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What are the best ways to optimise for cross-border expansion?

By Will Gillingham

Almost a third (31.4%) of UK orders are delivered to overseas recipients. While economic unrest in the UK has caused the valuation of sterling to become turbulent, it’s also been something of a boon to foreign buyers who have been cashing in on the improved exchange rate.

With a large audience of engaged buyers dwelling across the Channel, the inherent potential of cross-border commerce is seismic. Or, at least, it is for those who know the exact preparations needed to tap into those overseas marketplaces. But just what is it you need to know to expand internationally?

In this article, we’re going to detail every key point which retailers should be weaving into their expansion strategies. To gain a rounded perspective, we approached a host of experts in the sector, who specialise in a range of ecommerce fields, in order to garner an actionable level of constructive insight. Here’s what they had to say.

Question Everything and Fail Fast

Trading in other countries is different to UK trading in almost every respect. Payment options need to be considered, websites need to be localised, and feasible delivery and returns offerings need to be implemented (we’ll cover each of these in detail below). It’s a game of questioning every aspect of the business, including (or perhaps especially) those which are taken for granted in the UK.

Scott Lindsay, Head of Digital Marketing at eShopWorld, elaborates: ‘Expanding across borders comes down to a simple proposition. How do you drive growth by removing friction from the shopping journey, and allowing consumers to experience and engage with your brand in a way that feels local and familiar to them?

‘This simple proposition is the key to unlocking growth, but masks great complexity when applied to multiple international markets. What price will the local market bear? How do shoppers like that price presented – with duties and taxes included or displayed as a line item? What are the local address formats (important for a good delivery experience)? Do you need to collect ID details? Can shoppers avail of promotions on your site? How do they like to pay? How will you acquire that payment, and manage fraud risk? How can you manage the trade-off between cost and delivery expectations? What will your return policy be, and who will pay for returns? Where will returns be sent?

‘These are some of the key questions that, when solved, can open up access to huge demand, from tribes of shoppers that want to enjoy a direct relationship with their favourite brands.’

However, before delving into the nitty-gritty nuances and cultural dissimilarities of the countries you’re looking to move into, one word needs to be firmly planted as the figurehead of your strategy: agility. The ability to flex and morph your plan to roll with the unforeseen obstacles which rear before you is the keystone in any successful cross-border expansion.

Gavin Masters, Industry Principal at Maginus, explains: ‘The key success factor in cross-border expansion is agility. The ability to fail fast, or to grab an opportunity which arises in a new market is key to being the successful party in any new territory. Unless you have a detailed understanding of your customer base in a potential market, it is unlikely that you have a clear idea of whether it will be a success, and even if it is, whether it will be commercially and operationally feasible. The easiest way to find out (and get supporting information) is to test the concept in the quickest, most cost-effective way possible. A few months of low-key trading in a country with a sub-set of products will give better and more relevant data than anything else could.’

International expansion may well involve a few false starts, and then perhaps the knocking over of a few hurdles along the way, before you’re running smoothly. However, an anticipated problem is a surmountable problem, and if you’re ready to tackle the issues as they rise, then the granular strategising can begin.

Meeting room

Before You Go, Test at Home

Before deciding which territory to establish a presence in, however, there are ways to ensure your brand will be engaged with by the local populace.

David Wise, Director Channel Sales EMEA at Magento, an Adobe company, suggests that rushing overseas and investing in more markets than a brand is equipped to handle are common errors in attempts at cross-border expansion. Instead, brands should turn to their existing data and see which territories (if any) are already expressing an interest in their UK websites, and approach these places first.

Wise: ‘Expanding across foreign markets is a great way to grow a business. However, many retailers tend to launch into cross-border expansion making fatal mistakes: these include a lack of market research and entering too many markets at once.

‘Analysing data from a domestic ecommerce site, to gauge whether there is substantial traffic from any specific country on the current web store, can help businesses identify which market to break into first. As well as this, rather than taking a ‘big bang’ approach, onboarding one country-specific store at a time allows retailers to evaluate localised messages and marketing, determine if customers are enjoying the experience, and make any necessary amendments, before expanding any further.’

Once this data has been analysed and applied to the overseas strategy, and a viable territory for cross-border trade has been identified, optimising to meet that country’s specific requirements can truly begin.

Telephone box

Become Local

Localisation doesn’t mean simply translating the text on your website. It means an immersion with the culture: understanding the vernacular and the cultural sensitivities of the population you’re looking to interact with.

It’s best stated by Alecxa Julia Cristobal of AsiaPay: ‘Your target market’s choices and cultural preferences need to be eminently observed.’ A copy and paste of your business into a new populace won’t find a footing; ‘unlike trading into one location, the “one size fits all” approach might not work’.

