Amazon not only sold $2.5 billion worth of goods, it introduced Prime members to new services. How should rivals compete in 2017?
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Art.com, meanwhile, routinely reviews its payment transaction records to look for unusually high levels of chargebacks from particular countries. If it decides card risk is too high, Art.com will ship orders only after receiving and cashing money orders, Marston says.
At AllPosters, a foreign marketing strategy came to life after the retailer deployed a language-translation tool from SDL Inc. "We had a fairly sizable international business from non-English-speaking countries," Money says. Last October, the retailer began using the SDL application to translate content into French, German and Spanish. The SDL tool recognizes a shopper`s IP address, then translates site content in the native language of the shopper`s country. The shopper has the option to click back to English.
Surprisingly, the translation service itself didn`t have a direct impact on sales, Money says, but it made marketing in local languages possible. "It was purely a foundation with which we could scale up our international business," he says. By populating the site with words in native languages, the translation made it easier to build a marketing program through Internet search and affiliates. "We were able to build a marketing campaign to direct people to our site," he says. "That brought a big lift in sales."
SDL charges a translation fee based on the number of words on a web site and the number of languages, says Terry Lawlor, vice president of worldwide marketing. A large site with a few languages could cost $50,000 to $100,000 to translate, he says.
Online marketing techniques that work in the U.S. tend to work abroad, experts say. "Our primary international marketing is Internet search and affiliate marketing," Marston says. But he notes that Art.com is constantly learning about how demand differs among foreign markets and then figuring out how to apply that knowledge to marketing campaigns. "We have to make sure we`re not doing a one-size-fits-all solution," he says. "Every country has its own customs and flavors. We`d need to know which countries like to decorate with art, and which decorate more with tapestry."
Build or buy
While some retailers handle their international sales mostly through in-house systems, there is an expanding range of outside services to support foreign markets, including stand-alone applications and turnkey platforms. Retailers have the option of patching together commercial applications or going with e-commerce providers like Vcommerce Corp., Comerxia Inc., Canada Post Borderfree and Venda Inc. that offer ranges of services that can include e-commerce platforms, fulfillment, payment processing and currency conversions.
At Art.com, where Marston and Chodniewicz head up a team accustomed to building its own e-commerce systems, outside technology is beginning to play a more important role, Marston says. Last year the retailer deployed a currency translation application from E4X Inc that recognizes the IP address of a visitor and translates the prices showing on Art.com`s pages to the visitor`s local currency. The service hit home with foreign customers, who have shown an increased propensity to buy when they can see localized pricing. "We`ve seen an uptick in our international conversions from where we were a year ago," Marston says. "We`re experiencing twice the sales volume from overseas customers."
Because Art.com sells easily definable and universally recognized products--such as images of international celebrities and art from widely recognized artists--the currency-translation feature alone can bring huge benefits, Marston says. But as it continues to build international sales, Art.com will also consider using technology to localize content for higher-ticket items like limited editions of original art that sell better with lengthy descriptions, he adds. "It can be important to describe these products with some history and culture," he says.
While some retailers prefer to limit their use of outside technology and services, in the process maintaining more control over their operations, others are turning to more outside systems that handle multiple operations and can make it relatively easy to enter new markets.
Ritz Interactive, which operates 15 e-commerce sites but gets most of its foreign sales through RitzCamerca.com, BoatersWorld.com and ShopatShark.com, the online shop for golfer Greg "The Shark" Norman, is handling international sales through Canada Post Borderfree and Comerxia. "Wherever they go, we go, we piggyback on their coattails," says Ritz Interactive CEO Fred Lerner. "If Comerxia goes to a new market tomorrow, we`re automatically there."
Ritz signed up with Comerxia a year ago. At the time, the only market Ritz served outside the U.S. was Canada, for which it still uses order and fulfillment services provided by Canada Post Borderfree. Now with Comerxia, it ships to more than 40 countries, Lerner says.
When international customers place their orders on a Ritz site, checkout and foreign shipment are handled by either Borderfree or Comerxia, which ships to markets throughout the world including South America, Europe, New Zealand and China. When it accepts foreign-market orders, Ritz ships products to the U.S. warehouses of either Borderfree or Comerxia, which handle shipment to the customer`s destination.
A main advantage of going through the third-party services, Lerner adds, is that they figure and present to customers the complete costs of shipping, including taxes and duties. Presenting foreign consumers with the complete cost of delivering packages to their doors is one of the most important steps retailers can take in winning foreign consumers, The Aberdeen Group Inc. notes in its 2005 Global Trade Study.
"We estimate and guarantee the cost of duties and taxes at time of shipping," says Patrick Bartlett, president of Borderfree. "If we underestimate the cost actually paid by the customer, we eat the difference."
Vcommerce also offers a range of international services, letting retail clients choose particular services or going with a turnkey e-commerce system including order management, fulfillment, drop-shipping and call center services. It charges $85,000 to $100,000 for basic services, but $250,000 to $500,000 for its full range of services. In addition to those set-up costs, it charges per transaction fees that range $1.15 to $1.20 for clients with 10,000 to 20,000 transactions per month. The rate declines with higher transaction volumes.
Even more markets