With a sophisticated e-commerce infrastructure in place, coupled with a seemingly insatiable appetite for British goods, UK retailers are capitalising on the increasing demand for their products from overseas. A recently published piece of research by OC&C Strategy Consultants uncovers how UK retailers are well placed to outperform their overseas’ counterparts in the battle for online supremacy. The report estimates a staggering sevenfold increase in non-UK sales by 2020.
Smaller Brands Making Large Gains
This trend is being driven by smaller, niche brands that are typically outperforming their larger, traditional competitors. This is perfectly highlighted by brands like Wiggle, a retailer specialising in bikes and equipment,that saw sales from overseas outstrip what they delivered domestically in just three years. Internationalisation is a trend we are seeing across other advertisers on the network, and is expected to grow at a rapid pace over the next few years.
Domestic Publishers Generating Overseas Traffic
Performance marketing lends itself perfectly to this growth in internationalisation. Indeed, many publishers based in the UK are already taking advantage of large volumes of traffic that is originating from overseas. Whether or not this is deliberately targeted or just a coincidence, one thing that is clearly evident is the desire to purchase UK goods from abroad.
A number of publishers have successfully exported their propositions abroad providing a seamless transition for advertisers to enter into new markets. The largest of these publishers have launched local language sites in order to capitalise on the growth in demand for British goods.
Rise in Overseas Publishers
While overseas traffic may not be deliberately targeted by UK publishers, one thing is clearly evident across the network, the rise in international publishers flocking in numbers to UK networks in order to promote home grown advertisers. As a network that works with almost half of the UK’s top 100 retailers, it is only natural these publishers are attracted to sign up. We have seen an influx of publishers across the globe, all intent on promoting these advertisers. By monitoring where these publishers are signing up from we are able to gain a clear understanding of where this demand is emerging from.
Interestingly in the past few years we have seen a number of applications from Australia – a market that has been a primary focus for a lot of UK retailers. This is not a great surprise considering there is no language barrier, the brands are familiar and the exchange rate is favourable. We mentioned that Wiggle was an advertiser performing exceptionally well in overseas markets and Australia is one they have certainly cracked. Surprisingly it can be somewhat cheaper for an Australian citizen to import a bike from Wiggle than it can be to purchase online locally!
Role of Compliance
As well as seeing some obvious opportunities for overseas expansion, this trend is not without challenges. With over 3,500 applications to the network from outside of the UK so far this year, it is important to understand the nature of the publishers and their intention for driving traffic to these advertisers. For example, there are strict rules in place within the UK in regards of voucher code sites and downloadable tool bars.
This is far more stringent than the procedures in place in the US. It is important for this activity to be closely monitored to ensure it is not in breach of terms and conditions.Similarly, countries throughout Europe have a strong reliance on post-impression activity across their affiliate campaigns – this is not the case within the UK.
Our compliance function plays a vital role with this surge in overseas activity. Compliance is involved from the initial approval of the publishers with around a third of applications being rejected outright. A higher proportion of rejections are overseas publishers.
There are numerous reasons why publishers will be rejected but a common one for overseas publishers is that their promotional methods would not be encouraged in the UK. The compliance team is then heavily involved in ongoing monitoring of publisher activity – keeping an eye on anything that could be considered as inappropriate or unethical.
Internationalisation represents a significant opportunity for advertisers to expand into additional markets. There has been a clear clamour from overseas affiliates to promote UK brands internationally. While this is not without its challenges, advertisers prepared to adapt and take advantage of this trend are clearly set to reap the rewards as this grows further in the coming years.