While the pandemic threw the global economy into chaos, many Australian retailers have experienced unprecedented and explosive growth thanks to a dramatic shift towards digitisation.
From online food delivery to activewear, many eCommerce businesses across the country have shaken off the COVID-19 uncertainty and are booming, both at home and overseas. Sales at many pure-play online and omnichannel retailers more than doubled last year alone, buoyed by demand from consumers who had never before shopped online.
Despite growing technology adoption and online retailing, eCommerce businesses still face considerable roadblocks when looking to scale. For example, operational challenges like handling inventory and order fulfillment, minimising downtime and managing international payments impact the ability to go global. This is in addition to already tight constraints around budget and resources.
In a post-pandemic world, it has never been more important to capitalise on emerging market segments and new revenue streams. So, how can eCommerce businesses ensure their go-to-market strategy meets these challenges when entering new regions?
1. Scale global inventory and order fulfillment
As you begin scaling your business globally, it’s inevitable you’ll receive a growing number of orders. However, if shipping takes longer than your competitors or you’re constantly ‘sold out’, you could lose customers and damage your reputation. Particularly as customers now expect next day delivery and real-time customer service.
Therefore, planning for rising demand through inventory and fulfillment management systems means you may need to outsource your fulfillment to a third-party centre.
In addition, building strong wholesaler relationships is key to creating a localised network of inventory in each market. Customers often prefer their orders being fulfilled locally and tapping into existing distributor networks will ensure your fulfillment process is managed with local expertise.
2. Minimise downtime on global promotions
Make sure your website or eCommerce store is prepared to handle an influx of customers, particularly during sales and holiday promotions.
If shoppers are contending with slow load times, delays, crashes or error messages, they’ll likely move to a competitor, and it will be near impossible to get them back.
It’s important your chosen eCommerce platform is designed to handle large traffic volumes and a robust customer support system. The closer your website is to 100 per cent uptime, the less impact it will have on customer sales numbers.
In addition to minimising downtime, your website should also be optimised for international channels by localising currencies and language. Visitors should be able to view pricing and transact in their preferred currency.
Not only will this keep things simple, cost-effective and streamlined for your customer, it will offer you an invaluable and accurate data stream into how customers use your site, and the kinds of inventory you should be investing in for different markets.
3. Managing international payments
Choosing scalable financial infrastructure can be the difference between daily customer frustration or a smooth, localised process that moves customers seamlessly through the sales funnel. As mentioned, collecting payments in your customers’ preferred currency is crucial. It helps build trust and a positive overall customer experience.
Unfortunately, it’s common for expensive FX rates and international transaction fees to eat into the profit margins of eCommerce businesses looking to scale globally.
For Melbourne-based retailer Orbitkey, this was a key roadblock when transacting with their global wholesalers. Currency fluctuations and transfer rates were not only a growing expense for the company, but for the wholesale customers too, who were forced to pay as much as $AUD37 per transfer.
Using a local bank account across different markets helps to manage international payments and reduce overall costs. By implementing Airwallex’s multi-currency Global Accounts solution for example, Orbitkey now has a platform that enables fast transfers by integrating with key payment providers and online marketplaces.
When choosing a financial solution for transacting across borders, it’s crucial the platform can scale as your business grows. This way, you have a single login to view global cash flow and don’t end up with multiple bank accounts for each new market.
The world’s dramatic shift online presents a great opportunity for retailers to capitalise on new markets and customer segments. However, developing a clear and thoughtful scaling strategy is required. Considering how you’ll manage inventory and order fulfillment, downtime on your website or store front, and your financial architecture to avoid international transaction costs will keep customers coming back again and again.
Neil Luo is vice president, global head of SME at Airwallex