Sometime this year, for the first time, Americans will no longer make up the majority of the Internet population, according to International Data Corporation.
And the impact of this shift on e-commerce will be striking: it is predicted that the U.S., which accounted for 76 percent of online commerce revenue in 1998, will account for only 55 percent of revenues in 2002.
Multinational by default
In short, if you're doing business online today, you're a global company -- whether you thought you were or not.
And that means you'll have to deal with multiple currencies, languages and business practices, or risk turning off a growing segment of the Internet market.
"There are not only big cultural barriers that will face you, but you will face stiff competition from very powerful retailers in those markets," said James McQuivey, Internet analyst at Forrester Research. "All of the retailers there are developing Web initiatives as fast as they can."
Most analysts advise that the first thing to do is make sure you've got your local operations running smoothly before you venture overseas. But some larger brands may not have a chance to wait -- the global market finds them.
Global explosion
For instance, Barnesandnoble.com has set up a relationship with German media firm Bertelsmann. But the company had been taking international orders for some time prior to that deal.
"At that point we had shipped books to 135 countries," said Ben Boyd, director of marketing strategy at Barnesandnoble.com. "One of the biggest surprises, as a company that was just U.S.-based, was that all of a sudden we were in 135 countries and wham! -- we were global."
Finding an overseas partner is one way to jump-start international operations. Another is to work off of existing international operations.
"You've got to have in-country distribution, negotiation and partnership skills. It's a very tough nut to crack," McQuivey said.
Getting personal
While there's a host of issues that need to be dealt with as an international company -- currency, language, tariffs, shipping -- companies say the biggest challenge is trying to achieve that same level of personalization they strive for locally to work on a global scale.
While it may work initially to have international customers travel through your domestic site, in the end, companies want to talk to consumers in their language.
"We don't try to build a French site [in the U.S.]," said Dave Dix, a spokesman for Dell Computer Corp. "We want the prices to appear in francs, we want there to be links to local ISPs, and other service providers."
For Dell, that means using resources located in that country, something many companies end up doing, either through their international operations, or by partnering or outsourcing.
"We want to be there [in other countries] the same way we're there for U.S. customers," agreed Ron Frey, Internet business manager at Lands' End. "It's a channel of distribution, and whatever channel they pick, we need to be there for them."
Learning the nuances
But simply translating the site copy and installing currency-exchange software may not be enough. Business practices that work fine in the U.S. don't always translate overseas, including some of the basic practices that underlie e-commerce.
"Some have alleged that the German culture of buying online hasn't taken off as well as the U.S. because of the credit card issue. It's not necessarily security, but the trust.
"You could be selling online, but your sales won't take off for a couple of months until you build a trust, unless you have a super-brand like Nike or Yahoo!."
Privacy primary in Europe
But relatively minor changes to e-commerce sites can go a long way in making international consumers feel welcome.
For instance, it was a big hit internationally when Lands' End began allowing consumers to store items in a shopping basket for later purchase.
The reason? Consolidating orders cuts down on shipping charges, which can have a much larger impact for those customers.
Telephony a boost
"You've just got to know the customer," Frey said. "There's things you can do in the U.S. that you do need to differently for international customers. You need to market differently, present differently. It all changes."
European consumers are also more reluctant to give out personal information than U.S. consumers, and laws overseas restrict the gathering and use of that data much more tightly than in the U.S.
The company also noticed that international customers were taking advantage of an Internet telephony feature that allows them to talk to customer support through the Web site. That's a big savings over international phone calls for consumers who don't live in an area with a local call center.
