The acquisition will add more than 300 products to L’Oreal’s lineup.
International waters can be rough but vendor services can toss a lifeline to e-retailers seeking to sell abroad.
One of the beauties of e-commerce is that an online retailer can reach consumers all over the world. But that beauty can also be a beast.
Selling to those potential customers isn`t easy. Just because an online merchant can reach shoppers around the globe doesn`t mean it can speak their languages, understand their cultures and regulations, or find a way to ship them goods in a timely and cost-effective manner.
More retailers are giving foreign sales a try. A 2008 survey of 100 larger online merchants by retailing consultancy The E-tailing Group found that 34% shipped to countries beyond the popular Canada and Japan. That`s up from 28% in 2007.
The good news for e-retailers is that a growing number of vendors have emerged that can help with such tricky issues as web site translation, fulfillment and regulatory issues. There are still significant barriers, but they can be surmounted by e-retailers with the right kind of business and the willingness to invest in learning the ins and outs of foreign sales.
A virtual handshake
Adrian Salamunovic, co-founder of DNA 11, has the right kind of business in that he sells a unique product: custom-made Andy Warhol-esque art created from consumers` DNA, which the retailer collects through a kit it sends the consumer. That has attracted interest from consumers all over the world, and Salamunovic quickly learned that foreign consumers are looking for e-retailers they can trust. He reaches out to them with what he calls a virtual handshake.
"The first thing international customers want to know is, `Will you ship to my country?`" Salamunovic says. "Our first step was to make sure they knew we did."
And so the retailer, which launched in 2005 and has annual sales of less than $5 million, began using a service from MotionPoint Corp. that determines from an IP address where the consumer is coming from.
The system, implemented in the fall of 2007, automatically translates prices into the currency of the visitor`s country, and posts a country flag on the home page. DNA 11 started small, by recognizing visitors from Canada, the U.K., the U.S., the European Union and Australia. The price to add the flags and currencies was only around $2,000, and results came quickly, Salamunovic says. Orders from Australia alone jumped 400% soon after DNA 11 began welcoming Aussies with their flag and offering free shipping.
With the initial test a success, DNA 11 stepped up its global efforts last summer. It used MotionPoint to help create Spanish, French and German versions of its sites, and to create sites for 48 countries in those languages and English.
Each site displays the flag of the country and employs its currency, and each has its own template that DNA 11 staff can change. That way, if the retailer wants to offer free shipping in one country, it can add that to the country`s home page. Or, if the retailer is mentioned in an article in the German version of Cosmopolitan magazine it can add a link to the article on the German site. DNA 11 hosts the English web site, while MotionPoint hosts the foreign-language retail web sites, Salamunovic says.
Reduced bounce rates
Speaking to consumers in their own languages has made a difference, reducing the frequency of consumers leaving after just viewing one page of a site. Bounce rates for visitors from French-, Spanish- and German-speaking countries were about 70% when DNA 11 offered only an English-language site. That rate has now dropped to below 50%, Salamunovic says. And, he says DNA 11 is now receiving steady orders from Germany and Spain, which previously generated few orders. About 40% of all the retailer`s orders now come from outside North America.
Rolling out all 48 sites and adding languages cost well under $30,000 and took about three months of planning and another three months to execute. Salamunovic says translation was the biggest challenge.
"Once the languages were done, it was nearly as easy to target 10 countries as it was to target 48," he says.
While DNA 11`s method of branching out was a great way for it to dip its toes in international waters, Salamunovic has run into some cross-border conflicts, in particular, with international forms of payment. DNA 11`s payment processing package does not accept some forms of payment such as Diners Club and Maestro, a MasterCard-branded debit card that is popular in the U.K. and Europe. DNA 11 is now considering switching to a processor with a more global reach.
Local payment preference is one reason retailers serious about going global should consider putting staff, or at least vendor partners, on the ground in the regions they target, says Jeffrey Max, CEO of Venda Inc., which has developed international e-commerce sites for such retailers as Urban Outfitters, DeBeers, and Crabtree and Evelyn.
For instance, Max says around 60% of online shoppers in Germany use a payment method called ELV, which is similar to direct debit. Staff on the ground in the region would know this, but someone operating out of Florida might not.
"You can put a German flag on your site and price in euros, but if you really want to target the German consumer, you need a site that is based in the region, that takes German payment methods, and that integrates with the Deutsche Post," Max says.
Cutting through red tape
Understanding local customs, rules and regulations is also key. For example, Max says, retailers in small European countries routinely offer next-day delivery, so using that sales tactic won`t be as effective as it is in the U.S.
E-commerce rules and regulations also vary by country, Max says. In the European Union, for instance, there are stricter laws regarding making web sites accessible for the handicapped. In many countries, most text on retail web sites has to work with devices that read text aloud for vision-impaired shoppers. Often these devices can`t read text embedded in Flash images, so if a retailer creates a site with abundant Flash it might not comply with regulations, Max says.