June 15, 2010, 4:50 PM

Keep nation building local

Mark Brohan

Research Director

Want to conquer the world as an online retailer? The best way to start is one country at a time just like The Estee Lauder Cos. Inc., No. 133 in the Internet Retailer Top 500 Guide. Last week at the Internet Retailer Conference & Exhibition in Chicago I heard Estee Lauder Online president Dennis McEniry deliver one of the best talks yet on how to build an effective international e-commerce operation.

Feel like doing your own e-commerce nation building? Follow Estee Lauder’s lead and start by cutting your teeth, making your mistakes and develop winning strategies in just one carefully chosen country. In Estee Lauder’s case,  the destination was the United Kingdom and that’s been the business model they’ve used to extend their international e-commerce base over many years and many refinements  to more than 200 web sites in 40 countries. Want to win over the locals? You do that by taking the time and making the extra effort to make each international e-commerce destination a local shopping site. In overseas web retailing, one size won’t fit all, McEniry said. Consumer needs, regulatory issues, merchandise selection and pricing are all different. For example, in the U.S. consumers purchase Estee Lauder products online entirely by credit card but in Germany 60% of Estee Lauder’s web shoppers use a “promise to pay” service and in China 30% of the cosmetic maker’s online customers pay at the local post office.

The easy way for an online retailer to add on international e-commerce is by simply opening up the shopping cart to foreign transactions and hope that FedEx or UPS has a delivery hub in Timbuktu. That’s a short cut to getting going in international e-commerce, but you can also most likely count up on one hand your annual number of foreign transactions. Estee Lauder learned early on that all content has to be posted in the language of that country and that products must be customized for each individual market. In the U.S., most consumers shop EsteeLauder.com for fragrances, but in Asia shoppers in many countries shop online mainly for skin care products.

No matter what the size of the operation, any successful foray into online retailing overseas begins with a successful execution of payment and delivery, McEniry said. He closed his talk with a piece of age-old retail advice: know your customer. The main takeaway for how you, too, can one day rule the world of overseas web retailing is this: In each country first get to know who your customers are and how they like to shop. Next serve them up an online shopping experience that exceeds their expectations. That’s the best ticket to ride. The rest will take care of itself.  

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