Cross-Border Commerce in Australia – A Game of Local Market Share!

Last updated on July 26th, 2018 at 11:08 am

Cross-border commerce has paramount benefits for every business scaling itself from small-sized companies to a bigger one in due course. In Australia, many small and medium businesses have sourced their success from global marketplaces, trying to fill in the gap between demand and supply better than local vendors. Such companies that thrive on cross-border commerce continue to increase leads, shares, profits, and revenues in global expansion. Generally, the small startups are innovative, agile and even have the potential to grow much larger than one can expect.

The Small and Medium Business (SMB) community in Australia dominates the private sector in terms of employment. They serve as an employment to millions of Australians and contribute much more than the large businesses to the Australian economy. For the past five years, there has been a drastic increase in the count of actively trading businesses running across Australia. This has primarily led to increased growth of small business communities. The consumer shift has driven the small businesses in the cross-border market.

Such businesses should be encouraged to focus on the values of the sales opportunities outside the Australian market. They should know the fact that billions of consumers await the best quality products from cross-border markets. This inspires them to take a step ahead into the cross-border business.

Impact of cross-border commerce in Australia

There is a constant rise in the demand for the Australian products and services amongst the overseas consumers. This high demand is due to the quality Australian brands offer to their worldwide buyers. Also, the Australian sellers have developed and maintained a strong relationship with their consumers. Such demands have the potential to increase the consumer market in the Australian business by billions.

The “Australian-made” certification had been introduced about 30 years ago. It provides a thrust to the domestic business for excelling in the market of production of goods and services.

Young Australians love to shop!

National Australia Bank conducted a survey that reveals the percentage of total cross-border purchases. The calculation involved a larger ratio of the generation Y as the. Eventually, to meet such high demands, delivery companies had to increase their benchmark of supplies of the international brands online.

The Global brands need to develop strategic solutions to fulfill their consumer’s every need. Whether it is entering the new channels, increasing the data warehouse capacity, or offering prompt delivery and tracking options, they have to cater to every demand. Improvements in the fulfillment mean the online retailers and brand can set up their inventory near to the Australian customers. This emphasizes on cost-effective and quick delivery.

Shipments are off the dial

There has been a staggering growth in the cross-border shipping services when it comes to Australian retailers. The e-tailers in Australia promise fast delivery of all the products from fashion apparel to cosmetics and vitamins. The best selling products with high quality and first-class delivery services have made the Australian business flourish in these markets.

Thus, in terms of shipments, quality products, high demand and strong market shares in the overseas market, Australian businesses have been quite a ruling name.

 

3 brands that made it big into global markets with cross-border commerce

Last updated on June 22nd, 2018 at 02:22 pm

In the race of cross-border commerce, some brands have carved out a niche following several website localization tactics and processes. Some brands have taken help of localization services while some have developed attractive local websites to grab user attention.

Effective website localization goes beyond just product selection. Consumers demand more of localized content and media that they can understand and trust. When your brand understands this, you’ll be able to create template-based websites that follow a single format, but that can house new blends of content by the market.

Are you looking for investing in the biggest global markets? Do you want to take a step ahead of your competitors in the long run?

Here’s a complete guide how these small businesses have made it into the enterprise businesses.

O Boticario – A big name in the world of cosmetic and perfumery

The largest perfumery and cosmetics franchising network in the world. Also, it is Brazil’s second largest cosmetic company. It is spread across Brazil, Mexico, Peru, the United States, Japan and France with over 4,000 stores.

O Boticario has demonstrated ways to globalize the markets with the best approach. It has utilized the power of analytics to customize the merchandise for local and international customers. It has increased productivity by localizing the sites in terms of SEO perspective. Here are some strategies to expand globally:

  • Tailoring media and content by market

Every emerging brand should understand well that effective website localization is not just about product selection. It is more about how the consumers across the world demand to see the relatable media and content.

  • Ditching the copy & paste method

O Boticario has set a mark in website localization with their channels like .es and .com sites. It provides an engaging digital experience with localized content and global translations based on the customer’s shopping habits and locations.

  • Fully translated product information

Investing an extra time in the translation of product information can help build trust with the local customers. Also, localized content for product boosts SEO page rankings. O Boticario has product page information in English, Portuguese and Spanish.

  • Seamless checkout

O Boticario uses First Data on all its sites for collecting the transactional data. This payment gateway extends global payments and can sync with other payment modes globally.

With such principles and strategies, O Boticario has proved a benchmark in the e-Commerce global market of perfumery and cosmetics.

 

Vivino: Wine Delivery across the globe

Founded in 2009, Vivino is an online review and marketplace for wine globally. It all started with a simple iPhone app for the residents of Denmark. With time, it scaled its market values and aged like wine only to get better.

Vivino is a global marketplace for varieties of wines. It has one of the largest databases of wines in the world. It has nearly 7 million users and more than 3 millions of wines with quality taste. It has offices in India, Ukraine, U.S., and Denmark.

The founders have leveraged the opportunities of the e-Commerce business that within a short time, they started spreading across every major country. Today, around 5% of wine sales are made and Vivino holds a major share. It has localized wine e-commerce sites launched in the UK, The Netherlands, Belgium, Italy, and Spain.

Vivino excels in the online order and delivery of gourmet and wine across the globe.

Several strategies that the brand has accepted are:

  • Consistent presence across emerging markets
  • Localized language, content, and media
  • Understanding consumer preferences across borders
  • Localized product information, features, and reviews

Vivino has played smart in the networking and digital world. On the basis of IP addresses, it redirects its shoppers to their locations. This localization engages a number of communities in the local development environments.

