Partner Article by Nenad Cetkovic, Chief Operating Officer at Lengow
Not so long ago, the idea of travelling from the UK to Australia involved several weeks and a boat. Now, we can reach the other side of the world in less than a day. This increasing globalisation makes countries that may have seemed thousands of miles away before, now feel much closer. This applies to the online retail world as well. Before the rise of eCommerce, buying products from other countries required having a generous friend to either send you items or leave extra room in their suitcase to bring it back for you. Now any product you could possibly want is just a click away. So what does this mean for brands and retailers?
For brands and retailers, selling only domestically is no longer an option if they want to remain competitive in the market. As a case in point, more and more consumers are looking beyond their country’s borders to find products that may not be available at home, or to find products at a discount. If online retailers don’t serve these shoppers, they are missing out on a huge stream of potential customers. Indeed a study by DHL found that businesses that start to sell internationally boost their business by 10 to 15%, and with total online retail sales continuing to rise, this is no small amount.
This begs the question, if expanding internationally is so good for business, why isn’t everyone doing it? Well there are some logistical challenges that anyone selling overseas will need to overcome. Firstly, customers ordering online now expect shorter and shorter delivery times, thanks to such services as Amazon Prime. If retailers are competing with local businesses, delivery times will have to be comparable, which can end up being costly if they don’t have a fulfilment hub set up in the country.
There is also a fear of fraud when consumers purchase from abroad. As a retailer may not be as well known in a different country as they are at home, there is a chance that consumers may not trust them. This means they will have to spend some time making sure that their website is highly secure, as well as offering payment options that consumers in that country feel most comfortable with.
Taking all of these factors into account, you will definitely need to have a cross-border plan in place. Firstly, online retailers need to choose which market or markets they want to focus on. Focusing on select markets instead of just going for everything at once means that they can hone their strategy to see what works and what doesn’t. Then comes the time to decide which marketing channels they want to distribute their products on.
An obvious option when it comes to starting off abroad are marketplaces. These platforms allows retailers to have access to a high volume of clientele from the get go. And while large global marketplaces such as eBay and Amazon are good for business, they are not the only choice. There are many smaller and more specialist marketplaces that sellers can find success on. Furthermore, marketplaces give retailers a taste of what selling to a particular market is like, without needing to invest the time and money of setting up their own website and business in said country. They allow retailers to test things out without the huge risk.
But when it comes to selling products abroad, retailers will have to make some choices. The first decision to make is how you’re going to localise your content. Obviously, if a retailer plans to fully dedicate themselves to a certain market they will need to translate their website into the local language. This does not only include product details but all textual information on your page, including slightly less obvious details such as URLs.
Retailers who offer content alongside their products, such as blogs or tutorials and videos, will also need to decide whether they want to translate their original content or simply create new content for the target language. Both ways have advantages and disadvantages, with translation being time-consuming and costly, especially if retailers want to translate all of their content, and content creation requiring a local speaker to create content for them.
Beyond translation, though, there is the need to localise. When starting out in a new country, there are a lot of things to consider, such as different time zones, which will affect customer service operating hours, for example. Moreover, on the subject of customer service, retailers must make sure they have reliable customer service in the local language. Furthermore, it is important to consider different cultures, holidays and sales periods that might be commonplace in one place could be completely different in another. Therefore, keeping an eye on local competitors and really researching the target market can be hugely beneficial to retailers expanding abroad.
Retailers will also need to take payment preferences into account. It is important to remember that while debit card payment may most popular in the UK, in Germany, for example, the preferred method is direct bank transfer. Offering customers a wide variety of payment options can put international consumers at ease, appeasing their fears of fraud, and therefore, turning into more sales.
The final part of the strategy for international expansion is shipping, actually sending products to the customer. To compete with local competitors, retailers will have to carefully consider their shipping policies. Though most consumers do not expect next-day deliveries, waiting more than a week could put them off. Furthermore, think about shipping costs as these can lead to high cart abandonment rates if consumers deem them too high. Retailers will need to carefully weigh the pros and cons of integrating shipping costs into the product price or having a separate cost. If selling outside of the EU, it is also important to remember that customs duties may need to be paid. The seller is under no obligation to tell the customer about these charges, however, in the interest of good customer relations it is may be worth mentioning it.
Furthermore, it is also worth thinking of returns. Again, consumers expect comparable returns processes to those of domestic businesses. Having a complicated returns policy can be disastrous when going cross-border. Instead, consider having a longer returns period (of at least 14 days), as well as a local returns address (in fact this is obligatory for several marketplaces). This way the customer does not feel that buying from abroad locks them down in a way that buying locally does not. Free returns are also becoming more and more expected so retailers will need to contend with that as well.