Twelve Barriers to 2015 Retail Global Expansion, and Hacks for Breaking Them Down

Globally, online retail sales have been increasing at a rate of 17 percent (CAGR) annually since 2007, with Asia Pacific at 25 percent and Latin America at 27 percent. While established markets in the United States and Western Europe continue to show a rise in online purchasing, next-generation markets such as China, Russia, Brazil and Turkey offer a prime market for high growth potential with lower rates of competition. Successfully combining the right international online marketing mix is imperative to reaping the rewards that a growing world economy has to offer.

Top online retailers understand that global expansion is a crucial element of an aggressive growth strategy. The path to successful deployment in a new foreign market is paved with challenges stemming from multichannel integration, cultural norms, payment processing, and logistical infrastructure. Globally recognized brands selling goods overseas are meeting these challenges by either developing extensive internal teams or partnering with ecommerce logistics management and third-party technology companies.

In this article, we explore twelve top multichannel obstacles to expanding, growing, and maintaining your ecommerce site in foreign markets, and hear from experts in the business on the best course of action to breaking through the barrier.

Localizing product names and descriptions
For many retailers, naming their products is an extension of their brand and a part of the unique style that sets them apart from competition. For example, consider the naming conventions of paint colors at the British company Farrow & Ball, which creates distinctive names for each shade of paint they sell, including Savage Ground, Mole's Breath, and Arsenic. The same applies for high-end and lifestyle retail brands like All Saints, who sell the City Monument coat, a Chai jacket, and the Rally Mini Pony, a popular handbag.

Top retailers pushing their products into foreign language markets understand the challenges of translating unique product names and descriptions. While "dusky blue" is meaningless in German, "newmarket tan" is untranslatable into Russian. While Mulberry's "postman's lock" can be transliterated into Chinese, the NIKE AIR MAX is left in English within the Chinese market.

Solution: Employ creative copywriters within the target market to advise on what level of translation, if any, is necessary or expected from the target audience in that market. When product names require creative translations, have copywriters transcreate your product names and descriptions into something equally bold and inspiring.

"Brands promoting and selling their products across multiple languages and platforms on a regular basis can best achieve continuity by engaging the services of a specialist translation agency," says Patrick Eve, managing director of TranslateMedia. "An agency that specializes in creative and marketing translation will have highly experienced teams of project managers and global creative copywriters working within leading technology that allows for each global team to see how terms have been transcreated for other markets. As product names are approved, they are stored with translation memory, which will automatically populate future content in the online editor, ensuring consistency for product reiterations to come."

Creative design that supports creative content at a local level
Merchants developing regional e-commerce sites start with the understanding that currency will be different, language will be different, and inventory and order management might even have to be different. But there's an assumption that the design can easily be copied from one market to another. This can create issues.

"Think about the basic meaning of color in different parts of the world," says Jeff Lesko, creative director with Lyons Consulting Group, an e-commerce digital agency based in Chicago. "In western countries, the color red indicates either high energy or love, while in eastern cultures, red is associated with prosperity, and in South Africa, mourning. A design that incorporates a lot of red and works well in Peoria may not be quite as successful in Pretoria."

A more subtle design challenge involves fitting design elements around the verbal translations. Once you have a product name or product description translated, you may find that the elements of the design are no longer proportional with words that take up significantly more (or less) space. The implementation process of global design needs to be prepared to accommodate such adjustments.

Solution: According to Lesko, "Ultimately, the design hack to overcome the design barrier is to build in a review step for each individual country's site as a standalone project — even if all basic design elements are carried over from country to country."

Product information management for all platforms, in all locales
As companies expand globally, often within one market at a time, it is common to develop a new team and process for each market to provide the flexibility to undertake that country's specific marketing campaigns. However, with the best of intentions, corporate leaders who want to give each country's management team the autonomy to select their own authoring and e-commerce solutions find that these multiple silos and processes become overwhelmingly complex and unwieldy when markets expand or proliferate.

Solution: Global commerce requires a global solution for product information management to streamline processes, eliminate multiple silos, expand without headache, and deliver a great customer experience.

