Did you know… less than 1 percent of America’s 30 million companies export overseas? And of the U.S. companies that do export, 58% export only to one country.
With three-quarters of the world’s purchasing power outside of the U.S., global markets are ripe for channel acquisition.
SMBs may be challenged when accessing information and capital, as well as complicated taxes and high shipping costs. But new technology and third-party services have lowered barriers to enter untapped markets.
1. Assess channel opportunities
Before setting foot overseas, consider expanding to additional distribution channels such as online marketplaces, social media, brick-and-mortar stores (even pop-ups) or television. A smart omnichannel approach isn’t about bombarding customers with marketing material, but boosting brand awareness and product discoverability.
Consumers shop at online marketplaces – such as Amazon, eBay, FarFetch, Joor, Lazada, Etsy and Alibaba – for convenience, competitive prices and a variety of choices. Marketplaces provide huge opportunities for brands to dramatically increase sales volumes and expand their customer base without having to invest a ton of money in infrastructure, additional labor, training, and marketing.
Today you can own your own brand with a direct sales strategy through eCommerce and extend it dramatically through marketplaces. You can sell your goods on a nationwide or global scale.
Social media is another great sales channel. Over 50% of companies that use social media find that it increases revenue and sales. Instagram is a great platform for companies and brands that rely on visuals and storytelling, while Pinterest lets users save pins that contain links, descriptions and images onto different boards for later use. Product pins that contain images or videos of specific products can take users directly to a website to purchase. This tactic will get you the best ROI.
Instagram’s Shoppable Posts
However, the majority of customers (especially Baby Boomers) still shop in brick-and-mortar stores. Having a physical store, whether on a permanent or semi-permanent basis with pop-ups or galleries, gives you the opportunity to connect with customers face-to-face, allows customers to see products in-person and helps build brand credibility. A great location with steady foot traffic can also be hugely beneficial for sales.
Lastly, don’t forget television networks and digital channels such as QVC, the Home Shopping Network (HSN), Apple TV and Shark Tank. Why? Because as consumers, we’re always in search for a good story and great entertainment. Not only are they shown in millions of homes, but they also have strong mobile and eCommerce capabilities. At QVC, eCommerce accounted for $4 billion of global revenue for 2016. And according to HSN, about 43% of its $2 billion in annual digital sales are from mobile. Who wouldn’t want a slice of that?
2. Do your research
When expanding globally, “build it and they will come” is not a reliable strategy. Before you bring products to new markets, it’s crucial to understand your target audience for each territory. This means consulting with market experts on the ground to understand legal issues (such as creating new entities, tax implications and employee hiring), marketing, translations and shipping.
You will need to partner with third-party companies to get accurate product descriptions, establish regulations and work on currency conversions. Companies such as AMZ Europe can help with translations and marketing, while Pan European VAT can analyze tax and regulations.
Third-party logistics providers (or 3PL) can help with cost control and efficiency improvements in supply chain management for expanding multichannel and global businesses. Also with an international 3PL, you have the flexibility to test the waters in new markets without having to commitment to any major investments like your own warehousing space or staff.
3. Regionally and culturally-relevant marketing
Already Photoshopping your brand images and writing marketing copy? Hold the phone! What works in North America won’t translate directly in Asia or EMEA. You’ll need to rethink your marketing strategy and shopping experience for each local market you’re entering.
Questions to ask before marketing / communicating in new markets:
4. Invest in technology from the start
Choosing a system, especially a cloud-based one, that enables streamlined workflows is essential to putting global expansion into practice. The right technology can position your business for growth and scale without adding incremental costs or a large employee base. Not only will a central dashboard bring the world to your fingertips, but it can augment in market intelligence gathering and demand forecasting.
Expanding into new markets and territories can be daunting at first. There are many elements to consider and moving parts to juggle.
But going global is a really exciting venture for Commerce businesses looking to expand.
There are many tools, partnerships and strategies that can make it a manageable process. That process involves assessing available channels, market opportunities, executing culturally-relevant marketing and communications, and investing in the right technology and systems.
Stay consistent in your efforts, seek help to optimize and improve, and continually monitor your actions and results to ensure the best path for your business.
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