Expanding into cross-border ecommerce is a momentous decision and one that could set your business on a new growth trajectory. It’s also a smart idea in today’s retail environment, given the statistics. eMarketer reports that – following a 25.7% increase in 2020 – global retail ecommerce sales will rise to $4.921 trillion in 2021.
According to the same report, India, Brazil, Russia, and Argentina are projected to post at least 26% growth in retail ecommerce sales this year. There is no slowdown in sight for global ecommerce, so now is the time to seize the moment.
But before launching into a cross-border ecommerce strategy for your business, there are many factors to process. No matter if your business is a Fortune 500 or a small-to-midsize company, you can drive prosperous cross-border growth if you tackle a few areas first. Below is a checklist of the high-priority items for any size business considering cross-border ecommerce.
Software platforms that handle the details of sending your brand into new territories abound. You are likely using technology to automate and/or digitize certain business processes already, so you’re well on your way to leveraging platforms to help you go cross border. Software can streamline many tedious, complicated processes in cross-border ecommerce, such as calculating taxes and duties in real-time, offering local payments, and supporting direct international shipping and logistics. Certain platforms can also help you deliver localized shopping experiences in whichever market your business is selling.
Through cloud-based technologies, you’ll greatly reduce the amount of overhead you’ll need to go global. Cloud platforms designed to take care of cross-border ecommerce can help take the load off when you’re running into shipping complications or trying to localize the online customer shopping experience. What’s more, the right platform will integrate with your ecommerce platform quickly, so you can reduce your time to market and get up and running with global sales.
Templatize Your Approach
Document your steps along the way in your first foray into a new market. Once you have successfully launched in one international market, you will likely use those steps to repeat the process in another. Of course, not every new region will function the same way – far from it in fact – but your strategy can be similar. You should develop a repeatable way to target new buyers, personalize their experiences, and cement your brand in new territory. With a platform that offers A/B testing, you can optimize every part of your customer journey in each market in order to maximize conversion and effectively grow sales.
Refine and Personalize Your Messaging
The messaging you’ve used in your first market won’t necessarily resonate with customers in international ones. Cultural differences from country to country mean you need to invest in research to hone the right message for your target audience. Spend the time to discover the preferences of your new targets, what might delight or offend them, and tailor your message accordingly. And remember to be consistent across your marketing material, website and customer communication.
In general, it’s a best practice to begin with a hefty amount of research into your potential markets to set a strong foundation for your cross-border initiative. With the customer data you collect, you’ll be able to accurately identify where to invest your dollars and which markets will be worth it to enter. All that information will help you ultimately create a personalized message architecture that you can use to target these customers.
Pay Attention to Pricing, Landed Costs, Payments
A pricing strategy for new markets will be a concern anywhere you go. Figure out how you can price your goods to appeal to new customers while staying profitable. How much will the local consumers pay for certain products? Testing price elasticity in each market is important to figure out the local audience’s tolerance for your product pricing. A software solution can offer a/b testing capabilities so that you can see if increasing product prices in certain markets impacts conversion rates. Many retailers leverage modern cross-border technologies to test their pricing to see if small increases on certain products can subsidize free shipping or promotions for those customers.
Taking a step back, it is important to also look at the full landed cost of your products. Can you offer consumers free shipping on every product? It might be possible to offer free shipping in certain markets but not in others. Furthermore, it might make sense to offer free shipping above a threshold in certain markets or offer flat rate shipping in other markets to protect your margins. A software solution can provide online merchants with this level of flexibility and control so that they can make the unit economics work for their business.
Additionally, consider offering a variety of payment options to customers. Consumers in different markets prefer different payment methods. Offering a range of payment options makes the sales process easier and reduces friction between your customer and their purchase – leading to more sales. Remember there are a variety of payments to consider offering for consumers in different markets, from traditional credit cards to alternative payment methods and digital wallets as well as crypto currencies.
Consider Expectations for Shipping Times
Shipping can present one of the greatest challenges to a cross-border ecommerce business, but taking a few preliminary steps can relieve some grief later on. Analyze the shipping preferences of your customers in different markets. Do customers in a certain region have specific expectations for shipping speeds? In some markets consumers might expect free shipping for cross-border items to arrive in 2-3 days whereas in other markets shoppers that window might be longer at 4-6 days. It might be important to offer overnight or guaranteed two-day shipping in some markets, while in other markets that might not be necessary.
And if your business embraces technology, you can automate and streamline all the processes behind cross-border, including direct international shipping so that online shoppers have a seamless experience from browsing and purchase through to order delivery.
Any business can successfully launch a cross-border ecommerce initiative with the right tools. The key is checking off the priority items above and spending the time to craft a smart strategy for global commerce.
Juliana Pereira is VP Marketing at Flow Commerce