Expanding across borders isn’t as easy as setting up a domain and assuming consumers will buy. The level of personalization and customization that must be built into the customer experience requires an understanding of the market you’re selling into … and a plan to connect with that country’s consumers.
Language challenges are a major source of friction. If an ecommerce site is translated badly, consumers will struggle to trust the accuracy of the product descriptions and even the quality of the items. If frustrated enough, they’ll simply go elsewhere. If they do go through with the sale, language-based misunderstandings can lead to increased chargebacks and a poor reputation in the market—not a great way to launch in a new country.
To prevent this, websites and chat functionality should be available—and professionally translated by a native speaker—in that country’s language. For chatbots, in particular, it’s crucial to invest in excellent translation so the responses customers see or hear are in their language and make sense in context.
Keep in mind that in many markets, multiple languages may be necessary (businesses looking to expand into Switzerland, for example, will want to pay careful attention to language distribution among their target markets).
Customers in other countries don’t want to feel lost or trapped on pages with no idea how to get back to where they started without hitting the “back” button or simply giving up. That’s why search functionality may not be the best way to help consumers find products on your site.
Instead, use clear and intuitive navigation and filters. Fixed sidebar menus make it easy for shoppers to navigate from tops to accessories to housewares and back again without having to head back to the homepage or head to the search bar. Meanwhile, helpful filters like color, material, size/dimensions, or other product characteristics should make it simple for customers to add and remove filters at will.
Virtual and augmented reality technology has transformed how consumers shop online. Consumers can use their phones for retail sizing, testing paint colors and picturing how furniture will look in their homes.
This type of conversational commerce is perfect for experienced ecommerce consumers, such as most Gen Z and millennial shoppers.
However, too many technological bells and whistles may overwhelm first-time customers or older generations like Baby Boomers.
Many of them may still be learning how to use their phone and will be completely at sea if asked to upload a photo. During the pandemic, these were the consumers who struggled to buy groceries online during the pandemic.
So what should you do? Focus on function—for everybody—over form.
Make sure your website provides a great experience for both novice and experienced shoppers. Offering cool technology may be great for some of your customers, but don’t alienate the rest by forcing them to use what they don’t understand. (Instead of making customers upload a photo to “try on” an item, for example, why not offer different types of stock model images as a lower-tech alternative?)
When you’re selling into another country, your reputation means everything. Show consumers they can trust you by including social proof, such as:
For example, online businesses in the apparel industry can encourage customers to review their products, upload pictures of them wearing their purchases, and even share information about sizing, fit, feel and quality. This can go a long way in developing customer relationships: Not only will potential buyers see real, untouched photos of the item on real customers (a massive trust-builder), they’ll hear straight from their peers about whether the purchase is worth it.
There are enough variables that can get in the way of making an online sale happen. Don’t overlook the variables that can be prevented. Logistics fall squarely into that category.
Companies selling into another country need to understand how local sales tax and value-added tax (VAT) are calculated. A local vendor that offers multicurrency pricing can simplify international sales significantly.
While we’re talking about currency, consumers tend to want to pay in the currency that provides them the best deal. For example, Colombian consumers prefer to pay in pesos because paying in dollars is too expensive.
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Shipping can be a real challenge for cross-border ecommerce – not only because of the preferred local delivery services that vary from country to country, but because you’ll also have to take into account the realities of geography.
In Australia, where major cities are separated in some cases by hundreds of miles, there is no such thing as next-day shipping. While your Australian customers may know this, they can also have selective memory when making a purchase. Your best bet is to research and communicate estimated shipping times.
Another consideration is how the PNA has impacted shipping costs. What used to be reserved for holidays only is now standard with companies like UPS, FedEx and DHL Express. Each has added peak delivery surcharges at an average of 30 cents per package for customers sending numerous packages – something that became commonplace when all shopping went online. These surcharges aren’t expected to go away anytime soon.
Businesses also need to understand the nuances of local regulations and how they can affect their online presence.
From data and privacy protection to limits on what products can be sold in a specific country, companies should lean on local professionals to make sure their ecommerce sites comply with local laws. They also need to understand the – sometimes severe – penalties for noncompliance.