Based on its product, Vivino has proved it truly values its quality and customers. “Wine only tastes better when old, likewise, this brand just gets better with time.”

 

Neon Poodle UK/EU

This brand is a leading supplier of long-lasting and affordable neon signs for homes and businesses in UK and Europe. It effectively manages localized inventories across the board. It has localized warehouses spread across the globe and that is what makes a smart move in terms of data and supplies.

Their Insights tool helps in merchandising the brand effectively for the local customers. These analytics and insights provide information about the demographics. It is vital information any brand needs to enter and spread in the cross-border markets. With social media, we track what the global customers demand. We scrutinize the customer behavior and their belonging domains and later take the next step.

Neon Poodle works differently than big, listed brands. It has spread its data warehouses first as per demands of localized markets. This helps the brand serve better and resolve shipping and delivery problems faster. With a big step, it has already won the game of cross-border expansions. The brand provides shipping to all domestic and international locations. However, only local customers can leverage free shipping and delivery.

Neon Poodle EU/UK understands what a local region needs and how the customers behave. They have effectively blended the technology and data to reach out to every corner of UK and Europe. Localized Data Warehouses, stock management and total landed costs are the key points to enter the cross-borders. This brand does it all and clearly wins the aspects of this expansion game.

Conclusion

Taking a cue from these top brands that have made it big in the world of cross-border markets can help you in every way. Today, they have reached the pinnacles with a strong foundation, plan, and strategies to empower their cross-border commerce strategies.

 

How to make cross-border commerce work?

Last updated on June 18th, 2018 at 01:09 pm

Cross-border commerce has been a hot topic since a decade now. Today, consumers have a better understanding about which brands to choose and where to buy from. They know when to compare goods and services online and get the best deals. Not all the goods and services are available in every country and due to this the consumers have to search the products in their country’s borders. This has perhaps increased the count of demand and supply in the e-commerce markets and sales. Also, this increases the competition amongst merchants and marketers as they fight for the space in the business of global expansion.

There has been a rapid rise in the B2B and B2C markets and services since past few years. The customers are becoming more familiar with this concept of online shopping. As per report from Pitney Bowes, borders are nowhere a barrier now for the shoppers to purchase online. Majority of the consumers make an international purchase of their favourite products at least once in a year. The availability of better quality and wide range of products, attractive offers and trustworthy reviews are few reasons that lure the consumers to shop online. If the merchants focus on these liabilities, they are sure to make their way into this venture in few years. Global market analysts predict that in no time cross-border markets is sure to take over the domestic markets.

To get everything into place, there are multiple challenges these international sellers need to focus on before entering the global market. To master the art of the cross-border e-commerce work, international merchants should focus on these points.

Some of these are:

  • Investments
  • Data warehouse
  • Study of Local markets
  • Climatic conditions and customer demands
  • International shipments and on-time delivery
  • Total landed costs
  • Political constraints and government laws specific to a region

…and many more. To make a big step into this global venture, merchants should equally pay attention to these small details.

International merchants should not plunge into the global market without proper analysis of the region and territories. They need to understand the local markets, laws and regulations before expansion. They simply cannot enter a territory or a country that does not have any cross-border e-commerce in the first place. They should analyse the requirements, focus on how the competitors have build their strategies to conquer and expand in the future world of cross-border markets. Observing this can help them set right decisions in the investments, data warehouse, shipments, product offers, promotions and much more. Once they understand these minutest details, they surely can make way in global expansions.

International merchants should build and maintain trust and transparency with consumers. Also, they ought to focus on the challengers these global markets pose on like the language barriers, currency concerns and a full-fledged marketing. It is important that the branding is correlated to the market and it sticks to its brand values. Along with all these concerns, there should also be a need to customise the international shopper’s experience. All this can be done in terms of the localised customer service, shipping and payment methods.

 

For instance, shipping continues to remain the most important aspect of cross-border expansion and also the most overlooked one. International merchants should be transparent with their shipping policies, charges. They should provide details like tracking, delay in delivery and shipping rates. Also, the wide integration with the payments methods is a must. In consideration of the domestic markets, utilize the payment methods which are locally accepted and recognised.

Thus, to create a larger impact and increase your brand’s values in the cross-border e-commerce markets, observe, take steps wisely and localise your customer’s experience.

 

 

12 Common Mistakes Done while Selling in Cross-border Markets

Last updated on June 7th, 2018 at 06:04 am

The rate at which technology is excelling knows no bounds. It is creating innovative ways to connect with the world every day. While technology continues to change the channels in the market, the connection between merchants and consumers keep growing stronger. With the advancement in technologies, still there are some common mistakes, merchants make while engaging in international markets.

Let us walk through each of these mistakes to overcome any pitfalls.

  • Avoiding to calculate total landed costs

It is necessary that merchants and buyers maintain a transparent relation between them in the cross-border market. Merchants should inform their international buyers about duties and tariffs. You can also use the TCO (Total Cost of Ownership) calculator.

It is mandatory to maintain trust and dignity amongst your international buyers. It can be evaluated in the following ways:

  1. Provide product tracking details
  2. Provide on-site shipping information details
  3. Update on delays in international shipments

 

  • Creating Big Technology Investments

Merchants while investing in the international markets should keep minimum technology investments. This holds true for the integration of third-party channels as well as international checkout providers.

We recommend you to focus on small investments first rather than the big ones such as:

  • Market Insights
  • Personnel
  • Logistics

 

  • Ignoring online frauds

There is always a risk of fraud when entering the cross-border markets. But you can always take help of the solutions to prevent such frauds and meet your business requirements.