"Every brand manufacturer, distributor and retailer understands why it's so important to deliver a holistic and complementary customer experience across all channels and touch points," said Richard Hunt, president and CEO of Agility Multichannel. "Aligning processes, systems and organizational structures to meet this critical business requirement is an incredibly daunting task for a global company. The key is to design a single, flexible, scalable global process that makes it easy not just to add channels and touch points but to move into new markets and countries when opportunities arise.  An enterprise Product Information Management (PIM) system can provide tools for product on-boarding, governance, workflows, enrichment and translation, approval and syndication that let end-users in any country and any department seamlessly localize and market their specific products – all within a single, endlessly scalable, global solution."

International search
In fashion, one size doesn't necessarily fit all — and the same applies to your international websites and search strategy. From web page layout, to word definitions and cultural preferences, countries have widely varying practices and unique online user behaviors.

Your website is your shop window in every country in which you have a retail presence. Understanding how people in each market really talk about and search for a particular product, service or solution, is integral to delivering a water-tight international digital marketing strategy.

For example, businesses that launch websites in China using the same format as their western sites make the assumption that Chinese consumers follow the Western users taste for glossy "look book" style content dominated by images. However, Chinese web design is predominately text heavy as Chinese users expect a text-heavy, information-led experience.

"Never assume that what works in your home market will work overseas," said Greig Holbrook, owner of Oban Digital. "Technology preferences will differ wildly – for example in China, RenRen replaces Facebook and old versions of Internet Explorer vastly outstrip newer browsers like Chrome in terms of user share. To tackle every global challenge requires local market knowledge at your fingertips. In a world awash with data, a deficit of insight is not only a danger to your international strategy but to your business as a whole."

Solution: Pinpoint how your audience engages with your local website and how to respond to them; conduct a thorough audit of search intent analysis in your target market to identify trends and online behavioral differences; and drive up conversions and reduce bounce rates on your international websites with cultural multivariate testing (C-MVT) to identify key cultural factors that significantly impact conversion rates on local market sites.

Product videos that close the global experience gap
According to Digital Sherpa, videos increase people's understanding of your product or service by 74 percent and website visitors are 64 percent more likely to buy a product on an online retail site after watching a video. Video has proven to bridge the "experience gap" created by shopping online rather than in a store where a product can be seen and felt. It makes great sense to provide localized versions of videos so they can reach your customers in all regions.

But products may vary by geography. Laptop computers, for example, may have a different set of ports or power adaptors for Asia Pacific, Europe, and other global regions. More than one company has made a great video for a local market and then discovered that, even with translation, it can't be adapted for the global stage.

Solution: "Plan ahead," says Russ Somers, vice president of marketing for visual commerce provider Invodo. "Know what the product specs and customer concerns are in all your regions, and use one shoot to capture all the footage you need for all regions. It's even possible to use green-screen to show different presenters for different regions. That lets you capture ROI from your production spend across all regions, not just one."

Native language product review moderation
One of the greatest benefits to online shopping for consumers is the ability to see how a product of interest was reviewed by a previous buyer. According to Nielsen, 57 percent of online shoppers read reviews prior to purchase.

Moderation is a necessary process for any company that uses consumer reviews to engage consumers and gain valuable insight on products, business processes, or market trends. However, global companies find moderating and responding to review content across countries that differ in cultural norms, language patterns, and local vernacular to be quite challenging.

Solution: Employ a human moderation team to work alongside machine-based systems.

"Given the high volumes of content submitted, machine-based systems are becoming more prevalent as a first-line effort to screen submitted content," said Jennifer Griffin, vice president of content integrity & insights at Bazaarvoice. "These systems can readily identify relatively simple characteristics such as profane language; however, they remain limited in their ability to parse the real value of consumer reviews, which is the context they provide. Accurately moderating, tagging and deriving insight from reviews — particularly when conducted across geographic and cultural boundaries — can only be achieved from a specialized human moderation team with brand-specific knowledge and native language skills. The written word is complex and it is this human element that helps ensure the success of any international review program."

Social media geotargeting
Remember when businesses thought that social media was free? Marketers who delved into it learned quickly how untrue that statement was as it chiseled away at their time. Without the proper tools in place, creating a social media presence in a market where your online retail site has just been released will be daunting: new content must be created, new sites, new pages, new groups — not to mention new social sites (Vkontakte in Russia, Line in Japan).

