The borderless promise of e-commerce doesn’t mean one size fits all. Your business can have customers from around the globe, but if you want to keep them and grow, it is crucial to understand local shopper preferences and behaviors, and be able to respond to them. Without localization, you won’t have an effective go-to-market strategy, and your opportunity for growth will stall.
Sure, the advent of selling online means that conventional borders no longer exist. Consumers are expected to spend US$1 trillion on cross-border e-commerce by 2020, according to a report by McKinsey.
Also, online buyers are not afraid to purchase goods from foreign merchants, as a recent KPMGstudy confirms, with international sales making up more than 40 percent of the total for the countries located in Latin America, Africa, the Middle East and Eastern Europe.
However, selling across borders is not the same as selling at home. If you can’t create a localized, trusted and customized experience for shoppers, you definitely will suffer from low conversion rates — or even worse, fail to win their business at all.
Shoppers may be willing to browse an offshore merchant, but the quality of the buying experience and how much the vendor is trusted factor heavily into consumers’ decision-making.
Localization is critical, as it contributes to the trust that is so important to global buyers. Vendors need to start by crafting a localization strategy. However, many don’t understand what the minimum requirements need to be and where to begin.
Following are a few things to consider.
Audit Your Local Audience, Markets and Resources
Once you have prioritized your markets and determined which ones you want to optimize, focus on auditing the unique aspects of those markets that will impact buying behavior the most.
Any strategy that doesn’t consider the language, culture, preferences, needs and even idiosyncrasies of the local market is doomed to fail.
Connecting with global buyers requires an approach that treats each market differently. This means localizing each aspect of the buying experience, which includes everything from the payment method, currency, prices, text, labels and messages, to date and time, phone number, graphics, formatting, punctuation and addresses.
Creating an audit of the market will help you determine the must-haves to be successful in the region.
Translating Your Site Is Not Enough
Many sellers still believe that translating a site into the local language solves the localization issue. It doesn’t. English is the language of the digital world, but the reality is that in most countries, 80 percent of transactions occur in the local language.
However, translation is only a small piece of the puzzle. Localizing content, product, all documents, pricing, communication and onboarding also should be considered. Ultimately, support must be offered in the local language, too.
Consider a Different Layout, Flow and Shopping Cart
Besides language translation, there are many localization elements to consider. The design of a website for China should differ greatly from one for Japan — even if you’re selling the same product. Likewise, user experiences that work in Europe don’t always have the same impact for shoppers in North America or other regions.
As with website content layout and flow, buyers expect your shopping cart to reflect their local preferences and norms. Conversion rates for non-localized shopping carts are significantly lower.
This involves localizing every aspect of the cart — which means text, labels, messages, dates, times, phone numbers, prices, graphics, formatting, number of steps in the ordering process, length of forms, information that is prefilled and more.
It’s essential that you research the best layout and flow that will work in each region, and then fine-tune them by testing different versions and comparing their conversion rates.
Online shoppers in France, for example, prefer carts with a blue and white color scheme and a more formal tone to their text.
French customers also react better to positive language versus negative — such as “what to do” instead of “what not to do.” Plus, in France, they are very fond of the Carte Bancaire payment method.
On the other hand, in China you need to offer Alipay as a payment method or WeChat Pay. In our experience, businesses that sell in the Chinese market conduct more than 50 percent of their transactions via Alipay alone.
It’s not just payment or colors schemes either. Cultural and societal considerations are critical. In China, it is recommended that you avoid the number four, which is considered unlucky.
In some countries, selling online can be more difficult for foreign companies. For example, Latin American countries such as Brazil, Chile and Argentina have stringent currency laws that make it illegal even to publish prices in currencies other than the local one. In addition, it’s a prerequisite that customers have a nationally issued bank card for any payment purposes.
You need to know the lay of the land in every country you want to have a presence in.
The Price Needs to Be Right
An important deciding factor when buying online is the price. While some aspects may be beyond your control, such as shipping and handling or fulfillment, many others are not, such as regional-appropriate pricing.
