Many U.S. Brands Have Global Appeal

global ecommerceWith a population of around 318 million, and with online retail sales smashing through the $300 billion mark for the first time in 2014, it is easy to see why U.S. online retailers have not felt the need to explore further afield.

For five years in a row ecommerce sales growth in the U.S. has been close to 15%, so why would they need to entice foreign consumers with their wares? Combined with fears of fraud risk, logistics challenges, language issues and the need for currency conversion it is easy to see why U.S. online retailers have been hesitant to go global.

However, despite the potential issues the opportunities are difficult to ignore. In Europe alone 564 million people use the internet, and 331 million of those frequently shop online, compared to 196 million in North America.

There is no doubt that many U.S. brands have global appeal. No longer do communications circulate within the confines of countries. Today popular culture is global and, as such, many U.S. brands have achieved exceptional recognition around the globe. However, it pays to remember that despite the rise of global culture everyone across the world does not necessarily share the same tastes and values. Localization is crucial to successfully tapping into local demand; from tailoring the range through to ensuring that delivery and payment methods meet local requirements.

For example, whilst credit card payment is popular throughout Europe there are some local nuances. In Germany the most preferred online payment method is ELV (short for Elektronisches Lastschriftverfahren) an electronic direct debit payment method that’s supported by banks. In the Netherlands a similar method is the favoured option; iDeal, also a payment method supported by the majority of local banks. If you don’t offer these options, then customers from these countries are not just likely to abandon their basket they are also likely to feel quite frustrated and file you in the ‘don’t bother’ category.

In terms of delivery options, click and collect is incredibly popular in the UK with 63 per cent of online shoppers having used this method in 2014/2015, and its popularity shows no signs of slowing. In France the majority of French consumers rate free delivery very highly. Understanding these local nuances really can make the difference between success and failure of an international strategy.

An often cited case study, ASOS, is the UK’s largest online fashion store that delivers to over 240 countries worldwide. It operates from its central distribution hub in the UK but has developed websites (and stock lists) that are tailored for particular markets. This is because it recognises the importance of local tailoring. It might be a simple example but illustrates a point many international retailers fail to consider – the different seasons around the world, and the impact that this has on the items consumers are looking to buy should be considered.

Whilst Florida in the spring is likely to be enjoying balmy temperatures in the 70s and 80s, the UK is likely to be experiencing temperatures in the mid-40s; beachwear is probably not a priority for most shoppers in that region. So understanding what your consumer is likely to want to purchase, combined with a knowledge of how and when they want it delivered is vital to international success.

We also often think of ecommerce strategies as either domestic or international. In our minds this creates the perception that there are essentially two options. However, the reality is ‘international’ doesn’t simply mean one market. It means tens, if not hundreds, of countries each with their own laws, regulations and tax and duty criteria. We tend to think of the internet, and therefore ecommerce, as a virtual space which has no geographical boundaries.

Whilst the consumer is free to browse from one country’s shopping options to the next, the movement of tangible products still requires country laws to be abided by. Therefore, each and every country retailers choose to ship to have to be managed on an individual basis. Very few retailers have the in-house expertise or resource to be able to manage this.

And, unfortunately, there has been a distinct lack of logistics partners who can help navigate the complex process and provide a service which goes far beyond just delivery. To date international delivery has been provided by a combination of postal services, international express carriers and local delivery solutions. The stark truth is none of these offer a total end-to-end solution which has been designed with ecommerce in mind. As a result, many retailers have found international ecommerce a considerable headache.

However, with the right partner these and other frequently cited challenges can be easily overcome and, as mentioned, the opportunities are well worth the effort. It is not just Europe that offers potential for U.S. retailers, the emerging markets are potentially very exciting. Brazil, for example, has ecommerce rates that rank alongside China’s as well as high average online spend rates.

So the moral of the story is…don’t be afraid to look outside of your market…just do it with someone who knows how the land lies.

Hendrik Kummeling is International Managing Director of wnDirect.

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