Solving the 7 challenges of cross-border ecommerce with a headless platform
Fashion and lifestyle brands need to scale globally and offer their customers localized shopping experiences – different languages, currencies, and payment and delivery options that best suit their needs. This growing need poses a new range of challenges for modern ecommerce platforms.
Cross-border ecommerce brings considerable business opportunities to fashion and lifestyle brands. When done right, it enables them to reach new customers in new markets and discover untapped revenue streams. However, successfully executing an international, cross-border strategy requires preparations, as it will have an impact on your operations, customer care, and legal and financial decisions.
On top of that, you’ll also be facing issues around:
Market and cultural differences
The good news is that with the right ecommerce platform provider, you’ll be able to implement and run an international ecommerce strategy in an efficient way.
In this article, we’ll cover the major pitfalls of cross-border commerce, and how a headless platform, such as Centra, can help you avoid them.
Why legacy ecommerce platforms aren't built for global brands
Ecommerce used to be dominated by global multi-brand retailers like ASOS, Zalando or Marks & Spencer. But the smaller, mid-market multi-brand stores were usually local players that acted in one or two countries. As a result, most of the ecommerce platforms from those days were built to fit the needs of local multi-brand stores. The platforms were typically all-in-one, suite solutions that offered a lot of integrations and features out of the box – but zero to very little flexibility. Also, since the majority of the multi-brand stores that were shopping for ecommerce platforms used to be local players. They were not thinking about, or prioritizing developing features for selling globally.
Some ecommerce stores attempted to develop and tweak these platforms to fit a cross-border strategy. But in most cases, they ended up being an expensive development project that became costly and difficult to update because of version and vendor lock-in. In addition, the back ends of those days weren’t designed to efficiently administer logistics, currencies, taxes, and languages for multiple stores, which stacked up hours of work – and a lot of headaches for the teams responsible for managing them.
That said, legacy and monolithic platforms weren’t built for cross-border ecommerce with all its intricacies and demands that brands want to address.
But the industry has evolved rapidly with the rise of direct-to-consumer ecommerce, and the market's requirements have become more sophisticated and complex. Multi-brand stores are on the decline. Instead, digital DTC brands are using modern, headless ecommerce platforms to take full control of their long-tail potential, protect their brand equity, and increase their profits by selling directly to their consumers across the world.
Modern brands aim for design freedom to create unique storefronts. They look for native features so they don’t have to install multiple apps, but can build a setup that is simple to integrate with other tools, whenever necessary.
Finally, brands demand scalability and flexibility to reach their customers across borders. Only then you’ll be able to localize content, deliver products to any destination, and let consumers choose the currencies and payment options.
Cross-border ecommerce challenges and solutions
Taking your ecommerce business across borders is no easy feat. Brands face numerous challenges, from meeting the consumers’ delivery expectations and offering websites in multiple languages, to managing tax compliance.
But the right approach and business partner will help you manage this project as frictionless as possible and drive your business's growth.
Let’s dive into the most common obstacles ecommerce brands tackle in cross-border projects.
#1 One site available in multiple languages with tailored content
Gone are the days of serving all visitors the same content. As you roll out your ecommerce store for the global audience, think about the language and image localization.
Translating the content and language on your store for your most important markets is a must-have if you want to build solid relationships and drive up conversion rates from visitors on these markets. Browsing a website in their local language makes customers feel at home and encourages them to navigate your site, engage with the content, and, most importantly, buy your products.
A global research study by CSA says that 40% of consumers won’t buy in a non-native tongue. So, if you don’t localize your website, you miss the opportunity to sell to a significant part of the market.
Also, a well-localized web store can improve your SEO. Language plays a big part in how your store ranks in search results. For instance, a keyword in one language may have a different equivalent in another. People search online in numerous ways. The most popular product or brand in France might be lesser-known in Egypt.
However, before you translate your website into any language, analyze it. The internationalization SEO expert, Aleyda Solis, recommends first identifying your leading markets and languages that bring you the highest traffic, rankings, and conversions. This way, you’ll better allocate your resources and focus on sites with higher search potential.
Creating a multi-language site with content tailored to visitors in different locations, and optimized for search, involves ticking a lot of boxes, so make sure to partner with a platform vendor that makes the process of ticking these boxes easier.
Solution: Support for multiple languages
Modern ecommerce brands struggle with going global because many monolithic ecommerce platforms lack the flexibility that enables it. That was the case with Stronger, a fashionable activewear brand. They wanted a flexible platform that would let them customize and localize each store based on visitors’ local preferences – launching on the Centra headless commerce platform helped them achieve it.
