Differentiate with digital

Cost-conscious international expansion

Zia Daniell Wigder
March 31, 2009

One of the major themes this year has involved how to tap
international markets without spending a fortune. While spending on
international initiatives continues to grow – some 60% of US online businesses with a global presence plan to increase web spending in 2009 vs. just 42%
of those with only a domestic footprint – there is a renewed focus on how and where this spending is being allocated (see our report on Global Website Spending). Retailers in particular have looked for ways to be innovative
in overseas markets while keeping budgets in check. A few examples of cost-conscious
initiatives that have come up recently in conversations:

 

Exploring
international shipping before launching global sites.
There has been a
great deal of interest this year in exploring international shipping (see Global Expansion Through International Shipping). With relatively few barriers to entry and a host of vendors providing solutions
to retailers interested in shipping internationally, an increasing number of
retailers are turning to this tactic as a first step into global markets. Over
one-third of online retailers surveyed are now shipping to Canada or other
markets around the globe – many others shipped internationally prior to
launching their own localized websites.

 

Translating limited
site content or translating only into select languages.
Global companies
tend to spend 25-30% of their web budget on international sites, with translation and localization being key areas of investment. As a result,
retailers with an international presence have looked for ways to reduce these costs.
Some retailers shipping internationally have translated landing
pages for international shoppers; other retailers have done limited,
tactical localization of their site content. One European football club with an online store, for
example, conducted market research on their fan base and decided to forego translation
into other European languages – instead, they elected to translate the site into a handful of Asian languages (more details on this example in our upcoming report on localization).

 

Investing in machine
translation.
Long maligned for its inaccuracies, machine translation has
reached a level at which it’s being deployed on some prominent consumer-facing
websites. TripAdvisor is currently using the technology for consumer reviews and
Intel has used machine translation in its customer service initiatives. While
machine translations remain far from perfect, interest in the technology is increasing given that many companies cannot otherwise justify translating large volumes of content.   

 

Selecting e-commerce
platform vendors that enable new sites to be launched quickly and
cost-effectively.
Finally, for those retailers who are planning to launch
localized sites outside of their domestic markets, the scalability of their
vendor’s platform has become an essential part of the vendor selection process.
As companies start to think more globally about their future initiatives, the
ability of vendors to roll out a series of new, localized sites efficiently and
within constrained budget guidelines is essential.

 

The majority of retailers seem to be pushing ahead with
global expansion plans despite the economic downturn, yet all are eyeing ways
to keep costs in check. Over the next year, retailers are likely to explore a
variety of new tactics to tap into international customer demand – stay tuned
for other examples of budget-conscious strategies for international markets.

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