Does International Growth require Replatforming?

Does International Growth require Replatforming?

Greenlight

The main reason that retailers change ecommerce platforms is to capitalise on the opportunity to reach markets outside of their main domestic trading markets. The rewards for those who do it correctly are huge, and in many cases it creates a gateway to generate incremental uplifts in revenue in a short space of time. But it can be costly.

The basic principles of going international are fairly well understood, after all –  “all I need to do is to add support for different currencies and have some translated product content, right?” That’s a phrase I have heard more than a few times over the many projects I have worked on.

However, the setup and management of ecommerce sites that trade in non-domestic territories may have completely different needs to domestic sites. Brands should consider how much effort is required to trade within these new territories, otherwise the return on investment is wiped out by the amount of effort and staff needed to continue trading effectively. In the UK there are certainly brands which are performing strongly in the domestic markets but their results are being dragged down by international performance.

There are a number of options to look at when setting up international sites to make sure the launch and the on-going management is aligned with whatever that particular strategy and business case is for entering new territories. The most common approaches are:

  1. A single site where a customer has the ability to select different currencies.
  2. Separate sites and product catalogues for each territory.
  3. Separate sites feed from a single product catalogue.

Each option has its pros and cons, and each must be weighed up on what the business wants to achieve in the short, medium and long term. I will explain each one in a bit more detail.

  1. Single Site / Single Product Set

This model is typically the quickest and easiest to setup and maintain. The retailer has only one single site to manage. Each product on the site has a different price-per-currency that is displayed depending on relevancy to the customer (typically via the site URL that the customer is viewing or the currency they have selected on the site).

Depending on the retailer’s ecommerce platform capabilities, they may also be able to provide internationalised translations of their product set and parts of their site content.

For platforms that don’t support this, there are a number of third party services that can provide manual translation services that manage and store the content for the retailer and inject it into the site when necessary, in real-time.

All of this means that the retailer minimises their site operations, and can use the same team as their domestic trading operations to manage the international site, where the only extra overhead is to provide more enriched data to support the new territory (currency and product translations).

Of course this can result in limitations to the  flexibility of the site content and trading for some retailers and business verticals. As all customers see the same site, the challenge arises to target specific content or execute international merchandising strategies as it becomes difficult to add content just for one specific region (different sale promotions, banners, etc.).

There are also challenges where custom business rules have to be added to the platform to cater for situations where some product ranges are not available in all territories. This then requires extra work to make them visible or exclude them at different points of the journey, in many cases leaving customers disappointed as they only realise something is not available to them at the checkout. The importance of ensuring that you manage each different territories customer experience effectively cannot be overstated.

  1. Multi Site / Multi-Product Set

This approach provides full flexibility but comes at a cost of exponentially increasing the operational overheads of your site estate.

With this model, each site and product set is separated for each territory. Ideally this will all exist on the same platform so that product enrichment happens once, then all that needs to be done is move the products to the right territory-specific product catalogues. Needless to say, common site assets and imagery can be reused where necessary. This means that each site can be individually managed from a merchandising perspective, albeit the product and site data can be derived from a central source.

Each site territory can have different products; most importantly they should have different site content, language, banners, structure and information architecture. While the sites can look the same, in general each one will have been setup to allow them to operate within specific territories, meaning a larger team on the ecommerce trading operations side to create the campaigns, site content and merchandising.

  1. Multi Site / Single Product Set

This approach attempts to combine the previous two approaches to provide the best balance for retailers. Here, the product set is only created once but each product has an attribute that allows them to be made available in multiple territories where they can be sold (or cannot if that is easier for the relevant product set).

In this case, the products are managed in one place but product attributes drive availability of products per site. This approach then has multiple sites but they all reference the single product set. This approach provides more flexibility than the first option but fewer overheads than the second.

Other considerations that can influence a retailer’s preferred approach depends on their strategy for international trade, which are not related to digital trading challenges but rather the preferred business operations: the franchise model. Typically retailers want a mixed model of the above when managing their digital trading online.

In some cases, they want territories grouped and traded as one and managed by one franchisee, but in other territories they want to hand over separate territories to different franchisees, or they may want to centralise control of certain site operations back at the head office.

The question for many retailers is “What structure should I start with?”. In answer to this consider the following:

  • Can your platform manage all the options above? (Ideally you should have a single commerce and digital experience platform to cater for all options)
  • What is your approach to starting international trading? Going into specific countries first? Grouping countries into territories and having a site per territory first?
  • Do you have the ecommerce staff to trade initially and how, if at all, do you see it growing as per the business plan?
  • Do you have challenges within your business with regards to regulatory issues, product range exclusions due to supplier contracts, commercial tax and delivery overheads?
  • Do you plan to franchise?

The point is that it is possible for the model to evolve depending on the business plan. You can start with a simple structure and a smaller team at the start, and if a particular country or territory becomes successful, then further investment can be made to allow that site to be independently tradable (as per the mentioned models) while increasing the operational capacity to capitalise on the opportunity. That means that the decision as to whether you should replatform or not remains based on that strategic choice: how do you want to operate, what elements does your strategy require and what are the cost/benefits to your business of replatforming.

There is one final thing to consider when you have launched your chosen site structure – don’t forget to market it!

A new international site will just sit there, receiving minimal traffic without the right digital marketing campaign behind it. It’s is important that the partner who implements the site does so in a way that ensures the execution of SEO, Paid Search and other digital marketing initiatives happens easily, efficiently and effectively. And of course, all of this ideally on a single ecommerce platform!

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Author Information

Kevin Murray

Director of Ecommerce

Greenlight

http://www.greenlightdigital.com/