How to prepare your data for expansion

Don't underestimate the initial market analysis

Preparation is the foundation of a successful expansion. We need to know who the competitors are, whether we can serve the new market logistically, how large the market is, what its economy looks like, and who the target customers are. An initial market analysis maps all of this. It is usually prepared by someone with experience in the market—in GymBeam's case, the country manager.

From a data perspective, we recommend looking beyond the overall size and economic health of the retail market. E-commerce's share of retail gives us a clearer picture of the market's potential.

The first priority is researching the competition. For GymBeam, that means analyzing up to 20 competitors: their strengths, weaknesses, market share, and details such as the number and mix of payment methods, delivery options, and delivery times. We also care about how fragmented the market is. A larger number of small competitors is better for us than a few big players.

The analysis also covers the "market standard." We look at the market's biggest e-commerce players and the services they offer customers today. We are especially interested in delivery times, payment methods, the standard of product detail pages, and the design of the full purchase process. The goal is not to copy the competition, but to understand what customers in that market expect.

Where does the data for this analysis come from? Google itself is our biggest help: we can request _query sets_, or search volumes for specific queries. Comparing _query sets_ across markets shows us where our product may have more potential.

Google Ads Keyword Planner is useful too: we can export several years of keyword data, then use it to assess traffic for individual categories and optimize them.

Google Trends and Market Finder are also worth mentioning.

If Google's data is not enough, or is for some reason unavailable or of poor quality, we can use freely available data from statistical offices and the OECD, or buy analyses from Euromonitor or Statista.

Similarweb can help with a preliminary competitor analysis, although its results should be taken with a pinch of salt. Martin has also had good experiences with Ahrefs.

Before entering a new market, GymBeam commissions a market analysis of about 100 pages covering local conditions in depth. If you are a smaller company in a narrower segment and don't aim to become the market leader, a more modest analysis focused on the most important metrics will be enough. At a minimum, research the total retail market and e-commerce's share of it. Make full use of Google's data too, including _query sets_ and keyword analysis.

The more thoroughly you prepare, the fewer avoidable problems you are likely to encounter after entering the market.

If you are about to enter a new market and aren't sure how to put such an analysis together, don't hesitate to get in touch. We will gladly help you with it.

We're entering a new market!

An entry analysis is essential, but we must also consider the things it cannot easily capture. Before entering a new market, you need to set clear goals.

The most important goals are order volume and revenue. We should set both realistically, in line with our logistics and staffing capacity. If we ship from a central warehouse, we have to account for cross-border logistics and reach enough volume to make shipping economically viable. The aim is to bring the cost per parcel as low as possible.

To reach our order and revenue goals, we need to set a marketing budget. We can use CPA (cost per acquisition), with Margin ROAS as a supporting metric.

Let's walk through an example:

_We are entering a new market and set ourselves a revenue goal of CZK 1,000,000 (Czech koruna) within two months. With our current staffing and after optimizing logistics processes, we find that we can serve 400 customers over this period. To meet this revenue goal, the average order must be worth at least CZK 2,500._

_From calculations of the optimal CPA and Margin ROAS, we set promotion costs at CZK 200,000, expecting 20,000 visits to our online store, which at a standard conversion rate of 2% should give us those 400 customers._

With goals and expectations set this clearly, we can quickly spot problems and deviations. If the conversion rate is too low, we can examine the purchase funnel and see where people drop out. If traffic falls short, we can analyze the product portfolio and focus on promoting acquisition products. If the average order value misses its target, we can explore the contents of customers' carts.

Martin shared a GymBeam experience that illustrates why monitoring the product portfolio, shopping-cart composition, and CLV (Customer Lifetime Value) matters so much:

During one market expansion, all the metrics looked very good, but the optimistic growth they seemed to promise never materialized. After comparing data across markets and analyzing shopping carts in depth, the team found that customers were buying a different product mix than anywhere else. The problem was that these products had far lower retention than the ones customers bought in other markets.

That is why we strongly recommend monitoring the product side of an expansion and estimating CLV by acquisition product or category when calculating long-term profitability. To keep an eye on customer retention in the new market, track how cohorts develop. The time to second purchase for the top quartile of customers can serve as a proxy metric. It gives us a quick initial check of whether customers in the new market behave as expected and in line with what we see elsewhere.

You cannot make informed decisions without solid web and data analytics. GymBeam strives to embed analysts in each team so its specialists can base their decisions on data. At the same time, the analyst needs to understand the problems that team is solving. Finding a good analyst is no easy task; finding one who also understands marketing is harder still.

What else do you need? We definitely recommend support from local teams, who can handle tasks such as communicating with influencers, along with customer service that can resolve complaints and problems in the local language. Don't forget differences in VAT rates or legal regulations either, even though most should be standardized within the EEA.

It's all about the data

Data rules the world, and that goes double for expansion. It helps us decide whether to enter a market, guides us through the launch, and remains essential as we optimize operations and evaluate success. Data is the key to understanding customer behavior, measuring product performance, and evaluating and improving marketing. Specifically, we can focus on:

• Order and revenue volume: we use these to judge whether the entry into the new market is successful and to optimize logistics
• Acquisition costs (CPA): we track them over time and, based on them, manage marketing investments effectively
• Margin: an important metric for assessing profitability
• Purchase funnel: we analyze product views, adding to cart and moving to checkout, and identify the places where customers most often abandon the purchase process
• Product analytics: we track conversion rates by product category, optimize the product range, and focus on the best-performing products
• Retention rate: repeat purchases and returning customers are the key to long-term success in a new market
• Customer Lifetime Value (CLV): helps us understand the value a customer brings over the course of the relationship. Identifying products with a high CLV helps us choose the best products for acquisition
• Profit and Loss (P&L) of individual markets: we track profitability on a monthly basis and compare it with other markets

First, we have to collect this data correctly. That is usually straightforward for internal data, but everything else requires a solid digital analytics implementation. Calculating CLV or examining marketing costs in detail also calls for advanced modeling.

Don't underestimate brand marketing

During the webinar, Martin and Adam touched on many topics that could each fill a webinar of their own.

One of them is brand campaigns and building awareness in a new market. Influencer marketing, managed by a local team, can help greatly here. The local team understands what people in the market need and can choose the right way to communicate with them.

Reviews can also inform brand activities—and not just our own. Competitor reviews show us what frustrates customers most, so we can address the same issues in our own business, even as a preventive measure.

Remember that brand activities, such as working with influencers, affect the long-term success of entering a new market. We probably won't see results as quickly as we do with performance marketing.

Why Southeast Europe may be a good starting point

If you are preparing for your first expansion, it can pay to start with a market that is manageable for your business rather than the most sophisticated and saturated market available. Martin named Hungary, Romania, Bulgaria, Croatia, and Slovenia as possible starting points to research. The right choice depends on the product, customer expectations, competition, logistics, entry barriers, and advertising costs in each market. Validate those assumptions with current market research before deciding where to enter.

In our experience, including our work with Snowboard Zezula, gradual test expansions can also make sense. They still deserve careful preparation, but the risk of poor preparation sinking the entire expansion is significantly lower.

More Penguin Webinars

For current Penguin Webinar recordings and event announcements, visit our webinar page.

And if you are working through an expansion—or another marketing, data, or analytics challenge—don't hesitate to contact Adam. He will be happy to help with your questions.