Global cross-border ecommerce sales reached nearly $3.2 trillion in 2021, according to Euromonitor International, which means international expansion has a value simply too good to overlook. However, experts note that in times of economic volatility and fast-changing consumer behaviors, brands need to think strategically about their path to global growth.
A recent Retail TouchPoints special report outlined the challenges and opportunities of cross-border commerce while offering tactical best practices for executives ready to make the move abroad. The four keys to success are.
Establish Your Value Proposition
Expanding internationally takes time, effort and money, which means leadership teams need to be thoughtful about which markets they enter. Brands and retailers should keep a close eye on competitors already in these markets, how they’re performing and what unique differentiation they can add to the category. They also can look at marketplaces, and even the resale market, to gauge demand and determine whether they can successfully capitalize on consumer needs.
If you find that your business and products can indeed add value to a specific market, do the foundational work, including establishing messaging and an amplification strategy, that will help your brand stand out in these markets.
“You want to make sure that you have a reason for the consumer to shop your store or your products,” said Greg Portell, Lead Partner in the Global Consumer Practice of Kearney in an interview with Retail TouchPoints. “If you can’t create that compelling proposition, then it’s not going to work. It could come from style, it could come from price point or it could come from assortment.”
Build Out Your Engagement Strategy
We’ve all heard the term “go global, act local.” After you establish your value proposition, you need to map out the channels you’ll use to market and sell to consumers. Pete Olanday, Director of Retail Consulting at Vertex, noted how critical it is to not just be present on the commerce channels consumers use but also to leverage the marketing and communication tactics they prefer.
“Only 30% of Swedes use WhatsApp versus 60% of Latin America,” Olanday said. “When reaching out, use the right channels to foster a positive customer experience.
Consider the Value of Marketplaces
If you want to slowly test a new market and aren’t quite ready to invest in customer service operations and last mile logistics, consider the value of partnering with adjacent retailers and marketplaces, which are primed for launching new brands.
“The digital transformation and ecommerce boom that helped to propel the marketplace model makes cross-border a lot easier and makes marketplaces a good route,” said Michelle Evans, Global Lead of Retail and Digital Consumer insights at Euromonitor International. “I think it helps with building that brand recognition — there’s an install base that they obviously attract. What would vary by marketplace is the degree to which you will have control over things.”
However, if brands and retailers are especially protective of their brand, they should look closely at the capabilities of specific marketplaces and how much control they give sellers around the look and feel of their digital storefronts. For example, Tmall sellers can design their own virtual storefront and ensure they have the brand visuals and content that are required to optimize engagement and conversions.
Prepare for Financial and Regulatory Complexities
Expanding globally could be good for businesses, but you need to prepare for a potentially complicated web of taxes, regulations and other unexpected fees. There are solutions in the market that help merchants manage these fees and adapt their pricing and shipping fees appropriately. Other solutions help merchants ensure tax compliance for specific markets, products and sales channels.
In cases where added fees impact the final cost for consumers, experts recommend that retailers and brands be as transparent as possible. For example, rather than simply baking all costs into the promoted price, consider adding messaging or a visual aid to showcase which fees are added.
Want to get more global commerce best practices from some of the industry’s top strategic advisors? Download the full report to get more insights and even some global success stories that you can model.
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September 02, 2022 at 05:30PM
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4 Keys to an Impactful Global Growth Strategy - Retail TouchPoints
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