The e-retailer reports a $126 million net loss, stemming from a $640 million year-over-year increase in spending in the quarter on technology and content ...
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"Localization extends even to the look and feel of the web site," Bense says. "In China home pages are packed with much more information than home pages in Europe, which have a clear structure and less information on the landing page. Prices can also vary by country, so using a standard price can put a retailer at a competitive disadvantage in some countries. It is always to a retailer's advantage to localize their web site as much as possible."
Because consumer product preferences will vary by country, understanding consumer buying habits is a critical element of localization strategies. For retailers, that means tracking the pages and products viewed on a per-country basis and using that information to adjust their best sellers or heavily promoted products accordingly.
"U.S. retailers use the same strategy at home, so overlaying this data on their product catalog is not a big leap," says BorderJump's Frank. "Retailers also need to be aware of products that are not readily available in a certain country, but are in high demand, so that they can market them hard."
Tailoring a product catalog to a specific country also means weeding out items that local governments prohibit from being imported, as well as items the U.S. government doesn't allow to be exported. For example, gambling devices cannot be imported into many Middle Eastern countries. Nor can cosmetics be shipped to Russia or food products to Australia.
"Import restrictions can be set according to religious, consumer safety, environmental and security concerns," says Bongo's Turnbull. "In the U.S., the Commerce Department's Export Administration Regulations provide controls due to concerns ranging from national security to crime control. Retailers are required to screen their products to ensure they don't violate U.S. export laws."
Just as proper translation and tailoring product selection to consumer preferences are essential to a retailer's success globally, so too is building a brand identity around the world. With only a handful of truly global brands in e-commerce, such as Amazon.com and Nike, it's not enough for most retailers to rely on traditional online marketing channels to build a global brand identity. Instead, they must also use local offline marketing channels, such as print advertising and direct mail.
Taking the time to learn which offline marketing channels most effectively reach consumers goes a long way toward building brand awareness. "Retailers entering a new country need to think of their brands as a new entity with which consumers are unfamiliar and create multichannel brand awareness strategies in advance of their entry to the market," Frank says. "In South America we have found good success with in-store point-of-purchase ads for our clients."
BorderJump provides international marketing services, real-time landed cost calculation, global shipping and logistics, customs clearance, international payment processing, foreign exchange management, fraud protection and export compliance.
When building a brand identity, retailers must remember that no single marketing campaign will play effectively in every country. In China, for example, fashion shows sponsored by apparel retailers help build brand awareness and drive web site traffic. In Switzerland, personalized mailings work well, Bense says.
By creating brand awareness through offline marketing, retailers can drive consumers to search engines to find out more about a brand. Those search queries can lead more traffic to a retailer's home page or landing pages. "It is recommended to use a mixture of offline and online marketing to build brand awareness and drive site traffic," Bense adds.
Bongo suggests that retailers structure their search engine optimization, pay-per-click, display and social strategies by language, as opposed to by country. Marketplace initiatives, such as selling on Amazon.com, and advertising initiatives typically will be more successful if retailers keep them focused to a country or region, Turnbull says.
Duty is rarely free
While getting an international shopper to the checkout page is a necessary part of making a sale, a retailer still has a lot of work to do once the shopper arrives there. One of the biggest obstacles to completing an international sale is accurately calculating the customs duty that must be paid on the items a consumer is buying.
Consumers don't like surprises when it comes to duty. Improperly calculating duty at checkout will result in the customer paying the balance due upon delivery of the item, which can irritate her to the point she refuses delivery. When delivery is refused the retailer not only has to eat the cost of return shipping and refunding the customer's money, it also loses a sale. Not calculating duty at checkout also could prompt a customer to abandon her shopping cart.
"A large percentage of international returns are because of unexpected duty charges at the time of delivery," Bense says. "Providing clear, accurate information on the amount of duty and other taxes to be paid at the time of checkout prevents that problem."
Headquartered in Hamburg, Germany, the Hermes group consists of 12 multinational companies that provide sourcing, transport logistics, fulfillment and distribution of consumer goods. Services also include web site design and payment processing. The company operates more than 16,500 Hermes ParcelShops across Europe where online shoppers can arrange to pick up their packages and drop them off to be returned to the retailer. The parcel shops are located near residential areas and along typical commuter travel routes, and are open well into the evening.
While accurately calculating duty at checkout helps facilitate successful sales, so too can catering to local payment preferences. Many cross-border shoppers prefer to pay with these alternative payment solutions as they are more familiar to them and more likely to be what they have in their wallets.
In Russia, for example, cash on delivery is a popular payment method. In China, Alipay is widely used. Alipay is an online payment platform created by online marketplace Alibaba.com. Consumers fund their accounts using a debit or credit card, a money wire transfer or online transfer from their bank account.