The European economy is the largest in the world, with a GDP of around €14.3 trillion. As economic recovery accelerates, the commercial opportunities that Europe presents become more and more attractive to retailers looking to expand their operations. That said, as we approach the EU exit poll, most retailers thinking of any new move into Europe will await the outcome before making any major decisions.
Even if a free trade agreement is reached as expected, the short term uncertainty will likely put most off any immediate plans. I have a feeling that Europe is only really of such interest while it is part of a larger opportunity which is UK centric and of strategic importance. In reality, it costs much the same in terms of time and planning to open 60 stores as it does five; unless a retailer is underwriting these as start up costs with a view to building future business. Otherwise, it is unlikely to stack up commercially.
It is clear that setting up shop in any location is a very substantial undertaking, but with the right strategy and management, and providing it still meets their core business objectives, establishing new premises in Europe can be handled smoothly and cost-effectively. Based on our extensive experience with deployment projects in Europe and following on the knowledge gleaned through recent successes, we’ve put together our top tips for setting up shop in Europe.
Get input right from the start
Take the opportunity to consult an expert; the best of these project managers and service providers have experience with many international rollout programmes and can advise on strategy for store design and IT procurement, and for the rollout of the development project itself. Optimal store formats, customers’ natural flow around the shopping floor and other culturally-reliant business-critical factors can all differ from country to country. A wireless survey is always a good idea; mapping out connectivity to better understand how customers and staff alike will use devices on-premises.
Find a partner with excellent deployment capabilities and a proven track record
Unless you have extensive project and infrastructure development capacity within your company, the most cost-effective approach is generally to work with a reliable deployment partner who can deliver a comprehensive service, from procurement through delivery to installation and on-site training. These partners should have extensive Europe-wide logistics capacity, warehousing and engineering capabilities and a mobile and connected team of experienced engineers. Deployment partners should cover all aspects of project management; preparing a roll-out programme, risk register, change control and action log, collating or writing installation procedures, building instructions and site sign-off documentation, scheduling installations and liaising with customer sites and contacts.
The right partner should be able to handle a project of any size smoothly. Barron McCann were recently involved in the opening of a leading international retailer’s biggest store in Spain; a huge project which resulted in a beautifully-designed location employing 573 people, covering 133,000 sq.ft of retail space over five floors and fitted with 131 cash registers and 91 fitting rooms. With the right support, ambitions of all scales can be realized.
Consider a managed solution to reduce upfront spend
The big spend on IT systems, EPOS and other electronic equipment when opening a new store can be intimidating, especially with the added logistical demands of an installation outside the UK, but some service providers can offer fully managed IT and EPoS solutions which can substantially reduce your immediate costs. Using a vendor-independent consultant with extensive experience with a wide range of manufacturers and their distribution supply chains can help you source equipment at very competitive prices.
Europe is looking brighter than it has in a long time, and with a lot of retail real estate still undervalued following the economic troubles of the past years, the stage is perfectly set for ambitious retailers to cross the channel and establish their first European location. The free trade zone blurs economic boundaries between countries to simplify international trading, while the expertise and capabilities of service providers can remove the rest of the complexity and ensure that your new location lets you realize all of the opportunity you’ve committed to pursuing while making all of the hassle somebody else’s problem.
Rob Griffiths is Head of PIDS, Barron McCann (Project, Infrastructure and Deployment Services)