Global expansion: The (multi) million-dollar question

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A panel of global e-commerce experts provided some fascinating insights this afternoon on what retailers should consider before going global. Here were a few takeaways:

Making the Decision

  • When trying to decide if you should expand, talk to your customers. Are they aware of your brand? Do they understand it? Are they advocates? Try to determine if there is enough of a global base to build upon.
  • Take a close look at web analytics to determine how many people are coming to your website from other countries. Realize that, as a company, you are likely not monetizing any of that traffic. Make strategic decisions on how to leverage the people who are already coming to your website.
  • Get good counsel. Legal fees are often massive, the panelists agreed, but it is imperative that retailers prepare themselves ahead of time for what they can and cannot do legally.
  • Be realistic. The decision to go into an international market may take a long time to pay off. As Jim Okamura from J.C. Williams Group summarized, “this is not for the faint of heart.”

Planning

  • While it’s possible to push the button and begin shipping to other countries virtually overnight, a more structured approach generally takes about four to six months to implement.
  • Plan for a different set of customer expectations. Jake Bailey from Overstock.com mentioned that customers in the UK were accustomed to having sales taxes included in the price of the item instead of having it added in when the sale was complete. (The company didn’t realize this until customers started complaining.) He suggested that companies make sure their systems are flexible enough to tailor components by geography or country.
  • Product descriptions and marketing messages do not always translate well. After the information is translated, have someone from inside the company double-check the language to make sure it’s saying what you mean.
  • Don’t forget about expatriates or military personnel who may live abroad. Many of them will buy and ship to their families in the US, or their families will want to buy and ship to them. Those groups could be a powerful ally in expansion.
  • Consider creating an FAQ section where international inquiries will be routed. Also consider having a specific customer service number and email address for international customers to contact.
  • Germany was mentioned several times as a country that is difficult to crack. Norway and Brazil were also mentioned.

Execution

  • Realize that, for some potential customers, you’re just another start-up. While customers in Canada knew of Overstock.com, said Bailey, customers in Germany and France had never heard of the company. Keep that in mind in all communication, and take time to teach a customer your brand.
  • In all cases, under-promise and over-deliver, especially when it comes to shipping. If you can deliver the merchandise within a week, customers will likely be satisfied.
  • If you run into a problem you don’t know how to fix, go straight to the source. Michael Ross, who worked on global expansion of UK retailer FigLeaves.com, found that contacting customers to ask for assistance with shipping or for other insights was “cheaper, more accurate and more useful than lawyers.”
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