Electronic Retailer - June 2011 - 54

BY YOLANDA COLEMAN KOKAYI

CHANNEL CROSSING: FULFILLMENT

Cracking the Culture Code
Going global is a hot topic invading boardrooms across North America. From fashion apparel to fitness equipment, brands are considering taking the leap across the Atlantic. Industry reports abound, forecasting strong double-digit growth in Europe for e-commerce, which drives DR and DRTV professionals to evaluate Europe’s market potential, especially key areas such as the UK, the Netherlands and Germany. But what does it really take to be successful in new markets that each has a different set of rules? The key is understanding that there is a significant difference between doing business in the United States and doing business overseas. So, where does one begin? In addition, customer support must be in the preferred local language, dialect and tone for each location. Not to do so can be a costly mistake. For example, French consumers prefer to talk to French-speaking CSR’s living in France as opposed to French speaking CSR’s living in Germany. Solution: Develop an infrastructure that supports consumer preferences and culture-based behaviors country by country. • Value Added Tax: Value Added Tax (VAT) is a general consumption tax paid by consumer in the European Union that is included in the purchase price. The laws in Europe for VAT vary from country to country. The way European consumers shop and pay is different right down to actual purchase price paid based on where the consumer lives. VAT ranges from the legal EU minimum of 15 percent upward to an average of around 20 percent. The seller is responsible for collecting and remitting the taxes to each EU country’s tax authority. Complexity exists in tax rate percentage variations among member states, and annual turnover (sales) limits that determine taxes due. Because of these variations, sellers must adjust their selling prices in order to protect their margin in countries with higher than average VAT rates. • Payment Processing: North American companies expect orders to be prepaid before shipment, with credit cards, checks, money orders or PayPal being commonly used. In some parts of Europe, COD is still used, along with a variety of regional credit and debit cards. Germany and Austria utilize open invoice, which allows the consumer to receive merchandise without any upfront payment. The consumer then has 14 days to pay through a money transfer from his bank. This type of payment method requires support from a robust

Knowledge is Key
The road to international growth is paved with good intentions by companies that are looking to offer the world their versions of the must-have product of the year. The companies showing signs of success in Europe are those that seek out the information and partnerships that give them a strategic advantage on which to capitalize. Critical go-to-market factors that must be considered are: • Language and Culture: Brands cannot simply do a U.S. version of their programs. They should consider consulting with a local resource to ensure that their scripts and offers are culturally appropriate and relevant. While there is little difference between the behavior and expectations of consumers in the U.S. and the UK, there are significant differences that must be considered when marketing to Germany, France and the rest of the EU. And even though English is spoken in the U.S. and the UK, it doesn’t mean that we use the same words to describe everything. For example, men wear trousers in the UK, and pants are what they wear under their trousers. Getting your message right is in the details. 54

electronicRETAILER | June 2011

Electronic Retailer - June 2011

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