By Michael W. Hechler, Senior Vice President & General Manager, Global Consumer Electronics & HiTec at Digital River
Effective cross-border online sales involves more than translating “shopping basket” to “warenkorb,” or “panier.” Success in global online commerce requires extensive localisation of e-stores and associated support services to establish a credible and compliant presence in each country.
A large number of companies still have a long way to go to be prepared for effective cross-border sales. Recent global research by market research company, Vanson Bourne forDigital River revealed that only about half of the companies surveyed reported that their commerce offerings were fully localised for the markets they serve. That includes 57 percent that did not have customer service options fully localised, 50 percent did not have payment options fully localised and 44 percent did not have store layout fully localised.
From our experience working with thousands of companies on a global basis, failing to localise store designs, languages, currencies and customer service can be substantial impediments to attracting and retaining customers through the online shopping and checkout processes. While companies everywhere are drawn to the promise of additional revenue, enhanced margins and new opportunities that selling cross-border presents, many are unaware of the complexities that can waste money, cause delays and sometimes stop global initiatives dead in their tracks.
The research echoed what we continue to hear from companies of all sizes as they prepare to enter the global online marketplace, that building, managing and growing an online operation on a global basis is a costly, time intensive and complicated proposition.
Tax and compliance issues seem to have the highest degree of difficulty when it comes to commerce, with 65 percent of the survey respondents rating it as significantly challenging. More than half of the respondents also rated several other commerce areas as ‘significantly challenging’, with 59 percent noting customer support, followed by global payments (58 percent), marketing channels (57 percent), language (56 percent), and the localisation of the online store (56 percent).
With just a click of the mouse, companies can take their online business global. However, the key to success is to operate as a local company. The following checklist will help businesses prepare a localised online commerce strategy:
Are all online commerce sites translated and localised in the languages spoken by the buyers in the supported regions? Language localisation is a basic point of entry that companies must implement straight away.
Are product prices displayed in local currencies? It is crucial to ensure that prices reflect amounts that regional consumers deem acceptable and appropriate and take into account country-specific pricing and exchange rates.
- Tax and Export Controls
Does the online store comply with tax and export regulations worldwide? Local sites need to be able to calculate and apply the appropriate taxes for each individual market.
- Operational Compliance
Are back-end business operations compliant with local government and consumer laws, including those outside the company’s native market? Failure to collect and remit recycling and regulatory fees in applicable locales as well as report proper sales figures to local authorities can result in steep monetary penalties and sanctions.
- Preferred Payment Methods
Can customers choose from localised and preferred payment methods, such as iDeal in the Netherlands or ELV in Germany? Companies can realise sales increases in some countries up to 30 percent by offering regionally-preferred payment methods.
- Logistics and Fulfilment
Are fulfilment processes optimised? Products shipped from local warehouses, or downloaded from regional servers can deliver savings and convenience for customers and increase efficiencies for companies.
Do marketing strategies comply with local email and privacy regulations? Banner ads and search engine campaigns that are fully localised and optimised to drive ROI can attract more customers and drive more sales.
- Customer Support
Are online commerce sites backed up with 24/7 customer support? Customer service personnel that speak the language of local customers and handle email communications, returns, and other functions in a way that caters to local customers will be well received on a regional basis.
- Sales Channel
Has the optimal revenue/expense ratio been reached for the online commerce sales channel? Devise and execute a reseller and affiliate management strategy to ensure a balanced multi-channel approach.
Is the company continuously evaluating and optimising the online commerce sales channel for global markets? Draw statistics from reporting tools rather than relying on intuition to make more informed decisions about strategy and site execution.
As more companies expand globally through online commerce initiatives, the necessity to function as a local company is increasingly important. By considering this checklist, businesses will discover the steps required to establish a credible and compliant presence in each country. With a proper localisation strategy, the Internet can prove to be a truly valuable passport to doing business anywhere in the world.