What about Cross-border Ecommerce check outs; Yes or No?

Selling cross-border comes with a lot of challenges. The best approach for your organization is based on many different elements. Usually the first shift in the approach is made based on whether you’re a retailer or a brand. As a retailer, your main issue in most cases the margins you’re having on your international sales, where as a brand your main issue is properly representing your brand values in the new market and making sure that your Customers experience the value of your brand in the best possible way.

The Decision

So you are looking at your statistics and you notice traffic coming to your website from many different countries in the world. You’re asking yourself the question ‘can we services these people?’. Main issues usually are Payment and Logistics, how do I get paid and how do I ship the product free of duties and taxes to my client. You can also choose to just ship after you’ve received the money, but then take into account higher return rates for products not picked up by customers when they get stuck in customs.

Eventually, you make the decision that you want to convert this traffic coming to your webshop and you determinate your options, Cross-border check-out, localizing the site for specific markets or just allow orders from where ever and as soon you get paid you ship. Since you like to offer a certain level of service to your customers you decide to make a business case for two options; the Cross-border Check-out and full Localization of your webstore in the major markets. The starting position for the case is that in both situations the conversion rate for the visitors coming from abroad will increase. After adding all the pros and cons the conclusion is that the Check-out will cost you less and is expected to show results more quickly.

The Results

After the implementation process of check-out the results will increase, but then you ask yourself this, ‘did it bring the results you were expected and how much better would the results have been when you had done a full localization?’. Implementing the check-out still won’t offer you the well known important buying influencers like quick delivery, local language, local client support, local return address, local trademarks and are all the payment methods available required for the customer in each specific country? After a while the conclusion might be that not more than previously the clients find the way to your check-out. Maybe conversion might be slightly higher, but buying and generating traffic will be difficult and more expensive because the content won’t match your localized SEA campaigns for example. At this point as a retailer you’re asking yourself ‘is the investment not hitting my margins to hard?’. As a brand you’re asking yourself ‘is this solution representing my brand as I was expecting it would?’. The only thing at this point you are assured of is a long-term contract with your cross-border check-out provider.

My thought

Working with as well brands and retailers I’m seeing a trend. Brands in particular are changing their cross-border strategy. They start to localize their webshops for major foreign markets. Why? Because they spend millions on building their brand and they don’t want to damage this by offering a bad online buying experience, also because online sales is becoming more and more important as the place where their investment in their brand converts back into their revenue. Ideally I would say that a combination between a global check-out and full localization will give you the best results, localization still leaves you with questions/options like what is my translation strategy, do I split inventory and will i decentralized my marketing department, but when you are looking to increase sales in major markets don’t go for a cross-border check-out. It won’t bring you the results you are looking for and it might result in damaging your brand values and decreasing your margin.