Mind the Gap

I was commissioned to write this article for people interested in global marketing and e-commerce. Since internet practices change exponentially over time, a lot of this is outdated, so please don’t take my advice.

Mind the Gap
How to Do Business the Trans-Atlantic Way

Although we may appear to speak the same language, the United States and the United Kingdom are about as different as apple pie and plum pudding. And when it comes to doing business in both countries, your best bet is to be as thoroughly prepared as possible, lest you bite into something that turns out to be a nasty surprise.

Commerce across cultures is never easy, but you can boost your chances for success by understanding the differences (and similarities) of the consumers you’re trying to reach.

Security Blanket

The US leads the world in e-commerce, with $488 billion in sales in 2000, according to a report by Forrester Research. The UK, although ahead of most of Europe, did only $17.2 billion in sales in 2000.

One of the reasons for this is a lingering discomfort with the use of credit cards. According to Lara van Druten, co-founder of the European Network University in Amsterdam and Sr. Consultant in Innovation Strategies for origin IT Global, European consumers are mistrustful of credit cards and lack the American tradition of borrowing against what one doesn’t have and running up huge credit card debt. Also, US consumers, having a long familiarity with catalogue and mail-order buying, find it easier to make the leap to online buying.

Once the British do finally buy online, security is an even bigger issue than it is in the US. A study done by the UK’s National Consumer Council found that British e-commerce is hampered by fears about Internet security. Only 3% of Internet users shop online because they view it as riskier than brick-and-mortar. In spite of all the moaning and groaning about security in the US, half of Internet users have shopped online.

If you plan to win the hearts and minds, not to mention wallets, of online shoppers abroad, you might consider basing all security software and technology in the United States, where both the technology and policing is in place to enforce credit card security. Although the British typically are not likely to buy foreign, the Consumer Council study found that if they purchase online abroad, the US is their first choice. And this is in some part due to the sophisticated online security available in the US. You must create a secure online shopping experience that consumers can trust and that you can enforce.

Are You Being Served?

One area where the two countries are on the same pace is customer service, which pretty much stinks globally. In ZdnetUK, Tony Westbrook writes that 40% of UK e-commerce users are disappointed with their shopping experience. In the US, about that same percent of online purchase attempts failed altogether. In both countries, the technology press is filled with dire warnings to etailers—get your customer service act together or watch holiday spending go down the tubes. If you can provide top-notch customer service you’re ahead of the curve in any language.

Both US and UK online shoppers have made it clear they want to be able to pick up the phone or knock on an actual door and have a real human address customer service concerns. As a company doing business internationally, your best bet is to establish local in-country customer service teams that provide a real, not virtual presence, and that speak the same language as your customers—literally.

Hello, This is Your Web Site Calling

Interestingly, the UK and Europe as a whole have surged ahead on one area. In what van Druten calls the “WAP revolution” she notes that Europeans are “wireless-mad,” and addicted to their mobile phones. Think about following the model of that Ur-site of all global sites, Amazon. In a recent press release Amazon makes a point of stressing their wireless capabilities: Amazon Anywhere is the leader in mobile e-commerce, providing access from anywhere in the world to Amazon.com, Amazon.co.uk and Amazon.de on personal digital assistants (PDAs) and through handheld wireless Internet devices that use HDML or the Wireless Application Protocol.

Any US business hoping to take on the UK market will have to consider the wireless market—which is becoming the single most popular online commerce technology.

Blue Light Special on Wellies

Perhaps the most elusive challenge a trans-Atlantic business will face is actually offering something foreign consumers are interested in buying from you. Why, for example, should a fashionista in New York City buy her cashmere from a site based in London? And does anyone in Wales actually want a World Series poster? Do you offer the same product to both markets? Do you step in and compete in an already existing market? Tough questions.

So far, UK e-tailers have not tried to compete aggressively in the US market. According to Charles Levin, president of Pathfinder Consulting Group, a web development company doing business in both the US and UK, the British see themselves as slow to mature behind the US in the e-commerce. They tend not to try to compete with US sites as much as watching what the US is doing and then ‘borrowing.’

One example of an English icon that has tried to make inroads in the US is Harrods, a brick-and-mortar institution and tourist destination. In the hope, perhaps of bringing a little plum pudding to the New World, they opened a US site, oohed-and-aahed over in the glossy magazines. Except for one thing—the site is currently down and in redevelopment. Just in time for the holiday shopping season.

What the Heck Are Wellies?

Amazon, however, is an ideal example of a US company moving successfully overseas and they’ve used several methods to accomplish this. When they moved into the UK and Germany, they acquired existing online booksellers to be their base of operations, creating an instant local presence. They coupled this with a strong brand identity known for exemplary customer service and ease of use. It’s a strong one-two punch: “Hey, you know how good we are at selling books AND we’ve got a whole team to serve you just down the street.” In this way, they’ve effectively dealt with both the security and customer service issues as well as that pesky product-line issue.

In speaking with Peter Kooiker, a marketing expert who has worked with several local retail chains across the US, we’ve come up with what may be the most sensible model for determining what will sell where: in the same way that brick and mortar operations do their research to find out what local consumers will buy, an online business must develop a product line that fits the area. Think of your site as another store and sell what the locals want to buy. Whether you do this the amazon way—by acquiring or partnering with a local presence or you do it by extensive research and marketing in the local (and in this case we mean national) market—you simply cannot afford to ignore the importance of offering an appropriate and enticing product line.

So, Now What?

If you’re going to succeed in becoming a global, or even a transatlantic online presence, you have a few real issues to consider and decisions to make. Are you going to try to be a one-site-fits-all or are you going to open your “stores” in several locations? The single best bet is to do a bit of both.

According to a recent Forrester Research report, companies planning to do business internationally should build a global, centralized infrastructure that includes the capability of customizing applications to meet local needs. “A core set of software will provide a global, corporatewide foundation for all sites in any language… In-country teams will customize applications to meet local needs…and to support multiple tax and payment frameworks and are anchored by a worldwide publishing system.”

This may sound ambitious, but by providing a consistent, reliable framework of purchasing and service, and content specifically appealing to the local market, you’re positioning yourself to be the next Amazon. Or at least the next worldwide purveyor of plum pudding.

Sidebar: A Honey-Do List for Trans-Atlantic E-tailers

• Create secure online purchasing and enforce it.
• Lousy customer service is global. Stand out with superior service.
• Think wireless.
• Know your market—branding and product lines.
• Plan globally, act locally.

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