7 APRIL 2014
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Making global, local: getting your business ready for overseas shoppers
Ron Kalifa was appointed Vice Chairman of WorldPay in April 2013. Previously, as Chief Executive Officer, Ron led WorldPay through its transition to an independent, private equity company following its divestment from the Royal Bank of Scotland in 2010.
Before becoming Chief Executive, Ron held various roles within RBS where he built the WorldPay business via acquisition, first heading up the WorldPay gateway business following its acquisition by RBS in 2002. Following this, he integrated WorldPay with NatWest’s Streamline business and then led the acquisitions of Bibit, TrustMarque International, Lynk, Cardsave, Envoy and most recently, YESpay to create the leading global payments business WorldPay is today.
Thanks to major international events such as the recent Olympic and Paralympic Games and this year’s Commonwealth Games, along with cultural phenomena like Downton Abbey and One Direction, the UK is riding the crest of a tourist wave in 2014. It’s not just heritage sites that are benefitting from this tourist influx, either: the UK is fast emerging as a shopping hub for international visitors, presenting enormous profit potential for travel retailers and service providers who are on the ball.
UK Government initiatives such as tax free shopping for non-EU visitors is supporting this explosion in overseas interest, as holidaymakers rush to purchase items at a lower cost than their home countries. Designer items are particularly competitively priced, which has contributed to a significant rise in tourists from emerging markets such as Malaysia, Russia, the UAE and China.
In the UK hotels and motels sector, average sale size for Chinese, Russian, Malaysian, US, and UAE visitors has increased significantly over the last 12 months, with China growing by a substantial 28% . Conversely in the UK travel sector, growth in average sales for Chinese, Malaysian, US, and UAE visitors was more modest as spend grew by just 1% over the last 12 months .
In terms of spend by country, UAE cardholders are the biggest spenders, with an average sale size of £167 – double that of Americans and over eight times that of Russian cardholders . However, whilst Russian cardholders may spend less, the sheer volume of transactions is significantly higher. Payments made by Russian cardholders have nearly doubled year-on-year, whereas volumes for American cardholders decreased 9% . With these types of figures it is clear businesses would do well to consider how to attract more Russian and UAE customers when visiting the UK.
For the travel and hospitality industry, the rise of the shopping holiday is being felt throughout the UK. Although London attracts the lion’s share of overseas visitors, other UK cities such as Bath, Edinburgh and York also benefit from a strong tourist trade, and foreign holidaymakers are even travelling to specialist retail outlets such as Oxfordshire’s Bicester Village for tax free designer shopping sprees.
With the importance of foreign purchasing power in the UK set to grow even more, the challenge now is to take control of this trend. Are you doing everything you can to maximise this revenue opportunity and provide the best possible experience for consumers of all nationalities?
What are the challenges when encountering overseas customers?
On the whole, nationality and location are irrelevant when it comes to increasing customer revenue in the travel industry; the key to success is outstanding customer service, which you should be offering to everyone! Whether you are a 5-star hotel, a tour operator or a railway network, your end goal is to make customers feel comfortable and fulfil their needs.
The main difference between domestic and overseas consumers, however, is the payment process. How often have you shied away from making a purchase or taking a trip whilst on holiday because you struggled to mentally convert the cost into a figure you understand? As a retailer, overcoming this currency barrier will promote familiarity, increase sales and breed new tourist commerce opportunities for your business.
How can I make my business ‘global friendly’?
The key to attracting transactions from foreign visitors is to make paying convenient for them. Offering a Dynamic Currency Conversion service (such as WorldPay’s MyCurrency), which gives overseas visitors the chance to see the price and then pay in their own currency, is one option which can be rolled out in a cost effective, convenient manner.
Another way to improve the overall experience for international visitors, and improve your chances of increasing revenue is to accept some of the more popular cards from outside of the UK. One of the biggest names is China UnionPay – China’s only home-grown card provider – which is the fastest growing card scheme in the world. China UnionPay offers Chinese tourists a familiar way to pay for goods and services, which can be especially comforting to holidaymakers travelling in the UK and encountering language and cultural barriers at every turn.
The importance of having an attractive option for Chinese shoppers cannot be underestimated. As China UnionPay’s first acquirer in Europe, WorldPay has seen first-hand the power of spending by Chinese visitors. During Golden Week – China’s national week-long holiday in October – last year, Chinese card transactions in the UK increased by 20%. In 2013 WorldPay processed over £18.9m in payments for Chinese shoppers visiting the UK.
With the number of Chinese visitors to the UK multiplying eight-fold during the past 10 years, according to the World Tourism Organisation, China’s tourist spending power will only gather force in future.
Although China’s revenue opportunities deserve particular attention, the message for dealing with overseas customers of any nationality is the same: treat the customer personally, loyally and on terms they understand, particularly when it comes to paying. By applying this essence of local service, you can maximise your trading opportunities as a truly global business.
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