Stronger’s store with the main content of the website localized based on the visitor’s location
Stronger enables its visitors to choose the website’s language and location, separately. In the above image, customers in Canada can see the site in French, or pick any other language.
Now, Stronger can publish different content, images, products on all markets, with control of everything from one back end. It’s also possible to create different descriptions for stores based on languages, but use the same images globally. The same rule applies to other settings such as:
By translating any product name, description, alt tags, or folders into the local language of target markets brands can optimize their SEO efforts. Also, use images and time zones relevant to your consumers in different locations.
#2 Market and cultural differences
Researching your markets and the cultural differences that make them unique is key to successfully carrying out a cross-border ecommerce operation. It’s crucial to understand the local customer preferences if you want your localized website to make an impact.
Some of the most important market and cultural difference to take into account include:
Social habits and expectations
Seasonality and holidays are vital factors for planning your localized campaigns. For instance, most of the world celebrates the New Year at the turn of December and January, but in China it falls in February. Consider popular sales events, such as Black Friday, which happens at different times in different countries. Or think about Singles’ Day in China, or Les Soldes, France’s biggest sales in winter and summer.
Knowing your seasonality and holidays will allow you to decide when and what promotional campaign to run on your site, and whom it should reach to maximize your profits.
Another important aspect of localizing your site is displaying the correct local size charts on your website. As a fashion brand, your size charts can vary greatly depending on where you sell your clothing. By presenting products in the correct local sizes, you’ll improve customer satisfaction with your brand, drive conversions and avoid costly returns.
Addressing cultural differences with your website also means choosing the right models and images. Once you have done the market analysis, you’ll figure out what models, images, or media will appeal to a particular audience – and tailor your local sites and promotional campaigns accordingly.
Solution: Support for advanced price and campaign segmentation
Meeting all these localization requirements is difficult without the technology to support them. Fortunately, there are a few modern platform vendors out there that will help you succeed.
For instance, an industry specific headless ecommerce platform, such as Centra, has natively available features that let you segmentate and promote products and content for separate audiences – from one back end. The platform’s technology makes it possible to sell the same product in unlimited locations, at different price points. Say, you sell a certain product or its variation only in the chosen markets, for example, offer luxurious items at a higher price to a wealthier audience.
You can also merchandise products differently by country through custom campaign sites that show discounted products only to selected visitors.
Additionally, you can use price as a strong leverage. A study by Twilio Segment shows that personalized pricing and tailored campaigns have a positive impact on your business's bottom line.
For example, Centra has a discount engine that helps you optimize that leverage, in direct-to-consumer and wholesale. The platforms’ “if-this-then-that” rule-based system enables you to customize your discount to only apply to certain consumers under certain conditions which helps you convert customers without cheapening the brand.
Centra’s setup for Black Friday campaigns for selected markets
You also have the opportunity to choose from tons of out-of-the-box discounts, like coupons or cart-level price cuts that allow you to test and create promotions that drive revenue.
Also, Centra is an API-first platform, so integrating a third-party service that helps your business to optimize the online buying experience for international shoppers is, in most cases, easy.
#3 Managing different payment methods and currencies on one site
Most consumers prefer to buy in their own currency, with their favorite payment methods and trusted providers. But for ecommerce brands with cross-border ambitions to meet these preferences is problematic.
Give customers the payment options they like and trust
First, the online payment landscape gives many options, from credit cards, e-wallets, transfers, and “buy now, pay later” solutions, to gift cards. Consumers like paying with their own trusted payment service providers (PSP). But, the payment methods and providers often differ from country to country.
Localize your checkout
Second, currency rates constantly change, and converting currencies usually incur additional fees. A recent survey by Sapio reveals that you could see up to a 44% cart abandonment rate if you don’t localize the checkout experience.
All that makes the payment process complicated for your consumers as well. And the more complex the checkout, the higher the chance consumers won’t complete the online purchases.
Solution: Adding leading PSP providers to your tech-stack
Modern consumer-focused brands need an easy way to implement a payment gateway. It’s critical to let international consumers use payment providers they know and trust. That is also the goal of Stronger.
Stronger, built on Centra, localizes payment methods prices and prices based on visitors
Stronger relies on Centra’s back end to enable consumers to use their favorite payment methods and providers. The ecommerce platform combines payment methods from PayPal, Stripe, Adyen, Klarna, and Qliro to provide the best local payment solutions in every location. Plus, you can route payments based on the customers’ whereabouts to simplify the transactions, which ultimately improves conversion.
Additionally, with Centra you can use a local account with the PSPs, you can get better auth rates and lower fees. And if your PSP goes down your customers can choose other PSPs.
Solution: Managing multiple currencies
Stronger, as an international brand, wants to offer consumers products in local currencies on every possible market. This speeds up the transaction as buyers won’t be surprised with any unforeseen fees for currency conversion at the checkout.
