Made.com announced earlier this year that it will expand its business to Portugal, Italy, Spain, Sweden and Denmark. This week we had the opportunity of sitting together with the man behind these ambitious expansion plans, Damien Poelhekke, MD of Made.com Northern Europe. Here’s what we talked about!
How do you go about launching a brand in a new market and how do you manage to make it as successful as it is in current markets?
Well, before deciding in which market we want to expand, we look at what has driven success in our existing markets. Then we verify if and how we can replicate this in new territories. For us, being a digital native company, the are few key variables and criteria to take into consideration: e-commerce penetration, people’s behaviour online, mobile shopping penetration, and of course we have to consider how open-minded the audience is toward online shopping overall, not only towards furnitures brands.
Other relevant factors are the size of furniture and interior market of a country, the easiness to conduct business both in terms of payment methods and logistics/operations. In Southern Europe for example, we noticed there’s less online competition than in other markets and eCommerce is very much up and coming.
Once the decision has been made, the next step is: how do you do it?
One of the first and basic things to start with is a new website, then operations and marketing. The key to everything is to get the right people to execute locally: we look for professionals with deep knowledge and a relevant connection with the target market or with great experience in international expansion.
So, for us, the first step was to build dedicated teams and try to bring in-house country experts in order to have a broader and deeper understanding of the culture and the country we want to work in.
If in existing markets we brought everything in house, in new markets things can be slightly different. We’re currently discussing it and we are going toward working with agencies, in particular in the first phases, to reduce the exposure and the risk of being stuck with fixed costs.
The goal is to set up the business in the most efficient way to learn from the market and understand the different cultures in-depth and quickly, gather as many learnings to see if there’s appetite for our products or not and fine tune the marketing mix.
I strongly believe in growing your business organically by focusing on brand without taking too much risk of high investments in the beginning.
You put the focus on hiring local people as they have a deep understanding of the local market to have a better grip of the culture as well.
What are the cultural differences that impact the expansion process the most? Beside the pure metrics, do you see cultural differences being reflected in different purchase behaviours?
You need to understand the whole mindset of how people go about shopping, whether online or offline, to increase the likelihood of success and to understand how we need to position ourselves. In Southern Europe, the audience could be less keen to buy directly online than in the North of Europe, for instance. These behaviours are clearly reflected in the payment choices, too.
In Sweden and in Germany in particular, there’s a huge appetite for paying by invoice after delivery.
Means of delivery are also different. In some countries, customers are used to collect online orders at pick up points, others expect delivery to the front door, for the item to be assembled or to be DIY.
Understanding all these different local flavours is key to provide the consumers with the tools and means they are used to buy with, to then position yourself more uniquely than the competition.
The next question is: how do we communicate our message to people in different countries? Positioning your messaging becomes crucial in different markets.
In UK, we’re a British brand and we’re quite a mature household brand, so the way we position ourselves here is completely different from how we position ourselves in different markets.
If in our home country we focus more on specific design elements, in new markets we need to build the story of what we do, what makes us stand out and what we stand for.
This leads me to the next question: brand positioning. In Made.com there’s a lot of focus on the Scandinavian design.
Now that you’re expanding to the Nordics, how do you think this will be perceived? Do you need to build the brand from scratch or will you keep core values that you adapt?
Well, your core is always going to be the same. We design products, we work with designers and we launch collections. This is not going to change.
The DNA is the core, what changes is how you explain it to people.
In new markets for example we need to explain how we work, the way we design and how we let the makers directly produce the furniture.
Regarding the Scandinavian design, of course it’s something we’ve been discussing a lot in the last few weeks. Now for the first time indeed we’re going to the home of Scandinavian design and literally using that wording. The main question is: does Scandinavian design exists in Scandinavia?
All of these are little but crucial nuances you need to think of and hopefully understand prior to expansion. We want to launch as soon as possible and use the time to learn as much as we can to adapt the wording, the communication, the marketing strategy, enabling that we spend money on the right things.
Ok, so now everything is set, you’re in a new country, you’re ready to launch but things are not working out as planned. How do you minimise the chance of mistakes? How long is the feedback cycle?
Once the site is ready, the tech is ready, operations are ready, we switch on the marketing on low profile, we test for a few weeks and analyse the whole funnel and user journey.
A few weeks later, once we have those learnings and we’ve adjusted the offer, we are set up correctly and reassured that the chance of mistakes are minimised, we’re good to go.
That’s when we create a big launch event with press, influencers and pop up stores.
A proper hard launch to say “Hey, we’re here and this is our story.”
The pace really depends from company to company, of course everyone wants to launch as soon as possible. In our specific case, we started looking into new territories last summer, we started with research and built a business unit to kick off in January. At the same time we started gathering the right technical and logistic resources, agencies and partners. Then, for three months we set up the team further and integrated departments to ensure a smooth process.
By the end of March we will go live with the website and logistics to test, gather insights and learn for a few weeks before the big launch we plan for the beginning of May.
If you would like to hear more from Damien about international expansion, he will join us at Savant eCommerce Amsterdam for a Keynote “The role of brand equity in the digital era”. Check the event and full agenda here!