You can prevent fraud during international checkout on-site with two methods:

  1. Installing a fraud suite
  2. Leverage 3rd Party Logistics to secure against fraud

There are several solutions Subuno, Riskified and Signifyd like that reduce such online frauds and provide secured payments internationally.

 

  • Copy & Pasting

Repetitive content and media cause a mess across the localized and international markets. This is a common mistake international merchants often make. Thus, it is better to avoid any copy and pasting media and content on your site.

It is necessary to focus on the potential language when localizing the content. You need verifying the media as poor on-model product photography can create a bad image in the market. Also, it can affect the SEO rankings for the particular region.

 

  • Dimensional and Physical Shipping Assumptions

Most of the merchants and eCommerce businesses fail to assume the dimension and physical shipments. If you fail to consider these, it can be a costly assumption.

  • Dimensional Pricing – Shipping costs based on the size of a box
  • Physical Pricing – Shipping costs based on the weight of the box

Thus, it is beneficial to include these pricings in the overall product cost to predict accurate marginal costs.

  • Disregarding Localized Merchandising

When selling products globally, merchants must consider some factors so that they can merchandise their digital stores.

Consumer Demand & Trends and Climate are the factors that affect the local merchandising.

 

  • Not Failing in Translation

It is critically significant to focus on how your website gets translated into different languages. It plays a crucial role in the localized and domestic markets. International sellers and merchants can consider using the translation providers like Smartling and VerbalizeIt.

These translation providers transform the way the content is created and consumed by the local and domestic markets.

 

  • Government and Political Constraints

You must be aware of the government laws in accordance with the countries and political constraints. It is mandatory to follow the government norms and data alliance while taking a plunge in the international markets.

For instance, in Russia, it is mandatory all the customer data must be kept on server in-country.

 

  • Disregarding Promotional Calendars

A mistake international merchants fail to notice. You have to prioritize the region of expansion and plan the marketing campaigns accordingly. Mark your calendars for the promotional events to be carried out.

In the Middle East during Eid, you can observe many sales events during shopping, entertainment, and traveling. Likewise, every region or country follows certain events and you have to keep that in prior notice to stand stronger in the international markets.

 

  • Don’t Go Overboard

Merchants often go overboard while engaging in the cross-border market. You have to consider the right aspects when selling the products.

It is better to focus on a single market and its essentials first before plunging into various other markets. This will help you learn from the mistakes so that you can implement the solutions while expansions.

 

  • Managing Efforts from a Distance

It is sometimes impossible to manage efforts from distances. While globalizing in the market, markets like India, China, and UAE, it is difficult to manage the resources. But markets like Western Europe and North America are more manageable. It is always recommended that you leverage the local resources in this case.

 

  • Marketplaces are not for the premium products

The fact about the cross-border markets is that the international shoppers shop more from the local brands and markets.

Today, the premium brands are opening flagship stores on the various social commerce platforms and local markets.

Avoiding such pitfalls always helps but if you successfully aim to ace the global markets, launch an international site. This in all ways localizes the site, content, and products. Not necessarily, all the brands go by this rule and even if they do so, they still make commit these mistakes.

Sell Global, Price Local – Pricing for Global Vendors

Last updated on June 4th, 2018 at 01:18 pm

There is no such thing as a “small business”. The reach of your business is limited only by your imagination. Thanks to e-commerce, a business no longer conforms to geographical borders. Every business has the potential to reach billions of customers from any nook and corner of the world.

Today’s marketplace is a global frenzy of international customers, online retail and cross-border shipping. While this opens up tremendous opportunities for enterprises, it comes with its own set of challenges. Businesses are finding themselves in a hyper-competitive environment.

Because of the international nature of business operations, decisions regarding matters – such as pricing – severely affect the bottom line. Sellers targeting international customers need to devise intuitive pricing strategies to maintain a substantial profit-margin. This needs to be done without losing the interest and trust of customers.

Read on to find out how your business can develop a rewarding pricing strategy to achieve international success. You will find this particularly useful if you are contemplating international selling on Shopify.

The advent of International E-Commerce

Increasing internet penetration and digitization of payments has made consumers more comfortable with online shopping. Statistics by Statista.com show that online shopping is among the most popular online activities. In 2017, ecommerce retail sales world
wide were as high as USD 2.3 trillion. By 2021, it is projected that ecommerce sales will amount to around USD 4.88 trillion.

Global B2B ecommerce sales are even better positioned – projected to exceed USD 7.7 trillion this year. A massive portion of consumers are making online purchases from businesses located outside their home country.

Power the Pricing Strategies

Deciding the right price for a product in international markets isn’t simple because pricing structures vary across countries. Businesses need to choose the right pricing strategy, such as dynamic pricing or VAT inclusive pricing by considering various factors that are unique to each international market.

Business revenue is directly influenced by the price at which a particular product is sold. If the price is unreasonably high, the product will not sell. If it’s too low, exporting it may not render enough profits and may in fact, result in a net loss. In either case, the business’ bottom line is at risk.

Elements of a Winning Pricing Strategy

When setting the price of a product for international markets, you need to consider the geography, culture, attitudes, market forces, local businesses, and purchasing behaviors of consumers. It is possible to come up with a winning pricing strategy if you make the following considerations carefully:

  • The perceptions and preferences of foreign consumers.
  • The problems posed by the foreign country’s laws.
  • Whether the quality justifies the export price set for the product.
  • Whether the demand for the product is dependent on the price.
  • Whether the government will raise any red flags regarding the product pricing.
  • The competitiveness and flexibility of the pricing as per market segment.
  • The pricing options available in case the incurred costs for the product change over time.
  • The discounts that can be offered to international customers.
  • The type of market positioning the business is trying to convey through its pricing.

