March 16, 2012

U.S. Stores Learn How to Ship to Foreign Shoppers

By STEPHANIE CLIFFORD

Published: March 20, 2012

Macy’s has long marketed itself as a shopping destination for visitors to the United States. It offers a savings card with a 10 percent discount for foreign shoppers, custom programs for tour groups and travel agents, and a tourism Web site that lists shopping events and recommended hotels near Macy’s flagship stores.

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Justin Sullivan/Getty Images

A FedEx facility in Oakland, Calif. American retailers use shipping companies like FedEx to send merchandise around the world.

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Macy's

Macy’s, Williams-Sonoma, Aéropostale and Lane Bryant have added international shipping to their Web sites.

But only last year did Macys.com — which shoppers worldwide can look at — offer overseas shipping.

“We were getting international traffic,” said Kent Anderson, president of Macys.com. “It was coming whether we were offering them, frankly, any realistic way to interact with the site or not.”

Macy’s is one of several retailers trying to extend its international presence to its Web operations by shipping overseas. In the last year, Williams-Sonoma, J. Crew, Aéropostale, Crate and Barrel and Lane Bryant have added international shipping to their Web sites, while Ann Taylor and Neiman Marcus are working on it.

Some of the retailers are meeting existing or anticipated overseas demand, while others are testing the waters before opening stores in other countries. Either way, they are discovering that shipping beyond the United States is not a simple undertaking.

“Typically the guys we’re talking to start off thinking they can toss it in a box and give it to U.P.S. or FedEx and hope it gets there,” said Michael DeSimone, chief executive of FiftyOne, a technology company that helps retailers add international shipping capabilities.

But there are problems with ordering systems, customs and postal fees, he said.

For example, many retailers do not have software in their warehouse management systems that recognizes foreign postal codes, which — unlike those in the United States — do not always have five digits.

“It sounds like a really stupid reason not to sell internationally,” Mr. DeSimone said, “but I can’t tell you how many times I’ve heard this was the biggest roadblock.”

The appeal to reaching customers in other countries is based largely on the popularity of mobile phone sales overseas. Forrester Research expects online retail sales in the Western Europe, Asia Pacific and Latin America regions to increase 67 percent from 2011 to 2015, compared with 42 percent for the United States.

And traffic to American Web sites from international visitors is already high. In December, 14 percent of visitors to jcrew.com were from outside the United States, as were 36 percent of visitors to abercrombie.com, according to the research firm comScore.

“The retailers have been looking for new avenues of growth beyond the U.S.,” said John D. Morris, a retail analyst with BMO Capital Markets. A handful of retailers have sold internationally for some time. Abercrombie & Fitch, for instance, has shipped to overseas consumers for about a decade, while Nordstrom began doing so in 2009.

International visitors are coming to American sites because of lower prices and the availability of products they cannot get in their own countries, according to Forrester. Macy’s has found that Australian shoppers are particularly interested in its trendy clothes, while Canadians want basics like coats, shoes and underwear.

Some smaller retailers are handing over global shipping to third-party vendors like International Checkout. On those sites, shoppers click to transfer their shopping carts from merchants like Jockey and Bebe to International Checkout, which handles shipping, labeling and customs.

The customs piece of it can be substantial. Each item shipped overseas has to be labeled with information like country of origin and materials used. And certain products cannot go to certain nations — Spain, for instance, forbids imported playing cards, according to FiftyOne, while to send an alligator purse to someone outside the United States, retailers need a Fish and Wildlife Service permit.

Delivery, meanwhile, could cost as much as the product itself. Macy’s said that it could cost $200 to send $100 worth of merchandise to Australia after adding shipping costs and the value-added tax.

The Macy’s Web site will soon detect the location of international visitors, and show them a welcome screen in the local language that explains how international shopping and shipping works. After the welcome screen, the shoppers browse the English-language site used by shoppers in the United States, but at checkout they get a final price, plus shipping costs, in their local currency.

Macy’s said it was still learning how best to reach its overseas customers. The retailer’s standard one-day sales, a popular promotion in the United States, “seem to be understood across the English-speaking world, at least,” according to Mr. Anderson. But, he said, Macy’s was looking into how to capitalize on country-specific promotions.

“We need to pay more attention to Boxing Day,” he said. 

My Comments:  When I read this I was so surprised that Macy's didn't already have international shipping. It seemed like with this economy, retail stores, especially one as big as Macy's would want to take advantage of every opportunity possible. I understand that there would be some difficulties with it, as the article mentioned, with the postal codes that the computer software may not be able to recognize but with some remodeling it could be very successful. Also, it seems like a great idea because they can take advantage of all international holidays that we may not have in America!