Just because your product is priced competitively in one market, that doesn’t mean the same is true in another. Transparency can be accomplished by giving shoppers the option to view the price in their local currency. However, a better practice is to use GeoIP detection technology, which identifies the shopper’s location and displays the local currency automatically.
Being able to set the pricing by location allows you to adjust your strategy to the economic reality of each market, and to the costs that you incur by doing business in that particular geography.
Payments Change Everything
Payment localization isn’t just a matter of convenience. It’s a determining factor in the buying decision, and it’s a good way to establish a level of trust and comfort that no amount of marketing or promotion can provide.
In addition to increased conversions, card purchases transacted with the combination of a local payment method, gateway and merchant bank have a much higher chance of being approved than any type of foreign payment.
However, creating the necessary infrastructure to localize payments is neither cheap nor easy. The typical payment processor will be able to provide coverage only for a single country or region.
That means you’ll need to source and sign a processor for every region or country in which you intend to sell, as well as set aside time and resources to integrate and maintain them. If your plans include expansion into multiple markets, finding an e-commerce platform that can help you scale is the best option.
To be successful on a global scale requires payment capabilities that involve more than just completing transactions. Advanced payments can be an invaluable tool to increase conversion or renewal rates, reduce churn, and improve the customer experience.
Among them are solutions such as credit card updating services, which ensure that recurring billing remains intact by updating a customer’s card expiration date automatically, or intelligent payment routing, which redirects the payment through to the most appropriate gateway or processor, and configurable retry logic, which recovers up to 20 percent of failed transactions due to soft declines.
Local Customer Support Is a Must
Seventy-eight percent of consumers have abandoned a transaction because of a bad service interaction, according to American Express.
Hence, it’s critical to your localization strategy to provide good shopper support — from providing a local phone number, a localized email system (sent in local languages and during business hours) and even a toll-free number.
Additionally, email follow-ups, order recovery, lead management, and even marketing messages all need to be localized for an optimal experience.
The Certainties in Life Are Death and Taxes
OK, let’s not get too gloomy here. Even taxes can be manageable. Regardless of where your company is based, you’re legally required to properly manage and collect sales and value-added taxes levied on each transaction. The amount, the authority responsible for collecting it, and the rules governing it can differ from country to country.
You need to know how much tax to charge and which entities and businesses are exempt. Many of these details can be automated with templates that support pan-regional commerce and have GeoIP location detection to identify the shopper’s country of origin.
Other details, such as how and where to distribute the tax proceeds, must be handled by the seller (as the merchant of record) or its proxy. Companies wanting to accelerate sales can leverage a digital commerce provider to act as a merchant of record in each country. In addition to tax handling, such providers can manage all the financial aspects of the transactions, leaving you with just the proceeds.
Data Protection Compliance: A Reality
We’re increasingly seeing more regulation to protect citizens’ personal information across multiple borders. In the case of GDPR, any company that interacts or does business with EU citizens or EU-based companies must comply.
New laws in the U.S., such as in California and Vermont, have similar mandates protecting local citizens and businesses. Compliance is essential as a result, because the failure to comply can result in crippling fines.
Hence, it makes business sense for merchants to work with an e-commerce partner that has an established governance structure that supports broad compliance, and that conducts regular compliance assessments and audits.
Where Do We Go From Here?
E-commerce continues to represent a huge opportunity for businesses, with no signs of slowing down. However, the companies that capitalize on this growth the best will be the ones that have comprehensive strategies in place to deal with optimizing sales in prioritized markets. This includes plans for international growth in which localization plays a critical role.
However, as we’ve seen, global e-commerce isn’t one size fits all. It requires careful consideration of the marketplace you are entering, and it may seem truly beyond the scope of most companies.
Before expanding, businesses need to arm themselves with knowledge about where to prioritize their efforts. They also need to choose a partner with the right combination of skills to get them there: expertise in global e-commerce capabilities, relationships, even access to local affiliates and resellers that can help any merchant penetrate into a local market quickly, effectively, and with the right knowledge and marketing power behind them.