Many Countries, Many Prices

The products of most successful brands have different prices in different countries. For instance, the Nike Epic React Flyknit running shoe that costs USD 150 in USA has a selling price of INR 15,995 (USD 238.95) in India. The same shoe costs SAR 699 (USD 186.40) in the Kingdom of Saudi Arabia and HKD 1,299 (USD 165.55) in Hong Kong.

So, while the shoe is a good bargain in the USA, it may not be the same in India. Such price differentials are a result of many factors like differences in the costs of production and transportation in different countries, differences in degree of market regulation, and variation in tax rates.

Many international sellers practice dynamic pricing, which means they set flexible prices for products according to the customer’s perceived paying ability. Dynamic pricing for international sellers helps to increase sales if they are able to offer the right price for the right product at the right time to the right customer in the right country.

When a product is sold in different international markets, their prices may escalate or drop. The escalation in price may be a result of a longer distribution chain or because the product is sold in small numbers which does not facilitate economies of scale. A drop in price may occur in cases where a local government regulates the pricing, making the market more profitable.

Whatever be the case, setting the proper price for each country ensures that the product is favorably positioned for each economy. It also caters to the needs of different segments of consumers and ensures revenue. Many apps for international sellers on Shopify such as the Multi Country Pricing app make it easy for sellers to adjust their pricing for different countries without creating new storefronts.

What influences the International Pricing?

The price differences across countries are not always in the hands of the manufacturers or sellers. Many other factors influence price differentials in different markets. Here is a round-up of a few such key influencers:

1.      Taxes and Duties

Local taxes and import duties make a big difference to the pricing of a product. For instance, automobiles and electronic products are expensive in Brazil because of the high import duty of up to 60% levied in the country. On the contrary, Japan is a cheaper place to shop because of the lower import duties and local taxes.

The price paid by customers for a product not only depends on the local taxes in the country to which you are exporting but also on the taxes in the country you are exporting from. For instance, if you are exporting from a country that levies VAT to a country that does not have VAT but levies sales tax, you will be taxed doubly because the exporting country will charge VAT while the country to which the product is imported will charge sales tax.

To ensure that your business remains profitable, you need to consider these tax differences across countries and set up a tax inclusive pricing. In countries that have a considerably higher rate for VAT, you can consider a VAT inclusive pricing as well.

2. Transportation and Shipping Costs

The costs of transporting and shipping a product also influence the final price of a product. If the country you are exporting to is far and the cost of shipping to that country is high, you may not be able to achieve a favorable profit margin. You should thus consider a shipping inclusive pricing while setting the prices of your products.

3. Size of Market

Another key factor that influences international pricing is the size of the local market. If the country you are exporting to is small, you may have to set a higher price to break even. If the country is fairly large and you can export a large number of products to achieve economies of scale, you can set the price with a lower profit margin for each product. You can experiment with not just country based pricing but also with region based pricing because the size of market varies drastically across regions.

4. Exchange Rate

One of the major disparities in international pricing occurs because of differences in the exchange rates of currencies. Similar products will be charged differently in different countries because of the different value of each currency that affects every part of the distribution chain. Moreover, since exchange rates keep varying over time, you may have to adjust the country based pricing.

5. Seasonal Fluctuations

Fluctuations in demand and supply also influence pricing. For instance, if you are selling a product for a festive season, you may experience an increase in the demand for your product. At such a time, you may lower the price to make a large number of sales and achieve economies of scale or escalate the price to make a larger profit per sale.

At the same time, you will also need to take into account the changes in transportation costs which also vary seasonally, especially if you maintain a region based pricing.

6. Pricing by Competitors

You will also have to consider the prices of other competitive products in each country. If the market you are targeting is large, you may have more competition and as a result, you may have to set a lower price.

A consumer searching for a product online is likely to compare the prices of various sellers and if you are charging exorbitantly higher than your competitors, you may not be able to make a sale.

Also, if you list a shipping inclusive pricing for your products, you may be at a disadvantage because your price would turn out to be higher than products sold by local sellers. Adjust your pricing competitively such that it does not offset your profit margin even if you include transportation costs.

Serve Global, make the price Local

 

Selling products internationally is profitable. However, you need to ensure that you are offering a localized online experience to your customers. To create a localized experience, you will have to translate marketing collateral and storefronts into native languages. You will also have to list the products in local currencies and enable checkout in multiple currencies. There are several apps for international sellers on Shopify that help sellers carry out these tasks with ease.

              How much is SAR 500 or GBP 800?

According to a survey, 92% of the surveyed customers prefer to shop and make a purchase on sites that list the products in their local currency. If you are not listing products in the local currency, you will lose sales.

This is because a customer will fail to trust your site and will be rather comfortable buying from another site whose currency he is familiar with, where he will be spared the math of converting prices from one currency to another.

When viewing products listed with a foreign currency, he may be confused about the final price he will be charged in his local currency after exchange. If this isn’t reason enough, another important rationale to set the price in the local currency is that you will be able to compete with the local prices of similar products instead of the price being randomly based on the foreign exchange rate. Thus, dynamic pricing for international sellers is a suitable option if the business caters to diverse economic markets.

Also, it is wise to set a tax inclusive pricing for your products to balance the taxes incurred from currency exchange. If you are an international seller on Shopify, you can use the Shopify Multiple Currencies Converter app to display prices of products in local currencies.