What’s more, Stronger’s customers can pick the website’s language and see prices in their preferred local currency, based on the consumers’ GeoIP.
All these options are available in Stronger’s store built on Centra, which has a flexible back end and supports multi-currencies. This flexibility enables you to offer different products and prices in different regions, independently of language and currency settings.
Stronger’s online store, developed on Centra, displays prices in local currency based on the consumer’s location
#4 Cross-border shipping and delivery
Shipping and delivery are among the major challenges of ecommerce internationalization. You need to address the complexity of the process, which, among other things, includes:
Customs delays. Compliance with international trade laws and customs obligations is painstaking and time-consuming. The increased volume of international deliveries often leads to more parcels being held back, causing delays in shipment.
Global supply chain. The global supply chain is a complicated business system which requires syncing many elements to make product production and delivery possible. The system often suffers disruptions such as clogged ports, labor and raw material shortages, lack of shipping containers, or logistics network issues. Serious breakdowns in that chain cause shipping delays or even order cancellations.
Accurate landed cost calculation. Calculating landed cost is tricky as it covers the sum of all expenses for shipping the product, from taxes, commissions, storage, through freight charges, to customs duties. Getting it right is necessary to bring transparency and make sure there are no hidden charges for consumers when they receive the product.
Product returns. Returning products is a tedious and pricey process for brands. Shipping return items from abroad to home costs more than sending them back within the country’s borders. This can make or break a customer's experience.
In addition, ecommerce brands deal with increasing consumer expectations who demand swift and reliable delivery. Although consumers are prepared to wait longer for international shipments than for domestic shipments, a cross-border survey by McKinsey revealed that 32% of respondents expect carriers to offer faster and more reliable deliveries.
Consumers are also concerned about what condition their products will show up in when ordering goods from abroad.
The problem with shipping and delivery stems from the fragmented nature of the process and data silos created by the parties involved.
To solve this issue, all the parties need to work together, ideally on the same data sets to stay on the same page.
Solution #1: Order management system and connecting multiple warehouses
To make your cross-border efforts successful it’s essential to simplify and streamline logistics.
For this task, you’ll need an order management system (OMS) and a platform that supports managing multiple warehouses and other tools you use.
Order management system
Start with keeping your inventory up-to-date and align your business operations to it. This ensures international shoppers can order and get their goods.
However, managing inventory across numerous channels is complex, as it involves:
Coordinating orders and inventory
Calculating stock levels
Tracking sales and order fulfillment
Handling complicated shipping schedules
Reporting and analytics of order status
You can handle those challenges with a standalone order management system or one integrated in an ecommerce platform. In case of Centra, you’ll get a built-in OMS to track orders, sales, fulfillment, and inventory. Data is synchronized to other systems, be it warehouses, PSPs, transport administration or freight. That makes your brand operate efficiently since workflows are also integrated and managed from a single place.
Support for multi-warehouse
You’d need to connect multiple warehouses, so in case one of them lacks certain items you’ll route the shipment and deliver the product to your customer, even in peak seasons.
That’s possible with Centra, as the platform has a model for storing inventory and handles multiple warehouses. You can group warehouses to fulfill deliveries to the same market or, link orders to future incoming deliveries, to minimize the locking of inventory capital.
Managing multiple warehouses in Centra
The platform provides inventory allocations to ensure that warehouses with uncertain stock levels, such as brick-and-mortar stores, will have the products shoppers want. You can also connect Centra to stock inventory from regional distributors and retailers to fulfill orders.
In some cases you can use order splitting to break larger orders into a few smaller ones or send the goods separately.
All those methods and mechanisms allow you to predict how much stock you’ll need, and better manage your existing stock. It mitigates potential overstocking or overselling, which happen, for instance, during unexpected demand changes like peak seasons.
Solution #2: Local delivery services
Big carriers operating globally serve many businesses and face regulatory challenges. That slows down and sometimes halts product delivery. Incorporating local delivery options into your operations eliminates such problems.
Local deliveries don’t require compliance with certain legal requirements and are often cheaper and faster than international ones. Also, local deliveries allow you to provide click-and-collect options, which are gaining popularity among consumers.
On top of that, online shoppers feel more comfortable using delivery services they are familiar with.
Ingrid is a third-party delivery experience platform that offers plugin solutions as well as custom integrations to most of the modern ecommerce platforms today. Through Ingrid, you get access to most popular international carrier services, as well as the local ones. And that’s how Stronger enables its consumers to use local shipping options.
Stronger’s store, setup on Centra and integrated with Ingrid, provides delivery services based on the consumer’s location
Such an integration with your ecommerce platform enables fashion and lifestyle brands to offer a better customer experience and increase the number of cross-border purchases.
