Anthropologie Scoops Up International Shoppers Using E4X’s FiftyOne Platform

Opening up your Website to international shoppers is no small task.

Take, for example, high-end casual clothing, gifts and home décor merchant Anthropologie. Up until November 2007 the company, which is run by Urban Outfitters, was shipping its products to Canada using what Michael Robinson, managing director of Anthropologie Direct, calls “a casual approach.”

“We were shipping to them as if they were regular U.S.-based customers – and then leaving the wonderful surprise of customs and duty and taxes up to the customer when the package showed up at their door,” Robinson explains. Anthropologie received some complaints about that – in fact some customers were actually refusing the parcel when it showed up at their door. “So that wasn’t working out for very well for us.”

Robinson says for about four years Anthropologie had been looking for an alternative means to expand its business to customers in Canada, as well as to Europe, but found the process too complex and time consuming to tackle.

For a brief while the company had an arrangement with United Parcel Service, in which UPS would ship packages to customers in Canada for a fixed rate that was intended to cover charges for last-mile shipping, customs, duty, taxes and other fees. But that didn’t work out very well because, as Robinson explains, “it wasn’t as fixed as we originally thought.”

“When we looked at the actual cost of it, we thought we were being charged something like $25, which we thought was reasonable — but then the actual charges turned out to be something more like $60,” he says. So the company was losing money on that deal.

Then in late 2007 the management at Anthropologie discovered E4X, a provider of cross-border international e-commerce systems and shipping. With E4X’s FiftyOne international e-commerce platform, the company was able to launch international shipping on its Website and expand the business to customers in both Canada and Europe.

Today, customers in Canada and in more than 30 European countries can shop on Anthropologie’s Website with the same ease that U.S. customers do. That’s because the FiftyOne platform lets international shoppers see all pricing (including shipping) in their country’s own currency — with all duties, customs, taxes and other fees factored in — on an automated basis.

The managed service, which is delivered via the Internet, automatically calculates the exchange rate and provides international shoppers with prices site-wide in their preferred currency, plus international payment options and international return policies, on Anthropologie’s Website.

The merchant doesn’t have to develop a whole new Website or customize pages within its existing site. The FiftyOne system uses data from the merchant’s e-commerce site combined with user geo-location data and international exchange indexes to render proper pricing each time an international visitor comes to the Website.

“If you think of a front office/back office combination for a retailer, basically our technology plugs into the front office, into the Website, and helps extend it to be internationally friendly,” explains Kris Green, chief marketing officer for E4X. “So if a Canadian or European arrives at Athropologie.com, our technology automatically detects where they’re coming from, and supplies currency exchange rates to the Anthropologie computing environment that are applied session-wide.

“The idea here is not to have to create new infrastructure,” Green adds. “Anthropologie has already made a substantial investment in its existing site – so now the question is, ‘how do we extend that to be more internationally friendly?’”

The service also allows merchants to filter certain products or product categories from their Websites which are either prohibited in certain countries or simply aren’t economical to ship — such as heavy furniture. This way, international shoppers see only the products which can be shipped to them.

Robinson says the value for Anthropologie in outsourcing its international currency exchange and e-commerce operations was that the merchant could “reduce the risk and the complexity — so we could focus on what we really do best, which is product and marketing.” Although he couldn’t provide hard numbers, he says the company has already scooped up significant sales from Europe and Canada since the system was implemented one year ago.

“In looking at the process of going international, there’s such great complexity to it,” Robinson says. “Not just in terms of customs and duty and making sure you have all the correct harmonized codes, and that you understand all the appropriate tariffs, but also how you go about delivering to those countries, and all the different currencies and payment options that exist. So there’s a significant amount of risk involved in preparing.”

E4X partners with Pitney Bowes for the logistics piece of the FiftyOne service. Once an order is made on the Website, Anthropologie fulfills that order and ships it, using its existing carriers, to E4X’s distribution center in New Jersey, which is managed by Pitney Bowes. From there Pitney Bowes and its partner carriers handle all customs, forwarding and end-delivery.

All pricing is based on a per-order model, which means merchants only pay for the service on a transaction-by-transaction basis. Implementation of the managed service requires integration with front office/back office systems. Exchange rates are updated every 24 hours via the Interbank exchange rate index.

“The benefit to the consumer is the confidence aspect – knowing at order time that ‘this is the exact amount I’ll see on my credit card,’” Green explains. “This has allowed Anthropologie to open up its doors to 34 new countries and to 500 million new consumers without investing in any new infrastructure. Now they can step back and focus on what their next international move will be – whether it’s a marketing focus on one country – or developing translated content – they can make those decision now based on the incoming business, rather than on bets and speculation.”

So what has Anthropologie been doing to promote its brand in these new markets?

“We’re taking a slow and easy approach to the rollout,” Robinson explains, adding that Anthropologie is one of those rare brands that has seen great success with little marketing or advertising. “We’re not making a huge marketing effort right now – mostly what we’re doing is PR and some things on the search side of things.”

“We’re still looking at our strategy overall and deciding where we want to place emphasis,” he adds. “Clearly Canada and the U.K. and the other English-speaking countries are our strongest markets, but we’re also seeing some results in Germany, the Netherlands and France.”

Robinson says Anthropologie plans to launch in other new markets, but in order to do that it is going to have to “take the next step and translate our Website into other languages” (something which FiftyOne does not do – that is up to the merchant to take care of).

Robinson adds that as each market develops for the company, “we might adapt the product offerings slightly to better meet that market.”

“But it wouldn’t be substantial, because then we’d end up starting a new brand within that market,” he says. “And then, the way the world is now, the customer might get confused, if they move from one country to another: If someone is, for example, living in the U.S. but vacationing in the UK, and they have a totally different experience – if we became all apparel in one country or all home in another country – it would totally change the experience.”

Research shows that roughly 80% of the world’s Internet users live outside of the U.S. — and more than 55% of online purchases originate beyond U.S. borders. The FiftyOne solution currently services buyers transacting in 34 countries, including Canada, UK, Germany, and France, with guaranteed pricing in CAD, EUR and GBP.

Green says E4X will be expanding its service to include more countries, payment options and currencies in the future.

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