Who Buys in Japanese Yen when living in USA?

It is estimated that 13% of online shoppers abandon the shopping cart if the price is stated in a foreign currency. It makes sense because you will not be comfortable paying in Japanese Yen when you live in the USA, for example. Moreover, the customer’s bank will charge him a transaction fee for making a purchase in a foreign currency. Thus, your business may suffer because of mismatched costs and revenue, thus harming your profit margins.

If your customers cannot checkout in their preferred currency, your business will suffer. Enabling checkout in multiple currencies helps achieve better conversion rates. Sellers on Shopify can use the Multi Currency Checkout App to checkout in local currencies.

Setting prices for an overseas market may get complex. However, with the right insight and tools like multi-currency checkout and converter apps, you can win a fair share of the market. If you are a global seller, think local.

If you offer a localized online shopping experience and set the pricing by taking into account differences in local taxes, regulation, shipping costs, competition, cultural and market factors, your international business will grow by leaps and bounds.

 

How Pricing Factor affects your E-commerce sales

Last updated on August 22nd, 2018 at 11:41 am

We all have been in this situation. You went to buy a shirt from a shopping mall and then your eyes catches a flattery white cotton fabric shirt, you run your fingers across the shirt hold it up to your frame.

 Then you look for the truth that always keeps hiding inside the shirt (the price tag). Slowly you reach for it and twist it around to see the price. OHhh Noooo!!!. Maybe after some quick mathematics calculation (I’ll download “Avengers Infinity War” movie rather than going to the theatre”) you go through the details like color, body fitting, and size.

This is a very common offline behavior we do while going for shopping physically. It won’t be wrong to say that the same process is followed by us when we go for online shopping.

Yeah in online shopping no price is hidden inside your shirt, it’s clearly stated right next to the product you’re looking. If 50% is the users need for the product then another 50% is the price that will make the product more charming to be bought.

Today in this article I will be going to discuss what pricing factor is and how it affects your growth in E-commerce business. So let’s roll onto it.

According to PWC research here are some prime reasons why customers visits an ecommerce website:

  • ‎61% to compare pricing
  • ‎23% to participate in promotions
  • ‎41% to look for coupons

Smart Margins

The idea of setting prices of your products low is a total myth. In fact, you lose the price battle if your pricing is too low. If you are dropping your costs to a point where you are losing money, you should consider finding a healthier source, or alter your product offerings to include more profitable things.

Setting up your profit margin with respect to that it won’t affect your customer’s buying is a pretty complex thing. When you consistently keep your products price low your existing customer will always expect the lower price for your product, even when it is unsustainable to your business. As a result, you could lose those customers over time.

There are tools available to measure what price your competitors’ sets for a product. One of them is by “Pricing Lab” which monitors and updates prices automatically in real time.

 

Cost-Based Pricing

It is the easiest way to calculate what product should be priced at. This has two variants :

i) Full cost Pricing

ii) Direct Cost Pricing

-Full cost pricing takes into consideration both variable, fixed costs, and profit %.

-While Direct-cost pricing is variable costs + profit %.

Cost-based pricing is one of the most intuitive ways to set a price. Simple logic is that after calculating the costs of a product for your company, you just have to apply the profit margin you want to achieve. That way if cost of the product is 50 and the margin you desire is 100%, you have to price it at 100.

With cost-based pricing, there’s always a sense of relief attached, as you know that you are covering your costs and gaining some profit on all the work that you are putting in.

 

Dynamic Pricing

It is a pricing strategy in which prices are changed in response to real-time supply and demand.

Dynamic Pricing allows retailers to remain competitive 24*7 by price monitoring and changes, boosting profits by 25% on average.

This strategy is an old practice. In the year 2000, Amazon was experimenting with dynamic pricing: Whenever a user tries to view the same product even after deleting their cookies and web-history they were shown different pricing every time for the same item.

This was mostly used for loyalty purposes, existing customers were recognized and offered a better deal. The result, a feeling of being ‘special’ and an increased loyalty to the business.

 

Penetration Pricing

This pricing strategy is mainly used when launching a new product or service. Penetration pricing includes offering a very low price during its initial offering. The prices are intentionally set low to attract the new customer. Lower price helps to lure customers away from competitors.

Penetration Pricing strategy helps the retailers to make the customer aware of their new product in the market. The price entices the customer to try the brand new product.

Because of the low pricing your branding among initial customers who will then share your products review/feedback with other possible customers.

 

Psychological Pricing

“Odd” pricing tends to win more than “Even”. The ‘9’s magic is one of the most widely used and oldest pricing practices. Ending prices with .99 or .97, or a bit less than a round number, is a market psychology tactic that deeply affects shopping decisions.

It is found that the consumer perceives this odd price as being significantly lower than they actually are, as they tend to round them to the next lowest unit. For example:

As you can see in the above image that Amazon’s India site is also following the same practice of ‘9’.  All the pricing of the product listed there is odd or either ending with ‘9’.

Products pricing with 3.99$ got more chance to be sold than 4.00$ because mostly it is seen that value on the left (before the point) is what buyers interpret in their mind as the final pricing.

William Poundstone in his book Priceless, listed eight different studies on the use of charm pricing and found that on an average, they saw an increase in sales by 24% when they decided to use “Odd” pricing.

 

Smaller Fonts

No one wants to see the big large price in front of their eyes.

Research says that prices that are shown in smaller fonts convert better than larger font under the same display value.

