eCommerce Globalization: Be Prepared, or Prepare to Fail

12ahead recently featured this article by Rosetta’s Global Commerce Lead, Gary Schoch, and Steve Gatto, Partner, Rosetta Europe. The original piece can be found here.

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Don’t worry. I won’t begin by touting the market predictions for global eCommerce growth. There’s been plenty of mention of the market characteristics that will aid internationalization – aspects like the continued rise and ubiquity of mobile, omni-channel interactions, marketplaces, cross-border shipping. Rightly so, these and more characteristics will drive international growth. And for those astutely aware, the market is even beginning to highlight the challenges with international growth and intricacies of supporting regional markets – like many areas of Europe have holiday period sales regulated by the government (e.g., Spain rebaixes).

Undeniably though, with Global eCommerce, sellers have the opportunity to create their own Manifest Destiny (yes, “Go West, young man!”. . . or in this case: East, North, South). Yet the challenge today for organizations is to feather the temptation of planting an expanding list of international flags on their digital channel until they’re ready. And this readiness? Sure, the basics are important – things like supporting geography-specific language, currency, taxation, tariffs, and the like. And sellers can further feel like they’re ready to deploy internationally by potentially leveraging many outsourced components – insert your favorite service-based selling platform, 3 PL, customer service, etc.

Yet those foundational aspects – while important – do not guarantee a seller grabbing their share. From experience, there are some essential considerations that when taken into account directly lead to global eCommerce success. Some considerations:

Organizationally: the real winners of global expansion will be the firms that recognize successfully that entering new markets requires local understanding. The sources for this “insight” are typically data-driven and based on local understanding. The quantitative customer insights from data analysis coupled with local knowledge reveal the “why” customers do what they do. Relative to the maturity of the firm, local presence & experience will have an increasing voice in the online solution and strategy.

Next, no one international expansion model is right for every company. As firms are pressured to enter international markets, many organic endeavors can result in “false starts” entering new markets (recent history offers plenty of examples – eBay, Tesco, BestBuy). Hey, it’s hard. So alternatively, oftentimes we witness firms buying into a market through M&A or simply by leveraging global logistics firms. To exemplify this trend look no further than many firms leveraging the BAT Chinese digital giants (Baidu, Alibaba, Tencent). Yet, even with this “presence,” the only way to establish long-term success is to accept that to think global, you must act local. It requires a corporate culture that breaks down country barriers and takes local requirements and needs seriously. Expect a dramatic shift in hiring teams in local markets.

And what about focus? Success will be experienced by the few that don’t try to serve all segments in a new market, but rather those firms who utilize data-driven insights to focus on not just the “ why,” but also insights into the “who.” Those not focusing on the most valuable customer segments will face challenges in profitability in their efforts to expand internationally. Many will try to serve the broad customer base that they are used to in their home market. Rather, profitability is achieved internationally by those companies that have reprioritized customers in these new markets based on data-driven insights. These companies will see growth, a significant impact on the brand experience, and higher value in those corresponding customers.

Lastly, online shoppers do not have the same expectations in every market, especially exasperated when you consider the ubiquity of mobile. Validating examples are everywhere, but as an analytical guy at heart, cited is a recent study on mobile illustrating the point that the barrier to purchase and use mobile devices varies wildly across the globe.

Global retailers will have to adopt a purposeful creative approach to maximize a user experience that recognizes these challenges or will lose sales to smaller, more nimble local providers. A single “responsive design” is too low of a common denominator for top brands trying to gain market share in a new local market. We do not suggest this means wildly different approaches; rather, we simply mean that retailers will have to adapt a purposeful strategy to find the balance that meets customer expectations. What is clear is the need for informed design.

Firms going “global” need to embrace a global customer-insights strategy, one with an understanding of the local market. Then they can fine-tune the user experience. Consider a recent Rosetta study where a client suggested, “We know that the path to purchase needs to be well parsed out, but we sometimes rely on just gut feel. We need to be more disciplined on how we derive our insights.” Global Head of Market Research, Pharmaceutical Company

Oh, and make sure your passport is ready.

View the Rosetta Consulting white papers “Customer Engagement from the Marketer’s Perspective” and “Customer Engagement from the Consumer’s Perspective.”

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