Last week’s Retail (R)Evolution hosted by Pitney Bowes explored how global e-commerce is evolving, and NMPi’s CEO, Luke Judge, was there to share his expertise on cross-border marketing along with Feng Chang from Rue La La and Jodi Goldberg from Google.
The panel session highlighted four key themes, delving into the strategies that every international retailer should know for building successful cross-border marketing campaigns.
Choosing a Territory
If your business is new to international e-commerce then it can be daunting to decide where to begin. Each market is unique, even if they share a language they will have their own nuances, so how do you choose?
We don’t advise going global initially, instead look at your data and see what it is telling you. For instance, brand awareness will have a massive impact on your success within a market. If a consumer is aware of your brand it boosts their propensity to buy.
Using the likes of Google Trends you can gain insight into which countries have a greater search volume for your brand terms. Make sure to check this yearly, just because the market is always changing.
Brand awareness, whilst a good indication, is not the only area to consider. What language is your existing site in; if its English will that affect the likelihood of an international consumer making a purchase? Look at areas which may have a greater population of expats, or perhaps areas where you have a price advantage.
All of these factors come into play when selecting which markets to enter, but once you have selected a market there is still more to be done.
Choosing your Inventory
One of the first things you have to set up when you’re preparing to break into international markets is your inventory. The products you sell need regional interest and be mindful of seasons. For example, due to the difference in seasons, if you are a retailer in the US or UK countries like Australia or South Africa are great for getting rid of old seasonal stock.
Having a big inventory to choose from is useful, but it isn’t crucial. Don’t discount the power of a small product selection in which everything has a high demand. Also, having exclusive rights to sell a high demand product will greatly increase your chances of success.
How to Price
If you cannot be price competitive within a market, and your products are not exclusive then it is very unlikely you will be able to steal market share and beat out the competition. This should make it one of your top priorities, especially when working with a limited inventory.
Price conversion, whilst it might seem obvious, is something we recommend having in place before expanding into a market. Not only do your products sell better when in the local currency, but helps to avoid confusion and mismatched pricing between your Google Shopping campaigns and your Paid Social campaigns for example.
Don’t forget to factor in the extras such as import taxes and international shipping, as we sometimes see customers abandoning their baskets after seeing additional costs.
Factor in International Shipping
On that note, campaigns tend to perform better and drive a greater ROI when shipping promotions are included. When you’re breaking into a new market, including an offer for free international shipping in your ads will often result in a higher conversion rate, but make sure to be upfront about the thresholds of this promotion. No consumer likes to get to the end of a purchase and realise they don’t qualify for your promotion.
Example: “Free Shipping to the UK when you spend over $50”
You might be tempted to take advantage of one of the many sales holidays across the globe like Singles Day in China, Click Frenzy in Australia, and Black Friday, which has become a truly worldwide phenomenon. However, when it’s not your domestic market you may find that despite having great offers you lose out on sales because of international shipping. Unless you can compete, it’s better to avoid getting lost in the crowd and hold off on your international promotions until after the holidays. We often see better performance when clients offer free international shipping outside holiday sales periods as it removes the need to devalue inventory and reduces competition.
If shipping promotions are not right for your business, ensure that you find the right balance of product cost and shipping cost. Too high a shipping cost, and much of your ad spend gone into bringing them to the site will be wasted. Too high a product cost, and you’ll struggle to get potential customers onto the site. It’s important to keep your basket abandonment rates in mind to help you strike the perfect balance.
Each marketing channel has their own strength and weaknesses. For instance, visual channels such as Google Shopping, Display and Social Media grab the attention of the consumer and help to increase awareness of your highlighted products. Paid Search, on the other hand, is great for getting the consumer to convert.
Just as different channels have different outcomes, marketers have a range of goals they need to achieve. It would be unwise to place all your eggs in one basket and expect for an adequate ROI.
Create a holistic approach to your international marketing strategies and make sure all of your channels are communicating with each other. If you track Search conversions on AdWords, Display conversions on Criteo and Facebook conversions through the Facebook pixel, you might be triple-counting your sales and wasting all-important budgets. Complete oversight is one of the biggest ways to ensure success when breaking out internationally.
In a global world where the distance between countries is getting smaller and smaller, and our connection to each other becomes greater all the time, it’s necessary to keep an eye on the latest innovations in the industry, especially those that will be maturing in the 2-3 years. We expect 3 big changes:
- 1-click payments will become the norm on Social Media platforms
- There will widespread uptake of 2hr delivery vis-a-vis Amazon Prime Now
- China’s advanced image recognition technology will expand into western countries like the UK and US.