                       Small font = small price (9.99$)

                 Large font = large price (9.99$)

Presenting the lower sale prices in comparatively small font resulted in more favorable value assessments and bigger purchase likelihood or choice than presenting the lower sale prices in relatively large font.”

 

Few Tips

  • Your buyers are experts to recognize the pricing. So try, to set the prices of your product as precise as possible. They even know the small difference between your products, and will understand why one costs 49$ and other 47$.

However, if you feel they are not that expert in pricing, do not make things difficult and set it at 50$  😉 .

  • As 99 is shorter and better than 100, the same way a price whose pronunciation is shorter seems lower to your buyers than a price pronounced longer. Twenty-five-twenty-eight dollars ($25.28) is worse than twenty-six-one dollars ($26.01).

 

  • As any startup is aware of the fact that, costs depend on sales volume. Sales volume depend on prices you set. Because your costs will change as you scale, pricing based on cost alone is a hazardous practice.

However, pricing based on cost also ignores something important, which is the value you create for your customers.

 

The Conclusion

 You first need to manage your focus on e-commerce pricing as it would mainly depend on what stage is your e-commerce currently.

If you’re just a startup, keeping low cost will probably have the biggest impact. But once you start getting bigger (increased visitors, a high number of sales) you can start working on customer retention.

In order to escalate your conversion rate you need to master your pricing strategy and your brand will be more efficient.

Wishing you all the best and good luck in your hunt for the right price !!

 

Tips: How Localization may help you in E-commerce

Last updated on August 22nd, 2018 at 11:51 am

There is a saying in Chinese   “万事开”.

What happened?

You don’t understand it right? Okay let me translate it to you in English, it says…

“All things are difficult before they are easy.”

The difficulty you faced while reading/understanding the Chinese sayings got easy when you read it in your native/common language. Same way it goes in the E-commerce business.

According to data by Shopify:

  • 75% of online customer want to buy products in their native language.
  • 59% of user rarely or never buy from English-only sites.
  • 67% prefer navigation and content in their language.

Your E-commerce company might be performing well at home, but when it comes to Global market, many difficulties may arise while growing your business internationally. And the prominent issue is localizing your Ecommerce store.

As you saw above that it was really difficult for you or anyone (who doesn’t understand Chinese) to read whatever it was written as it wasn’t in the known language of yours.

Well in the same way if your online store’s new audience doesn’t understand the language of the online profile, product descriptions, database-driven content, and graphic images, they would immediately switch to other website and look for a better alternative which is in their understandable language.

Therefore to grow your international E-commerce business you need to localize your e-commerce website.

But before that, you need to get the knack of what e-commerce localization is.

 

What is E-commerce localization?

It is an approach of translating the e-commerce storefront and all other contents of it into the language your new target audience can understand.

Many successful (e-commerce) companies are drawing their focus towards localizing their online channels as one of the ways to improve and customize their user’s (customer’s) shopping experience.

The opportunity to sell globally is huge. But to have a bite of it many global companies are looking ahead to improve the e-commerce game plan, exploring localized mobile apps, adding multiple languages and more.

If you are still reading this article, I hope you must have dipped your toes in the global e-commerce market. And you may also want to explore how localization of your e-commerce business can help your brand being successful.

Let’s start with the things that need to be localized before you go global.

1) Your Store front

When any of your online store visitor/customer opens up your online store he/she expect that the language, look and feel, of the website to be familiar (they know). So that they don’t face difficulty while viewing your store.

For example: When any visitor visits your online store and doesn’t recognize the language your site has then he/she would instantly leave your store and would look for a better alternative that has localized store-front.

 

2) Products and Description

Nobody wants to exercise their mind while doing online shopping to just translate the product description. The only thing that drives any visitor to your online-store is the products you sell there.

Therefore localizing that part of your e-commerce store will really be helpful to and your customer as well.

3) Currency

 Doing math at the time of shopping is just overwhelming. You hate that, I hate it, and everyone there just hates doing a calculation of converting the currencies in their local ones.

It is found that 92% of online customer prefer to shop and make purchases on sites that price in their local currency. Not only this, 33% of them likely to abandon a purchase if pricing is in US dollars only.

So as you can get the idea from the above data that reducing math calculation of converting the currencies in their native can genuinely increase your overall sales.

 

If you are having a store on Shopify there is an app named as “Auto Currency Switcher” which automatically detects the location of where your website, where it is being opened and changes the product price accordingly (in local currency).

4) Look and feel of your store

 Even though you have localized all the above things, you need to localize your store theme (look and feel). It includes all the color combination, type of product you sell when you target some specific group of an audience of a different country.

Here is an example of Amazon’s localization:

 

In Amazon India’s website, you can see that the design, color-combination, and product suggestions are totally different from Amazon’s China site.

Amazon’s India site

 

Amazon’s China site

So you can see that one of the world’s most successful e-commerce running business Amazon also believes in localization for their this success.

 

Localize User-Generated content

 Just for instance suppose you’re the customer who wants to buy a ‘Mobile Phone’ via online shopping. These are the things I guess you usually do:

  • Search for the product
  • Ask your friends/colleagues about the product (offline review).
  • Goes on the particular website and read reviews/ratings of the people who have already purchased the product. (online review)
  • If the percentage of a positive review is high you buy the product.

 

Likewise, your “to-be” customers highly appreciate the reviews which are being posted by your customer about the product.