Solution: Manage your social media streams through an online global social media platform. Through a social media platform you can take one piece of content and disperse it through any and all feeds that are relevant. Take Facebook, for example. If you choose to only have one global Facebook page you can post all materials to that page, in every language, while targeting the news feeds of only those in relevant markets with your content, promotions and Facebook adverts. Yes, it will all appear on your page -- but fewer than 2 percent of impressions will visit your fan page, while everyone else is clicking links, liking photos, and consuming content. Plus, geotargeting provides data on trending terms to optimize your search.

"Use geotargeted real-time social data to improve search optimization to include the most current and relevant terms that consumers are talking about in overseas markets," says Corey Pudhorodsky, customer partnership manager at Spredfast.  What's trending in New York City may be very different from what people are talking about in London or even Montepulciano.  Honing in on what matters to specific markets can set smart brands apart from the pack.

Global email marketing
Email marketing is on the rise. According to eConsultancy's Marketing Budgets 2014 Report, 62 percent of marketers plan to increase email marketing budgets over the next year, with many finding email to be the best channel in terms of ROI – beating out SEO, paid search content marketing, and social media.

Insights and analytics on customer behavior derived from email marketing make it central to any great omnichannel campaign. Key to increasing consumer engagement and response through an email-based campaign is the ability to provide relevance, value and context. However, global retailers are regularly challenged with creating relevant campaigns that resonate with regional audiences.

Solution: Avoid making assumptions, provide options, encourage self-selection, and identify existing partner opportunities.

"You may think you know where your subscribers are allocated but you may have untapped opportunities in other countries and languages," said Jim Davidson, director of research, Bronto Software. "Encourage your site visitors and email subscribers to share their location, preferred language, and shipping destination when setting up an account or opting in for email.  These details provide your team a better understanding of which regions to target with multi-language marketing messages and develop global shipping infrastructures. And rather than feeling overwhelmed or starting at square one, reach out to your existing partners to see what globalization options they offer. Partners like your e-commerce platform and your email service provider may have global solutions in place that could help you get started."

"Local" customer support
Today any retailer can establish a presence in any market by creating a local language website, but establishing a credible global brand is dependent upon many other factors that include delivering local customer service. This is a critical component of any expansion strategy and traditionally requires significant investment. There are, however, new and innovative ways to overcome this barrier to growth.

Solution: Deploy live chat to offer assistance to target customers cost-effectively while delivering high customer satisfaction. Live chat conversations are more cost effective than calls as agents can handle several concurrent conversations with customers from anywhere in the world.  Where agents with local language are not available, live chat can be combined with real-time translation tools to convert the consumers' questions into the language the agent understands and vice-versa. Thus, new territories and markets can be brought on stream faster while avoiding the cost of opening local language call center.

"The lesson learned by global companies is that by deploying successfully in international markets such as China, they now feel ready to expand to any territory," says Tony Heyworth, international marketing director, LivePerson. "One of our clients, a global electronics component supplier, deployed live chat services to 27 markets, in 19 different languages — growing their global e-commerce business by offering superior service. Rather than offering basic assistance, the main purpose of the chat is to deliver a genuinely value-add experience. Chat agents themselves are trained locally in each territory to provide value-add advice but can be part of a central team where expertise can be shared." 

Localize the checkout experience
One of the chief causes for shopping cart abandonment is lack of payment options. Providing multiple payment options that are common to each market increases the number of people who are able to purchase — thus increasing revenues within each market. However, U.S. retailers are frequently daunted by the challenge of providing a localized shopping experience to a wide range of markets and geographies.

Solution: Choose mainstream and popular payment partners within key growth markets and leverage geolocation technology to automatically identify where your customers are based.

"The key is to prioritize the markets where you anticipate the most growth for your brand, and to partner with the leading mainstream payment and shipping providers in those markets and regions," says Kris Green, chief strategy officer for Borderfree. "Using geolocation technology to identify the region the customer is checking out from is critical to providing a smooth experience throughout the process. Additionally, adapting checkout screens to display localized payment methods and global address fields gives the customer a more comfortable and familiar shopping experience, which increases the chances that they'll complete the purchase and shop with you again."