In acknowledgement of this, Michelle McSweeney, Content Marketing Manager at Kooomo, discusses those areas which need to be noted: ‘If you want to make a real play for global expansion, you have to be willing not to simply scratch the surface of localisation, but dig deep into all of the cultural nuances and preferences that exist within specific markets – because it could mean the difference between success or failure of your global efforts. Localising your online store goes way beyond translating your web content into multiple languages and having numerous currency options available.

‘Take design, for example. Will the use of specific colours and imagery as well as the overall layout of your online store resonate with customers in Asia or South America the same way that it does in Europe?

‘The same goes for promotions. And delivery options. Different audiences want different things – it’s not even a case of meeting customer demand – it’s a matter of gaining a full understanding of what ‘the norm’ looks like in each country or territory you want to expand into and curating your online offering to fit appropriately.’

Examples of what this cultural immersion should look like are exhibited by Nicola Winters, Head of International at Search Laboratory, who details those areas where it’s easy to trip up, and those areas which are easily overlooked.

Winters: Ensuring that the brand messaging is translated, rather than just the words, is crucial if you are to make a positive impression in your new market. Failing to do so can be embarrassing at best, or offensive at worst – an example of this is KFC who’s ‘finger-lickin’ good’ slogan was translated to ‘eat your fingers off’ in Chinese.

‘While it’s important that the brand messaging is maintained, the USPs may need to be adapted to ensure they are enticing to that particular culture. This also applies to call to actions (CTAs); some cultures respond better to subtle call to actions such as ‘order here’ rather than ‘buy now’.

‘Ensuring that the imagery used is adapted to be culturally appropriate is also important: this could be ensuring that a model’s skin is covered in religious countries, or changing the colours used in countries where the original colour reflects a completely different meaning.

‘Your ecommerce website may need to have technical changes to successfully run in international markets. One key consideration is the address capture; the UK standard form layout may not be appropriate for addresses in different countries. Offering different payment methods may also be necessary. Working with a mother-tongue linguist will make it easier to identify non-content factors that act as a barrier to conversion, ensuring your launch into new markets goes smoothly.’

While the act of becoming local is one which needs to occur across the breadth of the business, one of the vital areas which needs to be given due consideration is the website. As the hub of your brand, and potentially the only interaction a customer may have with you, this is one of your best resources for customer acquisition.

Local grocer

Refine Your Website

It’s an obvious yet critical aspect of cross-border expansion: localising the website. Your understanding of your target market’s culture needs to be reflected in the language and display of your online store, so that a customer feels instantly familiar with your brand rather than awkwardly out of place.

This is stated by Jessica Harding, Online Marketing Coordinator of FACT-Finder: When preparing your business for cross-border expansion, one of the most basic but fundamental steps you should focus on is optimising the website for each country.

‘Tailoring your online presence to provide customers with the information or product they are looking for, translated into their language and localised to their region, will keep them on your site instead of going to competitors.

‘Multichannel configuration can be a lifesaver and allows you to roll out site optimisations and campaigns across borders without having to go through each site one by one. At the same time, it is also necessary to have the flexibility for local ecommerce teams to make changes at the individual level to each site for country-specific promotions, product placement and search optimisation.’

Further to this line of thinking, Akeneo provide a three-step checklist to enable retailers to quickly and effectively rework their websites for cross-border trading.

James Barlow, Regional Sales Manager, Akeneo: ‘1) Speak your customers’ language. The first step to expanding into a new market is making sure that customers in that region can read and understand your product information. Customers expect to be able to do business in their native language, and that means translating product information for a new audience.

2) Localise data. Make sure word choice and spelling will make sense to new customers, adapt images and other multimedia assets to remain relevant and appropriate to buyers, and convert product data, such as clothing size or product measurements, to units that shoppers in this market will understand.

3) Remain compliant with local regulators. Product information and data must also be adapted to comply with any local laws and regulations covering your new market. This is especially true when it comes to packaging, as many countries have unique and specific requirements and regulations governing what can (or cannot) be printed on a product.’

If the website has been constructed to cohere with the expectations of the population you’re looking to reach, then a monumental obstacle has been circumvented. However, as mentioned back in the initial introduction, there are two other key areas which need to be optimised before a success can be made of cross-border expansion: payments and delivery options.

Website

Provide the Payment Options of Choice

The way people like to pay differs radically from country to country. Even European neighbours are fundamentally segmented when it comes to the payment method of choice, and for an ecommerce business to succeed, these preferred payment options need to be front-and-centre at the checkout page.

This is noted by Ralf Gladis, CEO of Computop: ‘If we look at the role of payment in the success of cross-border e-commerce, the key message is: give customers what they want. Look carefully at the payment preferences in each territory and provide the favoured options.’

Joanna Bedward, Commercial Product Manager of Elavon, supports this statement. She says: We have seen a huge increase in cross-border payments on e-commerce, enabled by businesses offering payment in local currency. This vastly increases the customer’s confidence when buying online as they are buying with a currency they know and trust. There are also additional options allowing the customer to browse and shop in their local language.’

