by Justin Lord
Three key areas are important when building a brand: customer experience; cross-channel commerce; international commerce. International commerce requires the use of local languages, currency, payment methods and hosting. And, as the internet has few boundaries, international expansion has really taken off.
Retailers are battling increased market saturation and competition online at home, but at the same time, they can see from their web analytics or IP-detection software a growing proportion of non-UK visits, together with explicit requests by email from people overseas, all indicating latent demand.
This latent demand is being generated by exposure to UK brands, even though those UK brands might not have any kind of retail presence in that market. Instead, this exposure is being generated through blogs, social networks, natural search and other cross-border digital behaviour. So, how do you tap into this demand?
Extend what you have
You can simply extend your existing website, distribution centres and fulfilment models, while localising things like sales tax, currency, language and payment methods step by step.
Extending what you have is a logical first step because it is quick, low-cost and relatively straightforward. You can add countries to which you will deliver at a rate that suits the business, guided by the latent demand you can see. So it shouldn't be a stab in the dark.
But at the same time, this method might not help you make the most of the opportunities. You need to think about fulfilment issues from the UK – delivery costs can be high, which could make your proposition less competitive and the time to deliver is obviously going to be longer than local players. Customers will also need clarity and reassurance on the situation regarding things like import duty and returns.
There may be issues with a UK-hosted website that need to be looked at. As well as search-engine page rank and potential legal and regulatory issues, such as data storage, you'll need to think about your site's performance.
We monitored the performance of a variety of UK-hosted websites from around the world, to understand the potential impact on speed and performance. Some major markets were seeing page download times 5-6 times longer than European countries. While it's possible to mitigate network latency to a degree by deploying Content Delivery Networks, this is never going to be as fast as local hosting.
In summary, extending what you already have is a pragmatic and low-cost solution – certainly a good way of testing the waters – but it is not going to offer the most compelling solution to your overseas customer in terms of either delivery promise or website performance.
Use local hosting/fulfilment
If you really want to exploit international expansion, at some point you are going to want to offer a local service: local hosting and local fulfilment.
There are basically two variants of this approach. There are typically a number of local service providers who can offer a full service – warehousing and website – as well as their local expertise and understanding.
This can help increase your speed to market but you'll need to factor in time to research the market and find the right provider. Once you've found one, you'll also face the challenge of managing a patchwork of suppliers, platforms and integration interfaces. And your brand is in someone else's hands.
The alternative is to work with a global service provider which has a local presence. This provides a single platform with regional/local hosting, which supports local payment methods, including cash on delivery.
This also gives the benefits of economies of scale, as well as making website management and administration of your website easier. You get a local nuance but maintain control over your brand and supply chain."
The five steps to successful international e-commerce
Justin has pinpointed five steps to ensure international success:
1. Follow the demand
2. Prioritise ROI – small investments can offer big returns
3. Localisation: fulfilment/logistics considerations are as important as the website experience, if not more so
4. Choose the best of both worlds – global platform, local marketing
5. Offer a locally nuanced site, but remain true to your brand
Justin Lord is business development director at BT Fresca