Shipping logistics to overseas markets
Internationally, there are more than $1 billion digital buyers online. Global e-commerce sales have totaled more than $1 trillion since 2012. The ability to sell your product overseas, through advancements in digital technology, is easier than ever before. However, there are still a number of challenges associated with managing the complexities of international fulfillment and shipping — restrictions, compliance, tracking and insurance.

Solution: Build capabilities that you currently do not have in-house through external providers that have centralized U.S. shipping facilities and can help eliminate global logistics barriers.

"By leveraging the expertise of a logistics company that maintains comprehensive service portfolios ranging from efficient fulfillment models, to returns solutions to last-mile delivery services, retailers can fulfill international orders much more cost-effectively and efficiently," says Michael Lamia, vice president of global network operations and e-commerce at Pitney Bowes. "For instance, shipping goods to centralized facilities in the United States can help eliminate the need for cross-border infrastructure and/or up-front capital investments at destinations thereby increasing efficiency and capabilities without risk or expense. Retailers can also benefit in other critical areas often neglected, such as commodity restriction policy, managing import/export compliance, and providing full track-and-trace capabilities for international shipments.  This can help make global fulfillment and shipping simple to deliver packages cost-efficiently to destinations around the world."

International legal and regulatory barriers
It may sound obvious, but different countries have different laws. Navigating international regulations is a challenge any business has when selling and doing business outside the United States. In recent years, brands have been going global at an earlier stage of their growth and have found themselves navigating the complexities of different laws and regulations whilst managing tight legal budgets. The wall of requirements can look intimidating. Some key legal challenges to consider include:

*Product labelling and safety: Countries vary in practices and legal requirements regarding how products are labelled. Although aimed to ensure consumer information and safety, the actual contents (language and information required) can differ. In the European Union, there are set safety standards for quite narrow categories of clothing (e.g. nightwear), and labelling requirements around fiber contents, country of origin and care. Not to mention that sizes are measured differently.

*Sales and advertising: Local rules and expectations vary; for example, many countries have rules on how long a product must be in stores at full price before it can go on sale, as well as how long it can remain at sale price. Online, mail order and telesales are highly regulated in some markets as well. In Europe, consumers have rights hard-wired into the legislation to cancel an order and get their money back even after it has been delivered and worn (with a few exceptions).

*Trademark and Registration: Despite international efforts and a number of treaties where countries agree to respect IP, there are still certain markets that do not, and brands need to go in with their eyes open. Registering key brands in major markets is important to ensure someone else does not profit from your brand name or apply for ownership of it themselves.

*Local entity and tax law: If you have a local presence, such as a warehouse, factory, or even a server hosting a site or an app taking online orders: (1) verify whether a local entity is required; (2) take international tax advice about the relationship between your U.S. parent and non-U.S. affiliate; and (3) consider how to ensure that revenues rest in a tax-efficient way.  Where you have boots on the ground, be sure to understand how local HR laws impact how you operate in the United States, and be aware that employment laws outside the United States are often much more protective of employees —  realizing too late can be costly. Rule of thumb: never fire a local (non-U.S.) hire without understanding what claims that employee could make.

Solution: "Various providers can take much of the pain and cost out of selling outside the U.S., with various models which take the fulfilment, customs, sales tax and/or foreign exchange hassle out of selling abroad," says Christopher Jeffery, partner at Taylor Wessing. "Seek professional advice from lawyers and tax experts who have proven experience helping similar U.S. companies move into their market. Depending on the size of your activities and presence in the new market, some of the legal issues may be nice-to-haves and, in order to manage budgets, dealing with them can be delayed until you have a better feel for the success of the venture. For instance, product safety and labelling requirements are essential from the beginning, but complying in full with consumer protection and privacy requirements in local markets can sometimes be delayed until there are boots on the ground. It is a delicate balance, but an important one to get right."

Susan Andrus heads up U.S. marketing for global language and translation services company, TranslateMedia, where she directs customer relationship strategies, online marketing initiatives and brand management for the company. Andrus actively volunteers with the Austin AMA and currently sits on the board as president. She studied marketing at the Red McCombs School of Business at the University of Texas at Austin.
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