International Strategy

Merchants have an increasing appetite for international expansion through their e-commerce channels. Late last year, Digital River commissioned Forrester Consulting to survey 130 executives and decision-makers at branded manufacturers in the U.S. and U.K. We wanted to know more about how companies are thinking about international expansion. The results of the survey were clear: More than ever before, companies are focused on geographic expansion in new online markets, and they have aggressive expectations for speed to market and profitability. Here are a list of tips for companies that are on the brink of their first international expansion project:

Retailers expanding into Canada would do well to focus on the customer experience. Offer superior merchandise that shoppers can't get at home and sweeten the pot with free shipping, especially during U.S. and Canadian holidays. With those investments, and an eye towards long-term growth, the road to the north will most certainly lead to checkout.

For most online merchants, it's not a question of whether to sell internationally, but how to go about it. The potential that international markets represent for online merchants large and small is simply too big to pass up. The dramatic increase in potential customer base, the far higher growth rates for e-commerce in nations outside the U.S., and the value of geographic diversification cannot be understated.

The 2015 annual report of the TJX Companies says it all. Net sales for the past fiscal year were $29.1 billion, which is greater than Macy's report of $28.1 billion. In the past year, sales increased 6.2 percent, reflecting customer demand for value fashion. Comparable sales increased 2 percent. It's significant that in the fourth quarter net earnings jumped 15 percent. Today, TJX Companies Inc. is the leading off-price retailer of apparel and home fashions in the United States and worldwide.

Target is calling it quits in Canada. The Minneapolis-based retailer announced this morning that it will shutter its 133 stores north of the border after a challenging two years with its first international expansion outside the U.S. Its Canadian operations have been plagued with problems from the start amid issues such as keeping shelves stocked and perceptions that its prices were too high. While Target initially hoped to begin turning a profit in Canada by the end of 2013, instead it has racked up about $1.6 billion in losses to date.

Japanese fast-fashion giant Uniqlo is coming under fire for what critics say are harsh and dangerous working conditions at the Chinese factories that make its rainbow-colored array of low-cost skinny jeans and cashmere sweaters. Undercover researchers from the Hong Kong-based Students and Scholars Against Corporate Misbehaviour (SACOM) found that workers at two Uniqlo suppliers in southern China were being underpaid, overworked and subject to unsafe conditions, including sewage-covered floors, poor ventilation and sweltering temperatures.

U.S. retailers beware — the British are coming! But it's not just the Brits. The Italians, French, Spanish and more are also invading the U.S., capitalizing on prime real estate as several homegrown brands shutter stores. Perhaps most emblematic of the shift is Sears’ recent announcement that it will lease out space in seven locations to European retailer Primark, which is opening its first U.S. store in Boston next year. Sears will still retain a significant presence in six of these spots.

Best Buy said on Thursday it will sell its struggling China business, Five Star, to domestic real estate firm Zhejiang Jiayuan Group in order to focus on its North American operations. The world's largest consumer electronics chain didn't disclose financial terms of the sale of the 184-store network, announced in a statement. Best Buy has struggled to fend off Chinese rivals in a crowded market, as other U.S. firms have complained that operating in the country has become more of a challenge.

Brick-and-mortar retailers have become the first U.S. business group to be disappointed by Republicans since their midterm election gains, as party leaders indicated that a bill to end tax-free internet shopping was doomed. Retailers such as Wal-Mart, Target and Best Buy have long railed against a perceived loophole that they say gives e-commerce rivals an unfair advantage by enabling many online shoppers to avoid sales tax. But on Monday, a spokesman for John Boehner, the Republican speaker of the House of Representatives, said a bill to tax online shopping wouldn't move forward in the final weeks of the current Congress.

Macy's and Bloomingdale's will expand their horizons by opening in Abu Dhabi, United Arab Emirates (UAE) in 2018. Until now, Macy's has remained a domestic retailer while other brands, including Bloomingdale's, have expanded globally. The stores will open in the Al Maryah Central, a new regional shopping center on Al Maryah Island. It's a mixed-use 3.1 million-square-foot development with retail, cafes, restaurants, a cinema, health club, luxury hotel and residential towers.