Solution #3: DDP shipping
When you sell to international shoppers, it’s good to provide delivery duty paid (DDP) shipping. The DDP option means that the sender pays the actual shipping costs, arranges the transport, and takes responsibility for potential risks until the product arrives at the destination.
DDP shipment reduces the risk of consumers being scammed – the seller pays all custom fees and taxes so your customers won’t pay more than what’s stated in the checkout. This solution protects the buyer and improves the buying experience.
By ensuring timely delivery and price transparency, you also avoid extra costs with product returns, which are higher in case of international shipping.
DDP shipping is used, for instance, when you ship goods from an European Union country to the country outside of it. Different ecommerce platforms can handle this differently.
#5 Data silos and broken processes
Cross-border ecommerce is most often decentralized. It cuts across teams, department processes, tools, cultures, and more. This tends to create data silos which disrupt the smooth flow of information.
Solution: All data in one place
Brands that want smooth operations and product delivery need to monitor their business’ performance. The best way to do that is with analytics software – preferably one that keeps data in one place, and makes it accessible across all relevant teams, helping you strategize and make informed business decisions.
Some ecommerce platforms force you to store data across various systems, which causes an information gap and makes it difficult to use that data. On the other hand, with Centra, it’s possible to plugin the platform into your accounting system, inventory management, warehouses, and any tool you use in day-to-day business. You also get a 360-degree view of an account activity, including orders, or abandoned carts.
With Centra’s built-in product information management (PIM) module, you don’t need to use other apps or integrations. If that’s not enough, you can connect Centra to your enterprise resources planning (ERP) system and enrich basic product information. You’ll be able to store and categorize product details, images, and videos, and then use them across all channels.
The platform stores data in one place, making it ready to create advanced reports or export data to BI software on your own.
Managing local taxes
When running an international ecommerce business, tax calculations are challenging. The problem is to understand the different tax rates in various countries and calculate them efficiently without slowing down your operations.
When selling your products to the US, you need to comply with a complex myriad of state and local taxes. Additionally, the US sales tax varies from state to state and applies to different products.
In the European Union, the major challenge is the calculation of value-added tax (VAT), which is different for each country.
Solution: Built-in tax calculators
The first step to handle taxes is to consult a tax advisor to grasp the ins and outs of the tax law in a given region. Next, find a tool that automates calculations within your ecommerce platform, so you don’t have to install another piece of software or add-ons.
Centra, for example, gives you a built-in global tax calculator. You can manage EU VAT, US sales tax, CA sales tax, and taxes in 60 other countries and regions. The tax due is estimated according to the ship-to country.
It enables you to offer more transparent pricing, saving your consumers from hidden costs at the checkout, and ensuring a better user experience. This transparency is essential as it impacts the abandonment rate. It’s been proven that shoppers who can’t see the total order cost in advance are more likely to abandon carts.
# 7 Competitors
Whether selling locally or internationally, you need to keep an eye on your competition. Your competition is not always a problem, but it’s important to get to know the other players and see how you fare against them.
Solution: Market research and competitor analysis
Market research, including competitor research, is such a broad topic that could be an article on its own. For now, we’ll cover the most important points to give you a good starting point.
Understanding the competitive landscape and your position is key. Keep tabs on your competitors’ strategies and try to understand what makes their product special and attractive to online shoppers.
Once you know the basics, it’s important get more details about competitors’ strategic approach, such as:
How often they sell promotional items
What social media platforms they’re on
What kind of support they provide
How often they introduce new products, update their website and blog articles
What are their most popular payment methods and providers
All in all, your task is to figure out your competitors' weaknesses and strengths. Once you know them, you’ll be able to devise your strategies accordingly. You’ll provide products and services that outperform those of your competitors’ or ones that are missing in a particular location.
You can do your own competitive analysis or hire experts who do it for you. Make such an examination a part of your marketing strategy and you carry it out systematically.
Setting up for success in cross-border ecommerce
The road to a profitable cross-border commerce is bumpy, but the benefits make it worth the effort. Expanding to new markets is a surefire way to increase your brand awareness, sales and revenue. You’ll reach your customers directly removing costly middlemen, and get a chance to outperform your competitors by filling the market gaps.
To grow your business internationally and minimize problems that arise in such an undertaking, you need to team up with a platform vendor that has relevant experience and expertise in this field. This increases the chances that your ecommerce platform will be an agile tool that’s easy to integrate with a chosen CMS, and offers all the customization and localization options you need to grow internationally. Supported by such technology, you’ll be well equipped to get your store running fast, and focus on your business development on a global scale.