And the muse is continued by Chris Andrews, New Business Development at ACI. He says: ‘The checkout experience must, of course, support the local language and currency for each market. But it must also offer the right payment options.

‘This means knowing customer payment preferences in each geography and tailoring the available options on a country-by-country basis. Payment preferences vary more widely than many merchants realise – and they have a big impact on conversion rates. Customers want the familiarity and convenience of paying using their preferred choice of payment method – they trust it and it’s often tied to other benefits the shopper enjoys, such as loyalty schemes or a means of managing their money.

‘Merchants must also understand the risk profile of each new market - and tailor their fraud strategy to balance sales with risk mitigation in each new environment - to support safe business expansion.’

Whether the preferred payment method is by card, or direct debit, a payments organisation such as PayPal, or a homegrown option exclusive to that sole country, the customer needs to be able to buy your products in that way. It’s this easing of the process that will allow for a smooth initiation into a new country, and the ease should be reciprocated by your overseas delivery options.

Money

Prepare to Deliver (and have things returned)

In contrast to payment options, efficient, speedy delivery is a staple of ecommerce that transcends borders. In most locations, customers are going to expect these kinds of services when they purchase, and it’s therefore important to have the right infrastructure established for delivery.

Data provided by Duncan Licence, VP of Global Product at MetaPack, corroborates this: ‘Consumers are definitely going global, with our own research amongst 3500 shoppers in seven countries showing that over the last 12 months, 49% had made between 1 and 5 purchases overseas. Pain points for consumers include expensive and slow delivery - 25% balk at having to pay for delivery at all.

‘It is also crucial to ensure that the returns process on cross-border deliveries is easy and that the speed to refund is fast. Retailers need to be mindful of the cost to them of handling international returns and should aim to provide returns solutions that not only facilitate quality delivery services with direct shipping to the customer and a mix of regional and local carriers to deliver goods quickly, but arrangements that support efficient returns too.

‘The less convoluted, irritating or expensive delivery is, the better it will be received by international shoppers. One final tip: be up front about charges – our research shows that 33% of respondents would cancel their order if additional taxes were applied to goods purchased or shipped from another country.’

Joe Farrell, VP International Operations at PFS, explores potential methods to smooth over the delivery process when first establishing a presence in another territory. He says: Non-traditional fulfilment methods, such as pop-up distribution centres, space on demand, localised warehouses and more, offer the flexibility brands seek at an affordable rate. With these alternative fulfilment methods, brands can rapidly deploy operations and de-leverage fixed costs to reach customers anywhere with quality service.

A positive shopping experience is vital when it comes to building a brand’s reputation. Equally, a negative delivery experience can be extremely damaging to a brand’s reputation and, ultimately, their bottom line. It is crucial that the delivery experience leaves consumers with a positive impression.’

Mohit Paul, SVP EMEA at BluJay Solutions provides further food for thought on the subject of the initial establishment phase.

Paul: ‘In the past few years, companies such as Shyp and UberRush have been the casualties of the race to go global, having overreached and been unable to reach critical mass for their explosive growth strategies. An alternative approach is embracing a collaborative model. By combining resources and expertise across different regions, smaller suppliers are able to ‘test the waters’ in new markets. Without the investment in additional employees, vehicles, and organisational systems, businesses can feel more secure in exploring possible new supply chains.’

And on the subject of returns, Charlotte Monk-Chipman, Marketing Director at ReBOUND Returns, notes how this sometimes-overlooked aspect of retail should be addressed in a cross-border strategy.

She says: ‘When it comes to cross-border expansion, returns are notoriously forgotten about by ecommerce teams. Yet 23% of shoppers believe that a cumbersome return process is a barrier to buying overseas. As such, retailers with a cryptic international returns policy may find themselves falling flat. Simple steps such as being upfront and transparent about a returns policy can settle shopper uncertainty and help frame a favourable returns offering.’

Retailers moving into foreign waters need to enter prepared to compete. If the delivery and returns options are second-best to domestic retailers, then customers are wont to shop with the brands they recognise and trust. However, a thorough understanding of customer delivery expectations could allow for a springboard into trade as soon as you make landfall.

Packages

In Summary

A successful cross-border expansion strategy should feature (but by no means be limited to) six core points: agility, home-testing, cultural understanding, a localised website, personalised payment options, and efficient delivery options. With these six addressed, the path overseas should be solidly paved (if it hasn’t been walked already).  

If you were to cram a successful expansion strategy into a single sentence, it would probably read something like this: immerse yourself in the culture and be ready to adapt. After all, it’s the local customers who will be buying your products, and therefore it’s the local customers who you need to appeal and respond to.

To sign off as we began: there’s a large audience of engaged customers dwelling across the Channel. With the right plan in place, this could become your audience of engaged customers. Good luck!

Will Gillingham, Content Manager, IMRG

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