How To Develop Your Expansion Strategy | Salsify

Modern consumers around the world no longer limit their shopping to retailers in their home countries. They’re increasingly turning to international retail websites to find the best products that fit their needs and lifestyles.

For retailers, this means it’s more lucrative than ever to develop a global expansion strategy that enables you to reach new customers and grow your business.

This post will walk you through a few steps to create a successful expansion strategy — as well as some tips on how to overcome some common challenges you might face along the way.

Why Retailers Should Go Global

Since the onset of the COVID-19 pandemic, consumers have flocked to the internet to purchase products from around the globe. In this omnichannel marketplace, international ecommerce sales are expected to grow.

Online purchases of consumer goods — including groceries, apparel, electronics, and other household items — have increased. DataReportal’s “Digital 2022: Global Overview Report,” published in partnership with We Are Social and Hootsuite, shows that global revenues of this category increased by more than half a trillion U.S. dollars during 2021 (+18%), reaching a total of $3.85 trillion for the year as a whole.

PayPal’s “2021 Borderless Commerce Report” notes that online shoppers who purchased cross-border spent more overall than domestic-only shoppers. Two-thirds of French online shoppers bought from other European countries. And, in the U.K., approximately 26% of cross-border online shoppers said they bought online during Cyber Monday 2021, compared to just 17% of domestic online shoppers. 

Ecommerce websites will continue to be prevalent, valuable shopping channels this year. Insider Intelligence’s “Global Ecommerce Forecast 2022: As 2-Year Boom Subsides, Plenty of Bright Spots Remain” report predicts that worldwide ecommerce sales will exceed $5 trillion for the first time in 2022, accounting for over 20% of overall retail sales. 

Internet Retailer’s “E-Retailer Global Expansion Report” highlights Carl Asmus, former president and CEO of FedEx Cross Border. Asmus emphasizes the importance of cross-border selling, saying “Whether it is Singles’ Day in China or Thanksgiving Day in Canada, there are all sorts of special occasions that spur people to shop that we don’t have in the U.S.”

Expanding into international markets is also an excellent opportunity for retailers to improve their reputation, increase their competitive advantage, and more, notes Visa’s “Global Merchant eCommerce Study.”

3 Key Things To Consider When Developing Your Expansion Strategy

1. Select the Right Business Model for Your International Expansion

There are three main ways retailers can reach international shoppers: cross-border sales from a domestic ecommerce site, online marketplaces, and localized websites in other countries. 

Choosing the right business model for your organization is key to your success.

Cross-Border Sales From a Domestic Ecommerce Site

Under this business model, you’ll accept orders from foreign consumers on your main website — and work with cross-border fulfillment-specialized companies like FedEx to fulfill orders. 

Online Marketplaces

With this approach, you’ll use an online marketplace like Amazon or eBay that already has established shipping relationships with multiple countries worldwide. When you list your products on these sites, they’ll handle your shipping logistics, allowing you to focus on marketing and selling.

Localized Websites in Other Countries

Under this model, you’ll create a localized version of your site specifically for another country’s audience. This model can be tricky because it requires much translation work and cultural adaptation.

However, this approach can also be very rewarding if done well, as it allows you to connect with consumers in their native language while still retaining your organization’s identity across borders.

2. Build a Marketing Strategy for Global Ecommerce

A successful expansion strategy also requires a deep understanding of significant differences in consumer behaviors by country.

Consider how consumers in your target country think, what they want from their shopping experiences, and how they prefer to communicate.

Once you have a solid understanding of the above, start developing a marketing strategy that fits your target audience’s needs. This process involves tailoring your web presence, product offerings, and even customer service policies to each country or region where you plan on doing business.

It’s not enough to translate your website into another language; you also need to adapt its content for local audiences by using native-language keywords that reflect those countries’ unique products and services.

3. Build Your Cross-Border Ecommerce Tech Stack

Salsify’s “Consumer Research 2022” report highlights two critical findings for both brands and retailers:

1. Online consumers rely on digital information, even when shopping in-store; and 
2. Shopping will continue to be omnichannel in 2022 and beyond. 

As a retailer, a successful expansion strategy requires carefully selecting the right technology partners — and creating a robust cross-border ecommerce tech stack. This stack will need to support an omnichannel shopping experience and provide the agility to scale quickly.

Look for vendors with a proven track record of supporting expansion strategies. And consider providers that offer comprehensive offerings rather than just point solutions.

Crucial Elements of a Cross-Border Ecommerce Tech Stack

The following are some of the critical components that should be included in your cross-border ecommerce tech stack:

• A robust order management system that can handle the complexities of cross-border shipping;
• A powerful ecommerce platform that can support multiple languages and currencies;
• A comprehensive payments solution that can accept a variety of payment methods;
• A customer relationship management (CRM) system that can manage customer data across multiple countries;
• A robust shipping solution that can support multiple carrier integrations; and
• A product content management platform that can handle large volumes of product information, make this data available in multiple languages, and ensure content consistency across channels.

How To Decide Which Countries to Prioritize First

When expanding your retail business globally, you should consider the following factors to decide which countries to prioritize first:

1. The Size of the Potential Market

Prioritize countries with large populations and high disposable income levels.

2. The Level of Economic Development

Developed countries with stable economies and infrastructures are generally easier to do business in than developing countries.

3. Regulations and Restrictions

Some countries may have more stringent regulations that make it difficult or expensive to do business there.

4. The Level of Competition

If there are already a lot of retailers competing in the market, it may be more challenging to gain a foothold.

5. Your Own Resources and Capabilities

Consider whether you have the resources and expertise necessary to successfully expand into a particular country.

Once you’ve analyzed all the above factors, you can prioritize countries for expansion based on your organization’s specific needs and goals.

Challenges of Going Global (and Tips for Solving Them)

No matter which expansion strategy your organization pursues, you’ll always face certain challenges. But don’t let that deter you. With a little careful planning and execution, you can overcome any obstacle.

Here are some of the most common commerce challenges you should be aware of when expanding internationally, along with some tips on how to solve them:

1. Lack of Local Market Knowledge

Conduct thorough research to understand the ins and outs of the market you’re looking to enter. This includes everything from identifying the customer base and what they’re looking for to understanding the competitive landscape and your unique selling propositions. 

Consumer behaviors are constantly changing, so it’s crucial to remain up-to-date with any changes in your target market — allowing you to adapt your expansion strategy accordingly.

2. Language Barriers

If you’re looking to expand into a market where English isn’t the primary language, make sure you have a good understanding of the local language. This includes not only being able to communicate with customers but also being able to understand local regulations and requirements.

3. Fulfillment and Shipping

When expanding into new markets, ensure that your products can be delivered quickly and efficiently. This can be challenging if you’re unfamiliar with the local shipping infrastructure or you don’t have a good partner to help with fulfillment. 

Seek out a reliable shipping partner and be aware of any customs or import/export regulations that could impact your business.

Start Developing Your International Expansion Strategy

Developing a successful expansion strategy requires careful planning and execution. But by following the tips above, you can be sure that your organization is well-equipped to reach your target market successfully. 

Interested in learning how to create an omnichannel shopping experience that meets the shifting demands of shoppers worldwide? Check out “The Complete Guide to Omnichannel Strategy for Commerce.”