Is Prime Day overrated? Lessons for growing businesses
Marketing Director, SMB Online, Europe at Ingenico ePayments, Sangeetha Narasimhan, tells us that growing businesses have every opportunity to thrive cross-border just like their big competitors – and they don’t need to be on a marketplace to do so.
Is Prime Day overrated? Lessons for growing businesses
Large international marketplaces such as Amazon have long been a daunting competitor to growing merchants. This, combined with the prospect of the UK leaving the European Union (EU), means many smaller business owners may feel the barriers to enter other European markets are greater than ever.
Fortunately, this isn’t the case for those businesses that have already made the leap into ecommerce. More and more growing businesses have successfully expanded their customer base into Europe by harnessing the popularity of international sales events, like Black Friday. With a little support, there’s no reason why others can’t do the same and grow their business on the international stage.
It’s not all about Prime Day
Don’t believe us? Europe’s premier costume and merchandise store, Funidelia, is just one example of a company that successfully took the leap cross-border by using the appropriate holidays to boost sales. And it did so without setting up shop on a marketplace.
Funidelia was founded in 2011 by Carlos Larraz (CEO) and Toño Escartin (chief business development officer), after they had seen friends import costumes from the US, paying costly customs taxes and shipping costs for the privilege. Spotting a gap in the market, Larraz and Escartin kicked off plans to become a high-volume transaction company – a vital goal for any company in such a niche market.
Thanks to a keen focus on expanding into other European markets online and using the power of key holidays to bolster sales, the company has seen tremendous growth in recent years. On average, it processes 9,000 transactions per month. During a peak sales event like Halloween, though, purchases can soar by 344%, and a staggering 789% during carnival season.
That’s the thing about leveraging peak sales days; it’s great for a boost to profits, but it means that the business has to be ready for huge fluctuations in transaction volumes.
What to do about all those customers
To prepare for sales spikes, growing businesses need to plan appropriately, updating their online systems to be able to cope with this new traffic – especially when trading across multiple territories. Merchants should first detect whether they can easily process irregular transaction influxes effectively while still ensuring secure payments for consumers.
In Funidelia’s case, the appropriate payments solution was one which could facilitate the flexibility and capacity needed to handle the heaviest payment traffic, while providing a responsive checkout to support its mobile store – this was important considering mobile transactions now account for 70% of Funidelia’s sales.
Competing on conversion
Whether on mobile, laptop, tablet, or any other new-fangled technology, conversion is they key to competing with marketplaces. European consumers know that if they purchase on Amazon then the order will go through, and generally without an issue. Growing merchants outside of the marketplace need to promise the same flawless processes.
Reggie Johal, founder of fast-growing sports and nutrition supplements company Predator Nutrition, told us that: “If, as a customer, I went to a small business retailer and I couldn’t complete the transaction on the first attempt, I would probably go to Amazon or somewhere familiar. The payment is an absolutely critical part of the shopping experience.”
When Johal first established Predator Nutrition, the business was hit by a substantial number of transaction declines and the vague “DO NOT HONOUR” messages that accompanied them – even when consumers were trying up to six times to complete their order. To save losing these customers indefinitely, Johal asked for our support to properly convert these orders.
With a functioning checkout, Johal estimates that its UK conversions have grown by around 20%, and the company has noticed a drastic reduction in declined transaction complaints.
The importance of proper targeting
Before conversion even comes into the question, though, businesses need to make sure they’re appealing to new customers in the markets they plan on expanding into.
Amazon has made a name for itself as the go-to company for just about anything because it knows how to target individual consumers. It understands that each customer has diverse needs and preferences, right from the product to the payment. Growing businesses who want to be recognised and grow in a highly monopolised online world should take this same approach.
That’s exactly what Funidelia did. By providing a variety of local payment methods – it offers 14 ways to pay – in a range of currencies, this company is able to compete with the likes of Amazon and its international reach.
Of course, along with offering various local payment methods comes the headache of new regulations. But they shouldn’t put businesses off going cross-border.
If merchants want to compete with the eCommerce giants by trading in new markets, then there are people out there to help take the stress of compliance away. Speak to your payments partner, they can support you with regulations and make sure your growth plan is still on track.
Carlos Larraz, CEO of Funidelia, told us that: “Thanks to Ingenico, we can look with confidence to the future and contemplate our strong growth. In the coming years, we plan to open our site to a dozen new markets in Europe and Asia. Knowing that we can rely on a flexible, international payment partner is a real asset.”
The lesson here
If you’re still not convinced, just look at how far Funidelia has come since its humble beginnings less than a decade ago. It expanded quickly across Europe by taking advantage of peak sales events – and staying away from marketplaces – and now operates in 32 countries across Europe, with plans to expand further after exceeding 20 million euros in 2018.
Meanwhile Predator Nutrition has extended its reach beyond its home turf to the USA, Sweden, Spain, Italy, Denmark, Norway, Australia, France and Germany. Around 40% of its revenue now comes from outside the UK.
Both Funidelia and Predator Nutrition offer plenty of lessons for growing merchants looking to achieve the same success. Know that cross-border growth is possible, even with the buzz surrounding Prime Day right now. An appropriate strategy in place, as well as technical support and expert guidance, is all that’s needed to compete with the eCommerce giants and their peak sales game.
For more information, reach out to the SMB division of Ingenico ePayments who can support you using targeted peak sales events to expand beyond your home market.