3 Tips for Successfully Launching E-Commerce Brands Internationally
Picture a fast-growing digitally native vertical brand (DNVB) based in the U.S. After a few years of establishing a great relationship with American consumers and growing domestic popularity, it’s time to expand into new territory and sell cross-border.
Global expansion has the power to transform a brand from a small, local player to a global household name. Before launching in new markets, however, it’s important for brands to fully embrace the importance of localization. By following this three-step, customer-centric strategy, DNVBs can position themselves for international success:
1. Create a Local Customer Experience
Customer experience is arguably one of the most important aspects of retail today. While a brand may have nailed its customer experience in its home country, consumers in other countries may have different preferences and will expect brands to localize accordingly. While local language is an important element of the customer experience, it's only one of many variables that brands need to consider.
In each new market, consumers will have country-specific preferences along the entirety of the e-commerce journey. Along this journey, brands have many decision points which are impacted by local preferences — e.g., browsing to details displayed on product detail pages (PDPs) to the payment methods and shipping options offered at checkout to the level of customer service provided. For example, consumers in China and South Korea are more tolerant of site design flaws (e.g., small font), but they have the highest level of customer service and fulfillment expectations relative to other markets.
International consumers visiting a U.S. brand’s website should feel that the experience is comparable to visiting a local brand’s site. Brands can ensure this is the case by using IP geolocation tools to identify a visitor’s country of origin. Using this information, brands can surface the correct localization settings (e.g., the local currency, the locally preferred rounding convention, accurate duty and tax). Brands might also consider offering website visitors the ability to self-select their location via a drop-down menu or a popup, often referred to as a welcome mat.
When targeting their catalogs to consumers, it's critically important for brands to take into account any import restrictions in that country. If brands don’t factor restrictions in, they not only risk having their goods stopped at the border by customs, but they also risk disappointing their customers by displaying and promoting products that ultimately cannot be purchased.
Providing top-notch customer service may sound like obvious advice, but many brands forget this aspect of e-commerce when launching in a new market. Offering a “frequently asked questions” (FAQ) page that encompasses policies for international orders can go a long way to build trust with international shoppers.
2. Pricing, Payments, Taxes and Duties
Second to creating a localized experience, pricing strategy is crucial to cross-border success. Of 4,000 international apparel shoppers surveyed, 61 percent said that price transparency and makeup was the most important factor in their purchase decision. While some customers may be savvy enough to convert currencies on their own, displaying the price in local currency removes needless friction from the consumer journey. In addition, displaying and clearly messaging applicable taxes and duties not only increases price transparency, but can lower cart abandonment rates by removing surprise fees at checkout.
When displaying prices, research what consumers in each country prefer when it comes to incorporating taxes and duties into the final price. In some markets (such as China) consumers expect tax and duty to be included in the price, whereas consumers in other markets (such as Canada) expect a detailed breakdown of all additional fees separate from the price of the product. It’s important for brands to test various ways of displaying taxes and duties both on PDPs and at checkout.
Once the consumer is made aware of the amount they're expected to pay, it's important to make sure the collection of that amount is also straightforward. There are two different options for collecting taxes and duties: during checkout or upon delivery. Enabling customers to pay taxes and duties post-purchase may appear to be the cheaper option; however, it has the potential to create an unwelcome surprise when the customer is asked to pay for taxes and duties by the shipping carrier upon delivery. Research indicates that 70 percent of cross-border shoppers prefer to pay for all fees at checkout rather than be presented with a bill on their doorstep.
Consumers across the globe have unique payment preferences that brands should accommodate to improve sales conversion. Cart abandonment increases by 8 percent when customers can’t use their preferred payment method at checkout. Be sure to research the most popular forms of payment in each country and display those to the customer. In the U.S., for example, credit cards reign supreme, while cash-on-delivery is popular in China and Japan. Alternative methods of payment are also popular, such as WeChat Pay, AliPay, UnionPay in China and Klarna in Europe.
3. Shipping and Logistics
When the sale has been made and it’s time to ship the product to the customer, delivery is another aspect of the customer experience that requires careful consideration. While order fulfillment and shipping domestically has likely had a few bumps in the road, shipping internationally is a new adventure. Before launching cross-border, brands need to evaluate their fulfillment processes and shipping options to ensure a seamless delivery to the end consumer.
At checkout, brands should think carefully about how to display tiered shipping options with their corresponding costs. By including choices such as express, one-day and two-day delivery in addition to standard or expedited shipping service levels, brands can offer customers the choice between speed or saving money.
In order to reduce shipping costs and failed deliveries, brands should implement global address validation to make certain that the address the customer provides is in the correct local format for the warehouse and global carriers. For example, while a U.S. home address may display a street number, city, state and ZIP code, the United Arab Emirates only ships to P.O. boxes because there are no postal codes. Taking the extra time to do the research and implementing global address validation can ensure on-time and error-free deliveries.
Optimizing Cross-Border Conversion Around the Clock
When lifestyle watch brand MVMT launched its e-commerce business internationally with Flow, the company was able to seamlessly avoid these common pitfalls, Prior to using Flow, MVMT's customer experience was lacking. Customers were manually converting prices to their local currency, calculating their own taxes and duties, and order fulfillment was taking three weeks.
By leveraging Flow to improve its website, checkout and fulfillment, MVMT saved 20 percent on payment processing, 30 percent on shipping costs, and captured over $20 million in international revenue spanning over 200 countries.
Launching a brand into international markets may seem daunting, but by taking proactive steps to focus on the end user’s experience and making shopping as convenient as possible, brands can significantly grow their cross-border presence.
Rob Keve is the co-founder and CEO of Flow, a global cross border e-commerce platform that enables brands and retailers to sell their products to customers internationally by creating a localized shopping experience. For more information, visit www.flow.io/.
Related story: A Look Into Charles & Colvard's Global Strategy