Here a statistics from the infographic Review of Reviews  about the consumer behavior and online reviews say that:

  • 71 % of shoppers agree that online consumer reviews make them more comfortable that they’re shopping the correct product or service
  • 70 % of individuals consult reviews and ratings before buying the product
  • 63 % of people are more likely to purchase a product from a website if it has positive product ratings and reviews
  • Customer reviews create a 74 % hike in product conversion

 

 

Wrapping it up

Selling online is common nowadays. But if you want to outstand your international competitors you need to do localization of your ecommerce store.

Understanding these cultural and local desires with eCommerce localization is essential if you would like to succeed in the global e-commerce market.

Which of these tips would you apply to localize your e-commerce store?

 

 

The Omnichannel Strategy Fuelling Cross-border Commerce

Last updated on May 25th, 2018 at 08:43 am

Consumers are the real king in the world of cross-border commerce. They possess the power of choice. They have the freedom to choose whether to shop online directly from a retail website or from the online marketplace. They have the right to choose their preference over the multiple online channels. As per latest research, the phenomenon of “Online Local. In-store Global” is one of the driving elements of cross-border commerce. Many shoppers while traveling abroad often discover the brands and visit their offline stores. Later, they continue to purchase products from the brand store online.

Let us understand why it is essential to implement the omnichannel strategy for cross-border commerce.

Getting the payment options right

The payment options for online shopping vary from country to country. There is no widely accepted payment option used by a majority of the cross-border shoppers. It is very crucial to choose the payment options. This increases the chances of increasing significant number of online consumers. There are important factors the online shoppers and merchants should consider while selecting the payment options. Some factors are

  • Value of purchase
  • Service fee
  • The total cost of purchase
  • Purchase protection plan

As per a survey, credit cards were the most preferred mode of payment. Second to the list were the E-wallets that allow the consumers to store and access multiple payment options at one go.

Direct sales vs online marketplaces

Nearly, half of the consumers trust shopping through online marketplaces. They do most of their online shopping through marketplaces – be it local or cross-border. In top countries like Japan, China, Germany, and India, the shoppers make their most of the purchases with the cross-border marketplaces. As per reports, 75% of the global shoppers purchase their favorite brands and products from the retailer’s direct site.

While in some countries like Australia and Canada, the trend is direct-to-retail sales. Thus, the online retailers need to consider a broader approach to increasing their online market presence. For this, they have to accept multiple channels to reach a large number of global shoppers and increase their sales.

Huge Interest in cross-border commerce

The research suggests that cross-border commerce prevails to be the first choice among the consumers globally. Consumers often make about 95% of their domestic purchases online. However, more than 66% of the consumers have also contributed to the cross-border purchases. Countries that have the highest number of cross-border shoppers are Australia, Hong Kong, and Singapore. While there are still some countries like Japan and U.S. which are evolving and making their online presence stronger in the cross-border commerce.

Shipping and returns

Online shipping and returns are a major concern for both merchants and the consumers. There are certain elements that merchants always face challenges. They are

  • Shipping the right products
  • Order tracking and delivery
  • Transparent return policy
  • Proper custom duty and taxes

This issue becomes a more challenging task during the holiday season as most of the consumers opt for online and cross-border shopping. As per reports, India, Singapore, Hong Kong and China are among those countries with a large number of consumers opting for cross-border purchases. During holiday seasons, the consumer rush is more and thus the merchants and retailers experience a lot of challenges. There are constant efforts to bring improvements in giving the consumers a seamless shopping experience.

In order to grow the online presence in the cross-border market and strategize the omnichannel approach, consider the following steps:

  1. Integrate your findings
  2. Segment your audience
  3. Know your customers
  4. Prioritize the online channels and the devices
  5. Focus on customer support
  6. Measure your efforts.
  7. Create a premium customer experience

Conclusion:

Every cross-border marketer should engage the audience in a value-driven way to empower the cross-channel integrations. Thus, to provide a seamless and better customer experience, it is necessary to give your customers the first priority. Additionally, it is essential to analyze the sales in the marketplace and choose the right payment options. This increases your brand awareness and loyalty in the omnichannel cross-border market.

Top Market considerations to go Global through Cross-Border Commerce

Last updated on May 25th, 2018 at 08:44 am

Never in the history of the international commerce, trade has taken such a commendable leap in the sales and profits. This boosts the job opportunities, enhances the company’s prestige and offers a beneficial way for the businesses to expand. This also provides the businesses tonnes of opportunities and global exposure on a global platform. Whether it is a large scale business or an emerging startup aiming to go global, there is always a constant challenge to survive in this evolving market. However, there are certain factors that the businesses going international should take into consideration.

Prior to kicking off these factors, always consider key points:

  • Consumers: How can brands connect with intended consumer’s life?
  • Product: What value will the product add to their lifestyle?
  • Technology: Are you making the right choices in terms of technology?
  • Location: Are you making the right selection in the countries with the right set of investment?

So, before you embark on the journey of entering the cross-border trades, always consider these factors.

  • Conduct proper market research

Market research is an effective tool for identifying and exploring the best market that fits your product. Look at investing maximum time into a market evaluation. This gives you sufficient data and market insights while strategizing your go-to-market plans.

  • Define your business plan for entering the global markets.

Discussing, strategizing and planning is essential in order to define the business status, commitments and goals. This helps to enter the competitive global market and understand the strategies of your rivals. Determine which localized marketplaces you want to enter in. For instance, B2C, C2C or O2O fashion.

  • Choose the best product to hit the international markets

This is the most crucial factor in your company’s future depends on it. Choose your product or service diligently and wisely. Consider all the pros and cons of the product and its market analysis. Once done, plan and go for it.

  • Find cross-border customers.

