Consumer engagement is changing in the digital age. As technology continues to advance, so do consumer expectations. According to McKinsey, 71 percent of consumers expect companies to deliver personalized interactions, and 76 percent will shop elsewhere if they don’t like their experience.
Localization can help retailers increase conversion
Personalized customer experience will likely drive the next phase of e-commerce growth. Retailers agree on the importance of personalization, but personalization becomes challenging in a global economy where many online transactions are also international. One of the answers to personalization is localization. By tailoring to local needs and consumption preferences, brands can improve their conversion rate.
One of the first aspects retailers must look at when working on localization is local messaging. After local messaging, retailers need to focus on currency. Consumers expect prices that convert to the local currency, but also convert to a price fit internationally. Another key component on the journey to localization is payment methods. The United States and Canada have similar traditional card payments and debit and credit card providers. Outside of North America, there are many more alternative payment methods. Duty and tax are also a conversation for retailers working on localizing, as the way sales tax works in other countries is different. America adds sales tax after the transaction based on local taxes. Many European countries include sales tax in the sticker price, so there is no additional cost when you've purchased your item.
While some might think consumers have become fickler, others feel the expectation for this type of localized high-quality shopping experience has always been there. “Barriers for how to successfully sell across borders have always been there,” said Matthew Merrilees, CEO North America of Global-e., to FashionUnited. “When brands start seeing revenue coming from international e-commerce, they start thinking about how they reach their international consumers. The expectation for localization isn’t new, it’s just got a heightened focus. Now, retailers are thinking more with a digital-first mindset.”
Retailers need to figure out how to gear up their sites to knock down all the obstacles expected to come with localization. Once e-commerce is up and running, marketing budgets need to focus on certain regions and countries and analyze sales to utilize their market data.
What Merrile’s company Global-e does is aid with currency exchanges to make cross-border e-commerce simple and profitable for retailers. One of the biggest concerns retailers continue to have is offering a localized price.
Merrile told FashionUnited that he sees the next frontier of localization as, “An emphasis on international markets. So much has been done here domestically. U.S. brands are still adopting international localization. Retailers need to focus on things in individual markets that make sense, versus just throwing a singular thing out to the entire world carte blanche. The things retailers are asking themselves now is how do I run my business from a single instance website without having to replicate that digital footprint for every single market service. Retailers are breaking down all these complexities of maximizing their product categories, selecting relevant assortment, and positioning inventory. That’s where localization all starts.”