5 Things to Consider Prior to International Ecommerce Expansion March 12th, 2015 Randy Kohl, Gorilla Group Randy Kohl, Gorilla Group Randy Kohl, Gorilla Group Author BioRandy Kohl is Director of Content Strategy at Gorilla Group, an award-winning digital commerce agency. Randy works with B2B and consumer brands in a variety of industries to devise and implement strategies that engage customers across digital channels and drive growth. This has led to contributions to 5 webby awards. Randy has been cited and quoted by Forrester Research, is a featured contributor to The Future of Customer Engagement & Commerce, a past contributor to Internet Retailer magazine, and guest lecturer at Northwestern University's Kellogg Graduate School of Management. Read More About Randy Randy Kohl, Gorilla Group Taking the ecommerce channel international is a logical next step for many brands and retailers looking to drive growth. But that “step” is actually a multi-part process fraught with risk and numerous challenges to overcome. Here are five things to consider when embarking on this journey: Macro & Micro-Economic Factors In business, timing is everything, and international ecommerce expansion is no exception. Global and country-specific economic factors should inform not only if you should venture out internationally but when. The profitability of exports functions inversely to the strength of the dollar against other currencies, so the timing of any international launch can be a major consideration. Once live, you’ll be in this for the long haul, but it’s always preferable to start from a position of strength. You’ll also want to make a business case on a country-by-country basis. Many things can influence these decisions. For instance, around 60% of shoppers in China and India, two of the fastest-growing ecommerce markets, rely on cash-on-delivery (COD) as their default payment option.1 Are you prepared to accommodate this? If not, expansion there may not be profitable, as you’ll sacrifice over half of the potential customer base. In Brazil, duties on imported goods can in many cases more than double the cost of a product. Is demand for your product(s) strong enough for consumers to justify the cost? The right amount of due diligence in this area can save innumerable headaches down the road. Platform & Design Considerations Determine whether your current ecommerce platform is able to adequately support international expansion. Running multiple sites from a single instance is far more efficient and sustainable than trying to manage multiple platforms, catalogs, and databases. If the underlying platform isn’t up to the task, that alone could be a deal-breaker. Also, consider how users will be interacting with your site. In the U.S., mobile is fast becoming the dominant digital channel. Across most of the rest of the world, mobile is already the primary, often the only, digital engagement channel. Consider a mobile-first approach to site design and content development to suitably connect with these customers. Make sure page templates can accommodate foreign language translations. For example, French and Spanish in written form average about 20%-25% longer than English. Order Management & Fulfillment Once orders begin coming in, the processing and delivery of shipments begins to impact a program’s long-term success. Using existing U.S. based fulfillment capabilities is the simpler route; however, this adds to both the shipment’s transit time (potentially by weeks) and shipping costs. When using this model, it’s critical to manage customer expectations in order to have any chance of driving repeat purchases. Setting up localized (or regionalized) distribution capabilities will ultimately reduce shipping costs and duration, but this requires a great deal more work up front as you must find a partner to navigate customs, process fulfillment, and reverse logistics for handling returns. There is also the cost of producing and sending products to pre-stock these fulfillment centers, which makes this decision one of the most important in the process. Localization Site localization is a requirement for doing business globally. This encompasses everything from accepting payment in the local currency, which requires an international payment processor, to the structure of the domain URLs, which have local SEO implications. When it comes to translating the site, translation software has come a long way, but there are simply too many usage rules and nuances between languages to rely on these tools at present. Enlist a translation service that uses native speakers in order to present content with the right voice, tone and context. Customer Engagement The need to nurture customers and potential customers is universal, so you’ll want to leverage much of what you’re doing in the U.S. market to target international audiences. However, spam laws vary by country, so you’ll want to verify that your programs are in compliance. Also, make cultural awareness a part of these efforts as you determine everything from the cadence and types of communication you use to the content itself. What might seem innocuous or playful in one country may be considered offensive in another. This may seem like a small and obvious point, but it’s exactly the type of thing that can be overlooked when running a complex multinational ecommerce program. Going international, quite literally, presents a world of opportunity; however, it requires the same level of planning and attention to detail that underlies any successful ecommerce initiative. Treat expansion into each country as a sub-project within a larger internationalization program, and leverage the lessons learned from each launch to inform the next. With this approach, there’s no limit to how far your brand can go. 1Stat aggregated from multiple sources: Ernst & Young, KPMG, China Business Review. To learn more about Gorilla Group, visit their website.