10 things retailers must consider before attempting cross-border trading

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Author: Bianca Mercer, Senior Consultant, Practicology

 

A checklist for retailers and brands who want to trade online overseas.

Never before has it been easier for businesses to expand their customer bases through cross-border eCommerce. Offering global shipping, launching localised websites or selling via international marketplaces, the reality is that testing and developing new markets online tends to be quicker, simpler and more economical than other channels to market.

 

There are success stories of UK brands now seeing more than half of their sales being international and online. ASOS is the most well-known, Boden has also passed the 50% mark and Boohoo is making headway with 35% international sales.

 

So what are the top 10 things these brands would have investigated before crossing borders online and turning a global strategy into reality?

 

1. Gather insights, trends and data to underpin your global strategy

Most brands start their global online expansion plan as a response to international customers knocking on their door. Analyse where these customers are based and test if they are prepared to buy. Decide whether adding shipping to the existing website is a good first step, or if a more localised experience is needed straight away.

 

If you want to explore the latter, assess the size of the prize by looking at the opportunity a country represents and the difficulties of entering that market. Factors to consider include eCommerce penetration, eCommerce growth, online market size, fulfilment complexity, levels of localisation needed, cultural and retailer brand fit.

 

 

2. Identify which markets to prioritise

Apply a weighted ranking to the markets you want to expand into, and prioritise your list. You have to start somewhere. It makes sense to start with the countries that offer the biggest opportunity, but are operationally easy to enter.

 

Also bear in mind that no matter how prepared you think you are, things will go wrong and there will be an element of learning. So give yourself time to roll out your first local country sites, and after that blueprint your approach for scaling your international online operation.

 

 

3. Assess your operational readiness to go global

To ensure success in your global expansion plans it is important to assess the areas of the business that can easily be scaled for international growth within your current set-up, and where the gaps are. Areas to assess are your eCommerce platform, fulfillment, customer services, payment service provider, resource capabilities, product and merchandising.

 

 

4. Ditch your global strategy and adopt a “market-by-market” strategy

Every country may require a different digital approach, meaning a “market-by-market” strategy may be more appropriate than a global plan. Retailers that are very successful in their domestic market are more at risk of getting internationalisation wrong, as it’s easier for them to overlook how their business model needs to adapt. When in Rome, do as the Romans do.

 

 

5. Establish the areas that are important to localise first

Localisation should be regarded as a journey, rather than a one-off development. Establish the areas that are important to get right from the start, such as your URL structure to give sites visibility in local search engines. Other aspects to consider per market are logistics, currency, translation, payment types, customer services, sizing, marketing etc.

 

 

6. Determine how much you can afford to invest in your international expansion efforts

Before you determine your route to market be clear on what you are prepared to invest. Will for example your investment be based on 10% of your domestic business profits, or on a pay-as-you-can-afford basis? If you go down the localisation route be aware of ongoing costs like translation, and have a realistic commercial plan in place.

 

 

7. Accept that your brand awareness might be non-existent outside of your home market

Be prepared to invest in brand building and educating a new audience on who you are, and why they should buy from you. It is not unheard of to spend up to 30% of your revenue on marketing in the first two years of entering a new market to get your brand off the ground.

 

 

8. Be prepared to test and learn

As previously mentioned, be prepared to test and learn when adapting your strategy; and be open to doing things differently in different markets.

 

 

9. Get company-wide commitment

Every employee should be a vital member of your international team, including the board, customer service, IT, purchasing, production and logistics. The aim is to ensure that international does not become an afterthought and ultimately fails due to lack of commitment. Team members who take on an international remit need to have their workload balanced with existing domestic commitments.

 

 

10. Be patient and plan for the long haul

Last, but not least, it takes time and patience to build a great, enduring global business. Expect to be in this for the long haul.

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