This guide is designed to help retailers and brands understand some of the considerations around eCommerce internationalisation and the various opportunities in different areas.
Almost every business wants to create grow online revenue, acquire more customers and, ultimately, be more profitable (selling direct to consumers). There are a wide range of well-established ways of doing this - launching new product, take more market share in your existing markets or expand your operations to new markets altogether. Which of these to do is a question we won’t consider today; suffice it to say that it’s something that needs to be considered at all levels of the business and something that everyone needs to be aligned on.
This article is going to focus on the opportunities presented by internationalising a business, primarily from an e-commerce and digital marketing perspective. However, as these two streams impact so much on other business functions, we’ll also touch on operations and customer service, but not on the legal aspects of trading in overseas territories.
There are actually two levels of internationalisation that should be considered - firstly, setting up your business so you can market and sell your products and services in an overseas territory, and then localising your activities so it better reflects the trading circumstances in the new market. As a concrete example, you might internationalise your business by accepting dollars and euros on your site; you might then proceed to localise it by setting up a website for a German specific audience, highlighting your returns capabilities and integrating payment methods like Klarna invoicing or SOFORT.
The first step takes your business and makes it accessible to customers already wanting to shop from you - useful for meeting existing demand - and the second takes your business and makes it something that customers want to use - vital for creating new demand. Both are important steps, especially because the financial and headcount investment necessary to properly localise is quite high and taking the more basic steps to internationalise is a good way of testing a market.
From an e-commerce perspective, there are a few signs to look out for
Orders or attempted orders from markets you are not actively marketing in
Customer service contacts from people asking when you are going to start selling in their country
Increase in search volume for your brand or product names
Social media discussion
These should be treated as leading indicators - but their absence doesn’t necessarily mean a market isn’t right for you. It’s worth going through a normal market investigation process before you make any decisions, considering the demand for the product you sell, the competition and their price points, and whether you will be able to compete in terms of service as well as in pure product turns. It’s also worth evaluating whether your business will be able to cope with the extra stress on it - it’s long been said that businesses die by trying to swallow too much, not too little. You should consider the preparedness of:
Your customer service team; not just in terms of new contacts in different languages but the increase in volume and potentially at times outside your normal operating hours.
Your fulfilment and return paths; these take a little time to set up but need to work from the start. A customer in a new market is the same as one that’s been with you for years - experience matters.
Your product supply chains; if you are going to be selling an increased amount of stock, you need to be able to meet that demand.
Your finance team; tax regulations and currency exchange introduce a lot of new complexity into a business and while it might not have too much impact at a small scale, it’s important to have a plan in case of success as well as failure.
It’s worth working through the data and weighing up international expansion versus your other options. As many businesses have shown, it’s very possible to succeed, but you do need everyone to be working in the same direction to achieve it.
Going forward, we’ll assume that you have made a decision to internationalise and that the various business departments are working on their own solutions. The first steps are the simple ones - making sure you can take money and information from your new customers and communicate expectations of delivery. If you are not choosing to take payment in new currencies at this point, this is primarily focused on the checkout funnel, ensuring that your form fields can take addresses and zip codes in different formats without triggering an error. You may also need to update how you calculate and display sales tax. Shipping costs are a bit of a balance that you may need to test - you want to avoid being uncompetitive with the established market, but additionally you do not want to undercut your profitability with every sale. Here you are trying to balance revenue and costs in order to maximise margin. If you are using a platform such as Shopify Plus or Magento you may well find that you are able to do this fairly easily by configuration rather than requiring much in the way of development. Both platforms support multi-currency - which is easy to setup - and setting up local stores is also relatively straightforward (quicker with Shopify Plus, but more feature-rich with Magento).
From there, as you look to localise, it’s a case of working your way through the website. The most obvious step is adding local currencies and translations. If you are bringing on board resource to localise your marketing execution (see below) then you can task them to do these two things in parallel. With product pages, it makes sense to work through them in order of expected sales importance. If you have a catalogue that refreshes regularly, you can simply translate new products as they come online and let old products drop off when they go out of stock. Most businesses are a mix, so combining the two approaches is generally best. At this point, you can start to localise more of the website features, such as personalisation, recommended products and merchandising. Product pages can be a bit trickier when it comes to local sizing conventions - Europe, UK and US all use different sizing metrics for clothing, shoes, volume, weight and a number of other things. Your PIM (Product Information Management) tool may or may not be able to handle this, but only if you are able to get the right data to input. If you are selling your own products this can be more straightforward, but your mileage may vary with third party suppliers. It is worth doing, however, and is a key part of preventing international returns from eating into your profit margin. This is a large undertaking and can occupy a business for a number of years - it’s frequently worthwhile bringing in resource to manage the process so it doesn’t impact on day to day trading in your core markets.
As well as bringing your sales channel to a new territory, you need a way of attracting new customers. The ubiquity of Google Shopping has made this much easier; a translated feed can be generated off the back of your products as you localise them, and Google helps with currency conversion. If you are selling through eBay or Amazon Marketplace then you have a similar head start. However, you will need more than just the lower funnel media channels in order to create sustainable growth; sooner or later you will want to commit spend to awareness and consideration generation activities, potentially using digital channels such as Facebook, Instagram, YouTube or display networks. At this point, you have a decision to make on how you want your brand to be seen. Coke and Nike are Coke and Nike all around the world - they use simple, broad advertising that is easily recognisable wherever you go. You may well not have the budget to do this, so you may choose to go for an approach that is a simple translation of your current activities or potentially one that takes your brand and gives it local focus. In all of these cases, if you have a Marketing or Bid Management Platform in place, you will be much better positioned to compare performance cross territory, to quickly increase budgets in desired categories and to automatically generate new campaigns. This again is a good time to bring in external resource in order to accelerate one-off marketing tasks like account set up and structure, initial bid levels and reporting decks. However you decide to go about it, it is worth taking time to consider a bespoke marketing strategy for each territory. What you are trying to achieve in a new territory is likely going to be very different to your goals in your core markets and so the tools and resources you use to achieve them will be correspondingly different. This will result in a localised marketing calendar that corresponds to the relevant marketing goals and local trading opportunities that may not exist in your core market; for example, Golden Week in Japan. Where many businesses run into trouble with internationalisation is falling into it. Overall, it’s a fairly complex process, touching on all aspects of a business, but with proper co-ordination and planning you can make a great success of it and add business changing revenue streams.