Global consumers in BRIC countries give retailers one shot at developing a successful buying experience with them. Furthermore, a bad experience from the consumer could kill a brand.
Where can retailers make the first impact? Checkout.
The top two reasons for abandonment at the checkout are uncertain conditions (32%) and no preferred payment method (30%).
Many retailers look to simplify the checkout process by working with market aggregators that supply them with a perceived entry into the global market.
The problem with this approach for main brand retailers is that if they are not the merchant of record, the terms and conditions of the sale and flow of checkout are owned by the aggregation company. In emerging markets this doesn’t fly. With uncertain conditions you lose your customer and more importantly you lose their word of mouth and the social commerce ripple effect.
This is huge. Word of mouth is one of the most important indicators of future project success in BRIC countries. Research shows that in emerging markets such as China, consumers are, on average, twice as likely (71% of Chinese consumers) to be heavily influenced by recommendations from friends and family on the web.
The second most common cause of an abandoned purchase is not offering the customer’s preferred payment option. Preference for various alternative payment products can arise due to differing local market sensibilities and preferences, such as a lack of local banking infrastructure. This is often strikingly different from card payment models and is strongly driven by alternative payments in some markets.
In particular this includes such payment options as eWallets Ali-pay in China, and Yandex in Russia or cash based solutions like Boletos in Brazil. This variation in payment alternatives is due to a lack of trust in the local banking systems or lack of banking infrastructure. In many ways, if you are not offering these alternatives, you are simply not present in the country. It’s like having a brick and mortar location with no way of paying for the purchase – no cash register.
Think of it this way… Do you want your store to be in the sketchy area of town?
If you were to open a brick and mortar in a sketchy area of town (uncertain conditions at checkout) and you don’t have any way of accepting payments then what percent chance of success will your store have. 0%
Launching a brand globally has tremendous upside but it also carries hidden risks. Checkout is only one of these risks, but it is a crucial part of the retail value chain. It is important to identify those risks before entering the market. GlobalCollect provides global expertise around checkout optimization, payments and fraud.
For more information please contact me at carl.miller (at) globalcollectusa.com.