First thing first. Without targeting your base customers you cannot proceed further. You should know who your customers will be. To start a business overseas, it is crucial to know them and where they reside.

  • Understand the consumer’s behaviour

A consumer rules the market. It is quite necessary to keep a track on their moves. If your target audience is youth, understand the trends and make investments accordingly. For instance, if the target is a 20-year old crowd, then in the U.S., merchants prefer more of Amazon than other eCommerce plans. But in China, it would not be the same. You might have to invest in a WeChat store or TMall.

  • Determine the investments for international expansion

Determine how much investment could you make? Strategize upon the ROI and the profit margins. Leverage all your market and data insights and analytics to make the right business investments in various international markets.

  • Do data analysis to predict how your product sale

Perform precise analysis of product sales as per specific geographic location. Understand the product rates and demands in the local markets of the countries. Decide how many units you would want to sell in a particular geographic location.

  • Build a website for a global purpose

Develop a website that has multilingual support. This helps to attract international customers and traders and communicate with them. Preferably, you can decide to choose English as the prime language and later on as you expand in the other geographical markets, you can add support for other languages.

  • Establish a method of export

Establishing a direct or indirect method of export matters a lot in the international business.

Businesses have to exercise over their ventures. Additionally, it is very important to seize an opportunity and plan a whole strategy.

  • Focus on pricing and determine the landing costs

Get customer reactions by testing out the product quality and price on them. Determine the landing costs, analyse later and negotiate if necessary.

  • Set up terms, conditions, policies and other financing options.

Set up terms of payment prior to product selling. Great businesses recommend not to sell an open account to a brand new customer. It is better to focus on the market policies for both local and global markets. And it is essential to check the financial options on the basis of the geographical areas.

Once you have a proper knowledge of these factors, the next step is syncing with the digital and physical experiences. This helps the merchants and consumers to get familiar with the brand and engage new buyers in the international market.

Conclusion

Regardless of the business size, cross-border commerce requires a significant investment of money or time and sometimes both. It is quintessential to focus on the landscape of where you are going to set up your business and what factors you will take into consideration. Together, these will aid to the critical components of success.

 

 

Consumer Returns Management in Cross Border Commerce

Last updated on May 25th, 2018 at 08:45 am

Cross-border commerce does not only rely on successful product delivery. Businesses also need to equally focus on the consumer returns management especially if local geography needs to be addressed. A well-oiled return management process has the power to exceed the customer’s expectations and fuels the business expansion process. This also ensures the brand loyalty. Hence, easy returns policy is the chief concern for any online shopper or consumer before taking a step into the online experience of shopping.

Let us understand why Consumer Returns Management plays a vital role in cross-border commerce.

Consumer Focus

The challenging part for any eCommerce business is providing a seamless shopping experience. There is also a constant challenge to improve the shopping experience keeping a focus on the consumers. This engages and retains the consumers in the chain. One such process in the chain is offering “hassle-free” returns to the consumers. eCommerce businesses should have the ability to offer lenient and flexible returns. This engages more consumers and retains the customer base with a thrust to expand the business. This also helps the businesses to function minimizing the risk of fraud and abuse.

Customer value and satisfaction

Any business whether offline or online should aim at clarifying the return policies to promote strong sales. According to the UPS survey, about 88% of the online shoppers check the return policies first and then proceed to shop. The rest will forgo purchases if they are unable to locate or understand the policies. Thus, it becomes essential to value the customer’s preferences and satisfy their needs.

eCommerce businesses have a variety of products to offer to the millions of customers online. They offer products and services for everything, right from fashion to electronics. Customers have the freedom to purchase from a wide range of the products. These companies can create opportunities in the competitive market with their accessible and easy return policies. This attracts the customers and they can leverage the online stores with the same old traditional touch.

Online shoppers should get the same offline shopping experience with the qualifying purchases. They have the leisure to check the product details before they add the items to the cart. Consumers and buyers can get the chance to check the minutest product details just like the traditional stores. Every product detail should include the product color, material texture, size, pictures and much more. Thus, eCommerce businesses have maintained the decorum that the offline businesses offer. They do offer exciting return policies that encourage the consumers to take a plunge into the wide shopping experience.

Fraud prevention

Fraud detection and prevention is the widest challenge in the eCommerce world. Businesses should keep a watch on the illegal activities if any. Those with the lax return policies might turn out to be great money for the hackers and criminals. To play on a safer side, eCommerce businesses should build definitive eCommerce return processes and policies. Also, they should maintain high-level security to avoid any such risks. Otherwise, they might become indelible marks on the names of reputable brands.

Efficiency in returns management

While returns will always be a crucial part of the business, they do not need to be a liability. To increase the efficiency and foster growth for your business, develop effective reverse logistics processes. This aids as a competitive advantage and can prove beneficial.

Hence, for effective returns policy, make sure you:

  • Create meaningful content about the returns process and policy.
  • Make the returns policy and process more understanding as per local demographics.
  • Offer flexible, convenient and easy options – such as in-store returns.

For businesses to redefine their returns management, here are some important points to focus on.

  • Focus on the global picture: Easy and flexible returns solutions should be available to everyone and everywhere. Businesses ought to focus on their current return logistics to manage the cross-border trade. They should be able to turn the local legends into international successes.
  • Make the returns process simple for online shoppers: Simplify the returns process and policies. This helps the customers to easily initiate the returns through calls or an online returns management portal. Businesses should provide 24/7 access to the customers through a customer service hotline.
  • Track your returns smartly: Know where your returns go when the customers send them. Businesses should aim at establishing cost-effective ways of determining the stocks and maintaining them.