"We feel staying in a premium position is very defendable, we're not big on too low a cost"
The post Revolve SVP’s playbook for going global and the importance of localisation appeared first on Inside Retail Australia.
Online fashion retailer Revolve recently entered the omnichannel space with its first-ever permanent physical retail location in the heart of downtown Aspen, Colorado.
The decision follows the success of a pop-up shop that Revolve and its sister site FWRD opened in the same location last December.
Kai Li, senior vice president for international at Revolve has a wealth of experience in the e-commerce space and has worked as the head of international business development at Shopbop and Amazon.com.
Here, Li speaks to how Revolove’s global growth is driven by localisation strategies that deliver the best service to its customers within each region.
Inside Retail: What does your role at Revolve look like?
Kai Li: That’s a really good question. When I ask people in different companies what their day-to-day responsibilities are in a national role the answers are different.
When you think about international roles, we have territorial coverage.
The best way to define my responsibilities at Revolve as the SVP for international is anything outside of the US. I’m responsible for the profit and loss of the international markets.
That involves operations, customer service, logistics, warehousing, currency and finance.
There are two areas that I’m less involved in: merchandising, because you need a very large team to run that, and brand marketing.
I’m more of a back-office person and ‘Excel spreadsheet’ person looking at profitability than [someone who is] out there partying with the influencers.
When I was at Shopbop I was only allowed to do marketing. I wasn’t allowed to get involved in payment because there’s a gigantic business unit called Amazon payment that they wouldn’t let me get my hands [on]. And then logistic operations were very difficult for me to get involved with because of the nature of how the company is set up.
International roles are structured differently from other departments that are vertical – international roles cut across horizontally. At Revolve, I pretty much cut across all different functions.
IR: When did Revolve go global?
KL: In 2011, Revolve expanded internationally, with Australia being a top 10 market for the brand.
When successful e-commerce companies go international they do it in a staged approach.
In 2008 and 2009 we had a lot of customers from around the world knocking on our door wanting to purchase from us, however, we didn’t ship to [every] country. What we did was simple, we started using the US Postal Service to ship to customers globally.
In six months we saw the world in colour – the data and demand coming from different global markets.
IR: And what did the data suggest?
KL: We saw demand coming from Australia, the UK and Canada. But the point here is that by going wide and opening your product to the world, you start getting valuable data feedback.
The data is telling you, screaming at you saying ‘Hey, Australia is important, Canada is important and the UK is important’.
From there I started to look at those markets and what I observed was that we needed to improve the service offering.
Awareness is one thing, but we’re e-commerce, so in order to generate revenue, it’s awareness times conversion and conversion really hindered upon that service component.
For a company like Revolve, and almost all retailers, retention is probably the secret sauce for longevity and compounded growth – and great customer service unlocks that.
We built a good service to increase repeat customers. Australia, UK and Europe were the first batch of countries we unlocked. We then zoomed into five markets and invested in them regardless of marketing or local presence to harness long-term growth.
[Generally speaking,] your top five markets account for 80 per cent of national revenue.
The three stages to global expansion are: one, just open up; two, zoom in with localised service offerings; and [three], select a handful of strategic markets to invest in for the next five to 10 years.
Many successful e-commerce companies do the same thing.
IR: What are the key components to unlock?
KL: Logistics is part of it. We want to provide what I call a native service to customers. When I say native service that means shipping speeds are similar to the the average local players.
Accepting local payment methods was another element to ensure we could refund the same amount the customer was charged. Customer service is important and a huge part of that functionality is the website itself.
In Australia, we provide three-day shipping to customers, free local returns, payments and a localised customer service manual. In a sense, I feel we’re very much local, except for merchandise that comes from the US.
IR: Does Revolve have a localised Australian website, and if so, when did that launch?
KL: Australia was an easier market to expand and localise in – compared to the Middle East, China and South America. Australia was the first market we localised in as we saw it as a low-hanging fruit. This is because of the similarities in language and consumer behaviours.
When localising to the Middle East, we needed to develop a website in Arabic that goes from right to left and that is much more difficult than creating a site for Australia.
Australian localisation is relatively straightforward. I like to provide the best service and basically there are two parts to achieve that. One is marketing and the other is operations.
Operations include a very long list that covers the service and payments, which means we need to be able to accept Australian credit cards, and process returns in local currency. It’s funny when you think about international business, there are so many things that come naturally that you shouldn’t be doing that most companies do.
You want to make sure to charge the customer the exact amount displayed on the website and refund the same amount charged, but this is not easy. Most companies do cross-border charges which fluctuate with the currency exchange rates. Another is the other international transaction fees on top of your credit card and normal credit card fees.
IR: What are some challenges you encountered expanding in the Australian market?
KL: The biggest challenge we had in Australia was to build a returns program. Now we offer free returns in Australia. Anything you buy from Revolve you can return completely free.
We built a return centre in Australia to optimise the process and provide a faster returns process for the customer.
Before, the return had to reach the US before we were able to refund them, and we wanted to refund the customer within seven days. Another key investment we made in Australia was working with local influencers, which was part of our localised marketing strategy.
IR: How do you ensure localised customer service as a global brand?
KL: Using Australia as an example, Revolve has a local toll-free phone number that will connect to the US or to one of our global customer service centres.
IR: How has Revolve adapted to customer feedback?
KL: At Revolve, we’re customer-obsessed and strive to provide the best service that we can afford. Previously, Revolve only used express delivery methods, which are expensive to operate.
Revolve offered free shipping for orders over $100 and now we offer free shipping for orders over $50, however, it will take a little bit longer. Now with a low-cost shipping service, Australian customers can enjoy free shipping for purchases in the $50-100 bracket. In that category, delivery is provided by Australian Post. It takes longer to get there but is significantly cheaper than DHL.
IR: What led to this decision?
KL: We had customers knocking at our door asking for this. And we know this because we are obsessed with the customer.
I personally read every single customer feedback that’s classified ‘below good’. And from there, we learn from them. We had many Australian customers asking us to lower that shipping pressure, which we did.
IR: Have you seen a big uptake on this offering?
KL: A large number of customers chose to use the slower but lower-cost shipping option.
The post Revolve SVP’s playbook for going global and the importance of localisation appeared first on Inside Retail Australia.
