Boston Consulting Group predicts that by 2016 there will be three billion Internet users worldwide.
In theory, this meanssomethingapproachinghalf the planet could be shopping online within a few years. For merchants who remain focused solely on their home markets,these are three billion reasons to consider expanding their online sales operations to other countries. Whether you’re struggling for growth in a saturated domestic market or seeking to expose your brand and products to a wider audience, an international strategy can be a cost-effective way to generate more sales.
Going global is more complicated than merely offering worldwide shipping, however. Multichannel retailers must also consider the costs and complications of running websites in different languages, as well as international customer service issues and dealing in foreign currencies. To help make sense of the challenges, we put together a list of expert tips that can help merchants sail confidently into international waters.
1. PICK YOUR TARGETS
Selling overseas doesn’t mean you have to venture to exotic locations or sell everywhere all at once. A phased expansion to carefully selected markets is a smarter play. Often these markets will be geographic neighbors, limiting the cost and complexity of delivery, or cultural cousins that share a common language and business outlook.
Zeroing in on specific countries enables you to study the competition and gauge how your brand will be viewed by consumers, whose spending habits may be shaped by differing social mores and religious practices. A targeted approach can also guard against unexpected logistical headaches. Does the country have regulations that restrict the import of your product? How might sales taxes or tariffs impact the landed cost of your goods? The last thing you want is for your customer-bound packages to be seized at the border or delivered with unexpected bills for customs duties.
2. PRICE SMART
Despite the availability of online currency calculators, if your online storefront displays product pricing in your home currency, you’ll be confusing your potential overseas customers. Forcing shoppers to take extra steps by figuring out pricing on their own leads to abandoned shopping carts.
Implementing an automated currency converter is one solution. But converters don’t take into account other factors that influence what foreign customers may be willing to pay for your products. Your pricing should reflect not only exchange rates, but also other relevant factors such as the relative cost of similar domestically made goods as well as the spending power of overseas customers and their willingness to pay extra for imports. After taking these factors into account, pricing for products aimed at foreign buyers should be displayed in their currency in comforting round numbers.
3. SHIP SMART
Research by Akamai shows that shipping and handling issues are responsible for 38% of failed e-commerce transactions. Make sure your international shipping policy and pricing is easy for shoppers to find and understand. Rather than burying the details under a link at the bottom of the page, or only revealing shipping costs at checkout, successful multinational retailers often display shipping charges right on the storefront homepage—this display is triggered by software that recognizes visitors’ IP addresses and identifies their country of origin so that the appropriate policy is conveyed.
To maximize sales, it helps to offer shipping options—from inexpensive, snail-mail surface delivery to pricey one-or two-day airfreight. Overseas customers might be willing to pay whatever it takes to get their hands on your product as soon as possible. Conversely, they might be coming to you for a bargain that would be spoiled if their only shipping choice is high-cost express.
Communicating estimated delivery times is important in building trust. Set expectations up front and provide e-mail updates on the progress of an order, or a tracking number from your delivery service to keep customers informed and happy.
4. EXPERIMENT WITH SHIPPING CHARGES
There is a lot of behavioral psychology wrapped up in shipping charges, so experiment with pricing and promotions to see what works for your brand. Free shipping has been shown to increase sales dramatically for many e-tailers. It’s more easily implemented in domestic markets, but many larger retailers now offer free delivery to international customers, too.
Do your sums and see whether you can reduce delivery fees and absorb the hit through slightly higher prices or larger sales volumes. Offering free shipping for orders over a certain value, or actively cross-selling additional products—so the customer can rationalize the delivery fee across several purchases—can also help increase the value of each basket.
5. CALL IN THE EXPERTS
Outsourcing some or all of the delivery logistics can leave you with more time to focus on building your brand and business. Services such as UPS and FedEx offer tools and website APIs that help you find country specific import regulations, calculate the landed cost of your goods and even integrate shipping tools into your online store.
A step up from that is to hire a fulfillment service. Often the retailer pays a flat fee per order and the fulfillment service takes care of the packing and shipping—including complying with local rules and regulations. Fulfillment services often have global warehouses, enabling you to inventory products in selected countries if your sales are large enough, to benefit from domestic shipping rates.
Some markets cry out for specialist help. By 2015 China is expected to surpass the U.S. to become the world’s largest e-commerce market, with around 30 million new online shoppers each year. Overseas firms can reach Chinese consumers through the country’s giant online marketplaces such as Tmall and Taobao Marketplace, but fulfilling orders can be a challenge. That has led to the rise of specialist services such as Export Now in the U.S., which aim to make it easier to sell and deliver goods to Chinese consumers.
6. THINK GLOBAL, LOOK LIKE A LOCAL
It may be the very foreignness of your brand that attracts overseas shoppers, but localizing your web presence still makes commercial sense. Get a URL in the top-level domain of each country, the same way Amazon.com morphs into Amazon.ca, .de, .fr and .co.uk. This not only protects your brand and wins trust with local shoppers, it also helps your site climb higher in local search rankings.
If your sales potential warrants the expense, create a local-language version of your site for non-English speaking countries. While 40% of online shoppers in the U.K. buy from overseas stores, according to digital media agency 7thingsmedia, the rate is only around half that for the French and Germans. Translating your homepage and ads can lead to a 20% increase in conversions, according to paid search agency Net Media Planet, while localizing an entire site increases the conversion rate to 70%.
Even localizing for different English-speaking markets can bear fruit. U.K. fashion retailer Karen Millen increased conversion rates in the U.S. by 25% simply by Americanizing their spelling and removing Anglophone terms such as “autumn.” In all markets it pays to localize your marketing. If you’re a U.S. retailer and don’t know why it’s wrong to send an e-mail to U.K. customers in June telling them to buy their mom some pants for Mother’s Day, then ask a Brit why (hint: “moms” are mums, and “pants” are undergarments).
7. GO MOBILE
No matter where you are, the rise of smartphones and tablets has made m-commerce more important, so make sure your site works well on mobile devices and consider creating a mobile app to make ordering easier. Research mobile Internet use in your target market and factor consumer preferences into your plans. In China, where 80% of active net users access by phone, m-commerce is up 181% year-on-year and is rapidly closing in on 10% of all online sales.
8. MAKE PAYING PALATABLE
A sale is only a sale when you get paid, so be sure to make it as easy as possible for international customers to hand over their money. Credit cards are not lingua franca—preferred payment methods vary from country to country. Wire transfers are the most popular payment method in Germany, the Czechs prefer cash-on-delivery, the Japanese love the Konbini system, which enables payments to be made at convenience stores, while most Chinese use the homegrown PayPal-like online payment service Alipay. Adapt to your target market wherever possible.
With Boston Consulting Group forecasting the online economy in the G-20 nations will be worth $4.2 trillion by 2016, ranking it just behind the national economies of the U.S., China, Japan and India in size, a little localization could bring you a lot of additional sales.