In some countries, a “localization requirement” requires that all collection, recording, storing and extracting of their citizens’ personal data must be done using databases on servers in that country. So if you want to sell online to customers in one of those countries, make sure you invest in local hosting services for that country’s consumer data.
Planning to sell into the European Union? You’ll need to be familiar with the General Data Protection Regulation (GDPR) – or hire someone who is. Considered the most grand-sweeping data privacy law in effect anywhere, it requires businesses to be vigilant with consumer data, how and why it’s gathered, how it’s used, how long it’s kept, and how it’s deleted.
Penalties for violating GDPR start at the 20 million euro mark.
If GDPR wasn’t enough, you’ll also need to accommodate PSD2 when selling into the EU.
PSD2, or Payment Services Directive 2, went into effect in September 2019 and requires Strong Customer Authentication (SCA) for all European Economic Area (EEA) electronic transactions. Essentially, what that means is when a customer uses a credit card to pay for their purchase, companies have to provide multiple ways to authenticate the transaction – much like two-factor authentication.
Where it gets confusing is knowing whether it applies to your business.
PSD2 doesn’t apply to most alternative payment methods, and it pertains to where the customer’s credit card is issued. Businesses should seek out expert consultation, to be sure they stay on the right side of any regulatory bodies.
Once you have your logistical ducks in a row, make sure your communication is as clear and easy to understand.
Customers who speak another language or practice different cultural customs need as much information as possible about what to expect so they can trust shopping on your online store. That starts with how you operate your business.
One of the most surefire ways to erode customer trust is to play “gotcha” with store policies related to returns, shipping and exchanges. Customers need to know what their options are before they make a purchase, and the language has to be crystal clear or you risk losing customers— especially when they are already struggling with language differences.
Clear communication also helps reduce friendly fraud, which has increased about 8% since 2020. In particular, return fraud tactics like counterfeit returns and “wardrobing fraud,” perpetrated by professional refunders, are becoming more popular.
When there is a legitimate issue, how easily can customers get in touch with customer service? This is where the customer experience can become exceptional … or frustrating.
Clear and easy navigation to the customer service page is important, but more and more customers seek out chat. Seize the opportunity to turn your chatbot into the digital equivalent of the helpful associate staying quietly within earshot.
Customize your ecommerce chatbot to follow customers on their buyer journey instead of simply bleating, “How can I help you?” on every page. Anticipating the questions a customer may have at every stage along their journey— especially if retention is at risk— can make a real difference.
For example, if a customer is asked “Are you looking for something in particular?” while they’re browsing, “Do you have any questions about this item?” while considering, and “Would you rather pay in installments?” during checkout, it will feel more like a legitimate interaction, which creates a sense of comfort and trust.
Add in some personalization based on past purchases, and customers will start to feel like they are interacting with their own personal shopper, increasing the likelihood that their browsing will convert to sales.
When we talk about the type of friction that can damage customer trust, the checkout process is where the wheels tend to fall off the cart— literally.
Why do consumers have a change of heart during checkout?
For starters, they find out exactly how much it’s going to cost to ship their purchase and decide it’s not worth it: Almost half of consumers say that shipping costs are their primary reason.
Another reason is due to hidden fees, which can be common when consumers are cross-border shopping. Local taxes and surcharges can cause customers to decide against a purchase.
Regardless of where additional costs are coming from, merchants need to make sure customers know upfront any additional costs that will be added to their purchase so it’s not a surprise at the time of checkout.
Choosing the right payment options for your ecommerce site is a critical step in establishing cross-border ecommerce trust. It’s tough to prove you understand a market when consumers in that country can’t find one of their preferred (or allowed) payment options to complete a transaction.
Here’s a quick guide to understanding the most popular payment options by major international markets:
Australians are quickly warming up to mobile commerce, but Australian companies seem to be slow in responding. This presents a ripe opportunity for businesses interested in selling into Australia. Of course, credit and debit cards account for nearly 50% of payments with digital wallets, bank transfers and cash-on-delivery remaining popular as well.
