Coming to America - Part III: E-Commerce

Coming to America - Part III: E-Commerce

We’ve helped a number of XUS brands across a spectrum of categories come to the Americas. The following “manifesto” is 
LOCC’s best practices for COMING TO AMERICA.

Part II focuses on E-Commerce – we are evolving into an e-commerce society.  Successful brands are largely, totally or partially sold online.  
We examine how.

“Retail is dying”

Walgreen’s is not taking on new launches this year (not even from the big guns: P&G, Unilever or L’Oreal).  Target & CVS changed buyers in key categories 3x in one year. Why?  Because it is true – e-tail is beating retail.  Ulta’s online business grew 13% last year – store sales were flat or declining.  

Increase your chances for building business by starting with e-tail brand rather than retail.

Start with E-Commerce:  Sell faster; establish & build brand recognition faster; gain intel on your customer with this low overhead method.  (NOTE:  More than 50% of all online purchases made in the US are made on Amazon)

Along with Amazon there is: JET.com (purchased by Walmart); Etsy and many more.  Often, retailers will take a brand on a website vs in-store to begin.  This means lower inventory levels and higher margins.

Starting with e-commerce offers distinct advantages.

Want to get your brand on Amazon?  Contact us at Joseph@LOCC.me. 

 

GET SOCIAL: Facebook

Social Footprint:  Every buyer, rep, category manager you meet will look for your brand online.  A robust social media footprint demonstrating lots of ENGAGEMENT (not just posts, but re-posts, shares and excitement) by your target demographic will tip the scales in your favor.  To this end:

Facebook:  Your Facebook brand page should have lots of followers, lots of “people talking about”, show relevant posts and some that are tangential to your core brand proposition.  Authentic conversation (some tougher critics’ comments should remain so it does not appear anodyne and “perfect”).  Use of video, stills, re-posts and especially media stories are great fodder.

Facebook can assist with  

  • Lead Generation – using new forms of advertising we can produce 10,000 new names in 30 days with a combined ad spend and agency fee of $6,000.  Those 10,000 names in your database feed your EDMs and growth.
  • Build following – there are many tools available to build a fanbase.  Contests and sweepstakes qualified to your product benefit are a quick way to gain lift.
  • Social Selling – We sold >$120,000 of a brand new-to-the-US self-tanner every month for 7 straight months.  Off an ad spend of between $40,000 and $60,000 our ROAS (return on ad spend) was always over a 2.2 – and reached as high as 2.7.

The important thing is that we were not losing money and these sales offered us intel about our target.  Prior to this, we knew who the consumer was in the U.K. and in Australia – but no buyer would hear this until we had hard data about the US customer.  Within a few months we knew everything about her:

  • Age, buying pattern, number of kids, purchase frequency, purchase drivers, where she lived (down to the zip code).
  • These datapoints changed the dialogue in our retail meetings (not to mention proved appetite for the brand and provided revenue for continued business operation).

Want to sell on Facebook?  We can offer examples and experience to help you.  Contact us at Joseph@LOCC.me

CRM

You have a US-based website and can take orders.  You may have begun social-digital advertising.  Fantastic. What now?  Keep building your database of consumers and learn more about them!

CRM Platform:  We suggest joining Mailchimp or Constant Contact.  

This will help with:

  • Abandon Cart emails:  Link your website to the platform to build your list and to recapture lost sales revenue via “abandoned cart emails.”  
    - Typical abandon cart rates are between 65% and 75% 
    - Shopify stats suggest a “good” abandoned cart email recoups about 7% of lost sales 
        * We have seen as high as 11%
  • EDMs (Electronic Digital Marketing):  Email is still the BEST social selling tool.  Outbound emails to a cultivated customer database (see below) will net a nice sales boost.  Best practice is to field these 2x each month with a special or different offer (discount, first try of a new product, BOGO or the like)

Want to know the most effective way to use EDMs?  We have examples.  Contact us at Joseph@LOCC.me   

Get Social!

