Leading retail organizations continue to place internationalization high on their strategic agenda. According to research from Planet Retail, international markets are becoming increasingly important contributors to retailers’ sales revenues. Most large retail organizations are looking to expand into new markets over the next five years, with a particular focus in developing regions such as the Middle East and Africa. Whereas in 2010, the 10 largest global grocers were active in an average of 15 markets, in just four years’ time that number increased by 10%, to 16.5 markets on average, and the growth is expected to continue for the next few years.
An important driver for this international expansion is the booming retail market in developing countries. While the world population has grown by 21% over the last 15 years, to 6.2 billion, retail sales in developing markets have soared by 350% and now represent more than half of total global retail sales. As the figure below shows, especially China and India, but also Indonesia, Russia, Brazil and Turkey are major contributors to net retail sales.
Looking at these numbers and trends, I think it is safe to conclude that all large retailers are looking for ways to get a larger piece of the pie by going abroad – and doing so as quickly and seamlessly as possible. Expanding internationally can help reduce dependency on home markets and help increase total sales revenues. At the same time, retailers are looking for ways to limit risk and fund the investments needed to be successful in foreign countries.
The Diebold Nixdorf Retail team has recognized and begun to address these trends already, through frequent conversations with our internationally oriented global customer base. This led us to rethink the ways we can assist retailers in their international expansion projects.
The Innocents Abroad
There are many challenges for a retailer entering a new market in a new region: local retail market knowledge, language barriers, local tax regulations, currency exchanges, staffing, and logistics – just to name a few. Most of these can be researched extensively upfront; a plan can be written, languages can be learned, a local team can be deployed to execute upon the plan and open the first store, and so on. However, one crucial obstacle remains, and it’s also the local element most subject to change at frequent intervals: local tax and legal regulations.
Retailers absolutely must get local regulations right if they want to operate legally. Yet these regulations are in constant flux and require frequent adaptations to daily retail operations. The impact is enormous: point-of-sale (POS) systems need to be adjusted, fiscal printers need to be implemented, staff must be instructed, specific financial data has to be provided to the government bodies, and so on. The legal and tax regulations can be a nightmare for global retailers, especially when doing business in countries where governments are not so well-established.
The Answer to Your SOS Call
Based on feedback and input from our customers, Diebold Nixdorf has improved the way we facilitate retailers as they enter a new country. This year, we introduced “Country Packages.” These information-packed Country Packages comprise all the legal and fiscal rules required to operate and run a retail business in a given country. They also ensure integration with fiscal printers and, optionally, with local EFT solutions.
Whereas in the past, this business logic was added as a project-specific implementation by our Professional Services staff, Country Packages are now directly delivered through our Software Development team as a standard add-on to our software solutions. This shift means they’re now standard products with a standard license fee, regardless of the legal and fiscal complexities of a country. That “standard” label also means they’re maintained and updated more frequently, with bug-fixing as well as all the latest changes in legal and tax regulations. As these fiscal changes can occur frequently, retailers who take advantage of Country Packages have one thing less to worry about when expanding internationally.
To support this solution and its standardization, we’ve established a Centre of Excellence for everything related to country-specific requirements, taxation, fiscalization and other legal regulations. Our global experts are available to help retailers on a daily basis as they enter new markets, to help them build their business abroad more efficiently and effectively.
Key benefits of Diebold Nixdorf standardized Country Packages:
- Always up-to-date legal and fiscal solution for each country
- Upfront clarity in regards to the cost of international expansion
- Better planning capabilities for roll-outs across multiple countries
- Dramatically reduced risk of project delays due to local customization requirements
- Faster time-to-market
- Full compatibility with other software solutions from Diebold Nixdorf
Curious to see how a Country Package could ease your transition abroad? Contact your local representative or connect with us today to start the conversation.