Across Asia, digital wallets are all the rage for a few reasons. First, credit card fraud is the customer’s responsibility in Hong Kong and China, making mobile payment apps like Payoneer and MoMo more popular. However, PayPal is gaining steam and will likely become the primary payment method in those countries. In Vietnam, 85% of consumers are still relying on the traditional payment method of cash-on-delivery.
French and Spanish consumers tend to prefer credit cards. In Spain, credit cards are used for 40% of online transactions. German consumers predominantly prefer PayPal, which is also popular across Europe—as are other digital wallets and alternative payments. In Greece, consumers pay with prepaid cash cards, which provide a convenient alternative to credit or debit cards.
North America
In North America, the U.S. and Canada are similar in that credit card penetration is high and digital wallets and other alternative payments are growing in popularity. The question is less about what type of payment is available to consumers but what are they using based on demographics and general preferences. This is where businesses really need to know their target audiences.
The LATAM market has a range of payment preferences, depending upon where companies are selling. Mexico’s banking and payment structure is quite different from the rest of the continent. Mexican consumers are wary of financial institutions because of hefty fees and poor monitoring practices. So, only 31% of Mexicans have credit. However, the transition to mobile is significant.
Argentina and Colombia, however, are two different stories. In Argentina, credit cards and paying in installments are most popular, while cash is still king in Colombia.
Read more about the Colombian ecommerce market.
More than likely, your ecommerce business isn’t targeting a single region, which is why you need to diversify. The more diversified and personalized your payment options are, the more likely consumers will trust that you understand their financial means and limitations.
Another consideration when it comes to offering multiple types of payment is generational. In ClearSale’s most recent original research report: Consumer Attitudes About Ecommerce, Fraud & CX 2021-2022, we found a definite divide between Gen Z/millennials and Baby Boomers when it comes to payment options.
The younger generations tend to have their phones in hand and pay using mobile wallets.
While the older generation is often at a laptop or PC and will reach for a credit card, even though they have a real fear of identity theft.
Knowing your target market and demographics will help you choose which combination of payment options will best suit your customers across borders and establish trust.
We can’t talk about payments without talking about fraud. Fraud protection directly affects your revenue and your site’s CX— making it a top priority for cross-border ecommerce businesses wanting to build trust with consumers.
Our research found that consumers take great measures to protect themselves against fraud and consider it to be the merchant’s job to ultimately protect them from fraud.
Since the pandemic began, fraudsters have taken advantage of increased transactions and new customers— especially novice customers who are less online savvy. Not only are fraud schemes like card-not-present (CNP) and account takeover (ATO) increasing, classic tactics such as triangulation fraud and phishing are making a comeback as well.
Companies selling into various world markets don’t stand a chance of tracking fraudsters down unless their fraud data is equally global. And they need to implement a fraud protection strategy so they can approve as many transactions as possible.
Without question, the biggest source of ecommerce friction is being declined. The last thing a business should have when selling into another country is a high false decline rate.
Inexperienced customers may assume that being declined means they did something wrong, they didn’t understand the language, or that their credit isn’t good enough.
An experienced online consumer, on the other hand, may try again. Or, they may decide to cross your store off their list of options— forever (and while they’re at it, tell their social media followers about their terrible experience on your site).
This is why trust is essential. Businesses have to walk a thin line. Their customers expect to be approved but they don't want to provide more information to verify their purchases. That's a real problem for any business trying to juggle fraud protection and customer experience.
So what can ecommerce businesses do? A few things, actually.
Companies can start with understanding how much fraud costs them and calculating cutoff points for automatic approvals.
They can avoid traditional "approve" and "deny" lists, which tend to circumvent the artificial intelligence and machine learning that detects global fraud trends.
Finally, businesses can augment their in-house fraud prevention teams with fraud industry experts. This type of scaling— especially, during peak seasons—can help companies approve more orders and deliver a better customer experience.
Cross-border ecommerce is a huge opportunity for online retailers.
To optimize success, be sure to:
Talk with a ClearSale fraud expert today to learn how our multilayered approach can help you build trust, increase revenue and safely expand into cross-border ecommerce markets.
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