There are many social selling opportunities beyond Facebook. Google Ad Words and You Tube can serve as a business builder: Usually beauty products fare very well with UGC on YouTube.  Our client Skinny Tan was an exception.  The brand performed VERY well in search vs YouTube.

Selected keywords for Ad Words paid search and begin “low & slow” to test results – like with $50 or $60 per day

In 3.5 months, one client’s Ad Words program reached sales of:

  • $40,000 in sales revenue
  • >900 sales
  • Off of $3,500 in campaign spend

This requires finesse and like Facebook, can be a full-time job.  

Affiliate programs – Facebook = fishing in a cold pond – constantly putting your ads out seeking the right customer.

Ad Words is closer because you know the customer is “looking for something like” your product

Affiliate marketing = accessing and placing your brand in front of established publishers’ audiences: Beauty websites (Refinery 29 and the like); beauty retailers (Ulta and others); Bloggers, Instagram & Twitter influencers and more. You set the criteria (e.g., must have min 50,000 followers, etc.)

With platforms like Rakuten (owners of Linkshare) you pay ONLY 10% commission to the publisher on the sales they generate for you – nothing more.  This is often less expensive than FB.

YOU PROVIDE:

  • The banner artwork in various formats for them to select
  • The commission structure (8%, 10% - special offers, etc.)
  • Twice monthly offers and emails to remain on the radar: answer “why activate now?”

PUBLISHERS PROVIDE:

  • Sales – they put your banner on their site; review your products for their audience; place your brand in a member newsletter, etc.
  • Send their readers to your site to buy – so they become your customers (add to your list)

RAKUTEN (or other platform) PROVIDES:

  • The platform for managing outreach; payments; storing assets, etc.

In the beginning you solicit affiliates;  Then they begin to solicit you!  The platform makes managing them/requests; sending emails & updating offers very easy.  And paying the monthly commission is a breeze. Moreover, YOU get the data from each sale – e.g., you build your list.

Getting Stared: Takes about $3,000 placed in escrow.

It takes about 90 days to get fully up and running, but one client signed 248 affiliates in that time and had 38 active – resulting in $15,000 in incremental sales in July alone.

This client began in April and reached $7,000 in sales via affiliates:

  • May $15,000
  • June $9,000
  • July $17,000

Want to know which key words might be best for you or which affiliate platform would benefit your brand?  Contact us at Joseph@LOCC.me

Conclusion

Managing Expectations

In all our years providing client service – being on both sides of the brand table (as brand owner/seller and as buyer/retailer), the toughest thing to manage is expectations.  Your own expectations (‘because this is how it is in our home country’) and those of your management, client, customer (this is how OTHER brands made it…)

The US and North America are quite particular – in both luxury and commodity consumption.  One client’s shareholder commented “America is not one market; It is dozens of mini demographics in the same geography.”  This is very true.  To this end, one size does not fit all. Flexibility and patience; willingness to learn and apply; allow for failure (the best teacher) and share failings from other territories.

Make no mistake – managing online sales, warehousing and import, a team of sales reps or just a single distributor each is a full-time job.  You will need a TEAM of people.  In turn, they will need YOUR

  • Leadership
  • Clear vision and success goals     
    - Well-managed expectations are generally this biggest hurdle.
  • Communication
  • Budget

Lacking any one of these areas will slow your success and impede your options.

We cannot stress this enough – managing expectations is critical.   We heard about a foreign brand that sold nearly $2 million within 8 months but counted the $500,000 investment made during that time as a “loss” and decided they could not make it in America – so they stopped all the very successful Facebook ads and e-commerce.  With orders on the table, they walked away.  Half a million in the US alone is a drop in the bucket.

The moral to this story is to be sure that you have the stomach for this roller coaster!

For more information or read the full manifesto contact us at Joseph@locc.me