses, a similar strategy to that pursued by Next whose
strong online growth has helped it almost catch up with fashion
sales at M&S.
Next, which sells from 200 stores in 30 markets and delivers to 60
countries from a UK warehouse, saw international online sales grow
by 86 percent last year and expects a rise of another 50 percent
this year to 150 million pounds.
However, the further afield that retailers stray from Britain, the
more they have to plough into local logistics.
ASOS, a darling of the stock market since listing in 2001, saw its
shares fall sharply in March when it said investment in warehousing
in the UK and Germany, as well as start-up costs in China, would hit
Sophie Albizua, co-founder of retail consultancy eNova Partnership,
cautions that e-commerce does not mean that expanding abroad has
suddenly become risk-free.
She notes that ASOS, which already makes almost two-thirds of sales
overseas, is still far more profitable in Britain than abroad if the
costs of the head office are taken into account.
"You should be careful with the myth that international expansion
online is easier than store expansion," Albizua said, noting it is
costly to create brand awareness online in new markets, especially
without the physical presence of stores.
"In practice there are few people who have managed to do that
profitably and successfully because the same rules apply as to
physical stores." ($1 = 0.5938 British Pounds)
(Additional reporting by Anthony Deutsch in Amsterdam; editing by
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