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UK retail embraces sales from China

By Retail Technology | Tuesday October 22 2013

China’s consumers are boosting UK retail sales leading payments expert Geoffrey Barraclough to urge retailers to capitalise on their increased spending power

The recent Government announcement to relax the Visa process for Chinese visitors to the UK came just days after a hugely profitable Golden Week for UK retailers earlier this month, with Chinese card transactions up 20% on last year’s figures. 

Golden Week is China’s biggest national holiday and traditionally the time of the year when thousands of Chinese tourists flock to the UK for a weeklong tax-free shopping spree. Here, Geoffrey Barraclough, head of corporate propositions at payment services provider WorldPay explains the importance of overseas shoppers and what retailers can do to capitalise on their spending power.

“In the wake of recent poor news for the High Street from Mary Portas and Bill Grimsey, the rising influx of international shoppers provides enormous potential for UK retailers, as global shoppers spend around four times more than locals at High Street retailers,” he said.

Luxury brands provide draw

“Top item on the shopping list for international shoppers are luxury goods from global brand names, which can be bought in the UK for up to a third less of the price they would pay at home. Products with a British pedigree, from Clarks to Church’s shoes also prove popular with international shoppers,” Barraclough explained. “Burberry reports that 30% of its London store sales are to overseas visitors.”

The peak spending period for international shoppers has traditionally been during the latter half of the year. Middle Eastern Shoppers tend to visit immediately pre and post Ramadan (9 July to 7 August 2013), large numbers of Chinese Shoppers visit during Golden Week (1 to 7 October 2013), while American shoppers peak in the autumn and Russians Pre-Christmas.

Welcome sales opportunity

“Britain continues to be a magnet for international shoppers looking to enjoy tax free shopping and offering a welcome income injection for UK retailers,” he continued. According to Global Blue, Chinese visitors to the UK spend on average £712 in shops, while WorldPay is seeing average transaction values of over £1,000 for purchases with Union Pay, China’s leading payment card.

“The fact that international payment transactions have increased significantly in 2013, shows how attractive UK retailers are to global shoppers and how important it is for struggling high streets to encourage international visitors,” he added. “If Bicester Village can be a hub for overseas visitors then why not other towns too? We should roll out the red carpet for the Chinese, but also think in the longer term about where else opportunities for international retail growth may lie, apart from just London and out of town retail parks.”

Barraclough also shared his ‘Top Tips’ on how UK retailers can attract international shoppers:

  • Reaching out to consumers in advance
International consumers generally plan their trips well in advance, most Chinese shoppers have already decided on the items that they are going to purchase before they depart for their trip, so marketers need to think carefully about building brand engagement in their tourists’ home country. 

  • Use local social and online resources
Consider local social media channels as well as a localised web site to engage overseas consumers

  • Training for sales staff in the expectations of different cultures
Different nationalities expect a different mix of customer service elements – so staff, especially those who work on commission, along with marketers, should be keen to embrace these.

Accessible information on tax-free benefits, including price tags displaying both prices
While international consumers will be able to convert currencies in their heads, they will be attracted to stores that make it easier for them.

  • Dynamic Currency Conversion (DCC)
International consumers, who may be spending many thousands of pounds, will want to know exactly what they are spending and not wait until they get home to read their credit card statements. DCC lets them pay in local as well as their own currencies.

  • International sizing labelling
Sizing is different all over the world, for instance a US 6 is a UK 8, so don’t leave anything to chance, and make sizing on all clothing items easy for consumers to work out. This may mean changing individual labels or displaying size charts.

WorldPay has also published a new report, entitled The rules of attraction: How retailers can win more revenue from overseas, that can be downloaded here

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