U.S. Retailers Take Their Business Virtually All Around the World
The weak dollar makes the U.S. a good place to shop for foreign consumers and now those that don't have the time or resources to jet over can buy from American retailers that are opening up their online operations to accept orders from parts around the globe.
According to The Wall Street Journal, Amazon.com, Bluefly.com, Neiman Marcus, Bergdorf Goodman, Saks Fifth Avenue, Blue Nile, Abercrombie & Fitch, Coach and Macy's are currently shipping goods to markets outside the U.S. or moving in that direction.
A survey conducted by Forrester Research last year for Shop.org found 41 percent of retailers operate internationally. Of those without international operations, 23 percent planned to begin in 2007 and 38 percent planned to get started this year.
There are some challenges to serving customers in foreign markets, however, including taxes, import duties and shipping. According to the Journal, retailers sending product overseas will often calculate and collect the various levies based on the market. To offset shipping costs, some retailers are setting up distribution centers inside foreign markets.
"Everyone wants to jump on the 'dollar-is-weak bandwagon,' but it is fraught with challenges," Sucharita Mulpuru, a Forrester Research analyst, told the Journal.
"It looks great in a PowerPoint presentation, but the execution is not so simple," said Lauren Freedman, president of e-tailing Group.
Discussion Questions: Will the rush to attract shoppers from foreign markets lose its luster once the dollar rebounds or is this strategy solid regardless of exchange rates? Most of the retailers mentioned in the Journal article are large businesses that serve luxury consumers. Is selling to foreign consumers online something that makes sense for small retailers and those that sell products aimed for the lower economic end of the market, as well?