Prior to joining Salesforce, I managed the direct-to-consumer (D2C) channels for two fast-growing U.S.-based companies. Through trial and error, I learned a thing or two about international ecommerce. For most businesses, going global can be daunting. There are so many considerations (and pitfalls!) and it’s hard to know what to focus on first. I found it helpful to put together a framework based on experiences launching in various countries and regions.
International expansion will be a key growth driver for brands. According to Statista, the number of people buying products online worldwide will exceed two billion in 2020. And while every business is different, there are several steps every business needs to take to ensure success with their international commerce efforts:
Get targeted: Identify international market potential
Prioritize: Understand the challenges of international ecommerce
Go local: Ecommerce localization strategy by market
Enable payment: Determine payment methods
Go live: Activate and launch
Let’s examine each.
It’s easy to find information about the digital transaction volume in a given country, but those numbers only provide a starting point. When targeting a country to expand into, you must look deeper. How many people live in the country? How stable and deeply penetrated is technology, particularly mobile and logistics infrastructure? What about geopolitical considerations?
It’s also critical to understand the level of brand awareness. If your brand is a relative unknown, factor in the cost, time, and effort of building awareness. When prioritizing which markets to enter, search for consumers abroad who know your brand and capture as many data points as possible. Dig into web tracking data to understand from which countries people browse your site. If you have non-transactional sites in countries being considered for ecommerce, analyze traffic volume and trends, but also check referrers and social media signals in these markets. This crucial exercise will help determine which countries are fertile ground for growth and which will require more resources.
The challenges of expanding your business to any country are varied and many. A U.S. retailer looking to Canada (estimated $43 billion in ecommerce sales in 2019), for example, needs to consider custom, duty, and taxes. Taxes, in particular, can be very complex depending on the retailer’s legal status in certain provinces.
In my experience, it’s more effective to initially target a small number of strategic, high-potential growth countries to focus, and then fill in remaining markets with a verified third-party international fulfillment service that can plug into your own checkout experience. Salesforce Commerce Cloud customers can leverage the AppExchange and Commerce Cloud Partner Marketplace for pre-certified fulfillment partners and faster integrations. The partner you choose should manage all backend fulfillment on your behalf. Partners’ capabilities can and should include payments, fulfillment, duties, customs and tax compliance, and are a low-risk option for testing across many markets simultaneously.
Once you decide there’s a market opportunity, you need to become immersed in something equally as critical — the people you will sell to. Delivering a localized experience goes far beyond site translation into the local language, although even that is nuanced within English-speaking countries. A “sweater” in the U.S. is a “jumper” in the U.K., for example.
Language is the most important consideration for localization — Salesforce has seen that poor translation is the number one hindrance to conversion on foreign sites — but other factors include different address formats and varied checkout preferences.
Usability also plays a big part in a localized experience that resonates with customers. For example, completely separate product photography featuring local models or up-close shots of stitching and labels can confirm authenticity.
Finally, campaigns may need a local makeover too, as some countries start end-of-season sales earlier than others, and weather conditions in different hemispheres trigger the need for different clothing.
Top questions to consider for your localization approach:
What is your approach for campaigns and promotions? Is it one size fits all or country-specific?
What is your product catalog and inventory mix? Is there one central warehouse selling the same products across all targeted countries or are there exclusive products per country?
What is your price strategy? Will the item price be the same across all regions?
Will you have individual teams in the respective countries? What is their size and level of web management skills?
Payment methods need to be tackled locally in most cases. The type, variety, and ease of payments offered on your site are extremely important to converting shoppers and, of course, preferences vary widely by country. For example, consumers in some Asia-Pacific countries value convenience above all else, while those in the Netherlands prize consumer protections. For shoppers in the U.S., Germany, and Japan, speed and convenience are key.
Many consumers in the fast-growing Latin American market use a payment system called DineroMail, in which after making a purchase, shoppers are directed to a DineroMail site to print out a payment slip they then take to an OXXO or 7-Eleven to make payment.
The good news for Salesforce Commerce Cloud customers is that the platform natively supports payment and currency plug-ins from leading providers that make it easy to quickly launch relevant payment providers in the country or region of your choice. Customers can pay in their local currency using their preferred payment method.
Retailers also need to consider capture and settle when it comes to foreign payments. Particularly during the investment phase of your expansion, you can spend money on currency exchange fees if you pay local partners and employees in local currency but settle digital revenue in your home country.
In some countries, complexity is heightened given internet and consumer regulations, and in others, you may face volatile currency. If you are going to price in local currency but want to capitalize in your home market, you need to watch exchange rates very carefully, and may even consider evaluating risks and potential insurance options.
On top of that, you may need to establish a local bank account abroad, so be sure to complete the entire application process as early as possible to ensure all systems are a go when your site is ready to launch.
Our platform allows you to quickly spin up new sites with shortened development time, which allows for the ability to test new markets quickly and without costly overhead.
But retailers may also want to consider leveraging existing vendors and their international expertise. Before contracting with new partners, retailers should see if their existing third-party logistics provider (3PL) has a reliable subsidiary in that country and if, for example, a payment gateway in Europe also supports payments in Latin America. Retailers should run a full assessment with all vendors to determine their capabilities.
Make sure all 3PLs meet local requirements. For example, can your CMS handle European umlauts and consume Asian characters? There are a million little things that can trip up your launch, frustrate your customers and put a dent in your chances to successfully grow your business.
As I discovered in my previous roles, the unique multi-site functionality of Commerce Cloud makes it easy to create and manage local site instances, deploy localized marketing messages and promotions, global content strategies, custom price lists, and more. In addition, check out the pre-certified translations providers in the Commerce Cloud Partner Marketplace to help deploy professional and automated translations directly to your site and marketing efforts.
Hopefully, these five steps will be helpful on your road to international expansion. To learn more ways to jumpstart growth in commerce, check out more tips in this comprehensive guide.