Globalization – Marketing’s Biggest Challenge?
A great question to ask and I can bet you that 9 out of 10 answers would be around specific technologies and innovation that is happening around us, may be Data or rather “Big Data”, content, mobile and the list can go on. Interestingly though, while technology in general may appear to be most complex, it is by far the easiest puzzle to solve in marketing or any business domain. On the other hand, it is the GLOBALIZATION of a set model that stands today as the biggest and toughest challenge for brands and organizations, regardless of their vertical, everyone from a leading brand to retailers as well as agencies are struggling to expand their marketing and eCommerce footprint across the globe. I like to expand that challenge to include “eCOMMERCE” simply because the worlds of “sales” & “marketing” have converged tremendously and any marketing effort no matter how creative & exciting it may be, that does not contribute towards some form of sale is literally futile and meaningless.
Why discuss Globalization? Ignore at your own risk.
It’s simple – while it’s the toughest challenge, it is also the biggest opportunity for brands. Having a global footprint for brands is no longer a “nice to have or a may have” but a “MUST HAVE” need to be truly successful and competitive. In an interesting Forrester report published recently – “Global eCommerce Opportunity”, Zia Daniell Wigder and Martin Gill share a few encouraging facts and insights into the global markets, their rise in the last decade and a potential look into the future. Here are some highlights from one of the recently published reports from Forrester:
- International expansion ranked one of the most important business strategies based on the research from Forrester
- APAC — China has projected an eCommerce market worth $219 billion in 2013, surpassing Europe by a wide margin. Could very well go beyond US by end of 2015.
- LAO — Latin America is increasingly hitting the radar of global brands selling online: Walmart recently launched eCommerce in Mexico, Brazil’s $15 billion market size currently dwarfs others in the region. Global brands tend to prioritize Brazil and Mexico as the two regional powers. Germany’s adidas, for example, sells direct in Colombia as well as Brazil.
- MEA — Dell and Microsoft have operated websites in these regions for years. Most companies interested in the region target the rapidly growing and wealthy markets of the Gulf States in the Middle East first; Burberry, for example, now operates eCommerce websites for the United Arab Emirates (UAE), Kuwait, and Qatar. In Africa, most global brands continue to focus on South Africa, although infrastructure issues and payments in the country — while improving — remain a hurdle to eCommerce adoption.
View this INFOGRAPHIC by Kyle Anthony Miller on the Globalization of eCommerce, click to view the enlarged version.
The Global Landscape Evolution & Role of Technology
Of course all the opportunities and the tremendous growth thereafter have been a result of a few changing trends and the evolution of technology itself. For instance:
- Global marketing & eCommerce platforms – The usual players offering enterprise eCommerce and marketing technology platforms have aggressively realized the global potential and have established a global offering especially with local offices in APAC. Some of the leading eCommerce platforms like IBM, ATG & Hybris are now global players and both Adobe and SDL Tridion are supporting brands around the globe in delivering web experience platforms.
- Global partnership model – Where the service and technology providers have struggled to expand internally, they have reached out to niche local players and created strategic partnerships. This has changed the dynamics especially in the distribution and fulfillment space that is highly dependent on local market maturity, landscape and infrastructure best solved by a local shop.
- Acquisitions – Last 8 years or so have seen a number of acquisitions by the leading four in the marketing & eCommerce world:
Their incremental growth is enabling leading brands to expand foundational capabilities across the global regions without re-inventing the wheel (as much as possible).
- Global Innovation in Payment Solutions – Innovation is no longer restricted to geographies, in fact it’s been adapted to meet local needs. For instance new payment methods and eWallet solutions like Alipay and Tenpay in China to Webmoney in Russia. TESCO’s digital boards at the metro stations paved the way for rest of the world and opened up new avenues for omni-commerce.
- Expansion of Shopping Networks & Marketplaces – While Amazon and eBay are big in North America and possibly Europe, there are others that capture a larger footprint of brands and online shoppers like Alibaba, 360Buy.
Some of these factors and many more have pushed the brands and retailers to think global not just in terms of strategies but also expanding capabilities, infrastructure and partnerships.
Great – But what is holding the brands back? The Expansion Roadblocks and Challenges.
Now comes the most interesting aspect of globalization. Despite the opportunities, infrastructure expansion, growing market maturity and broadening consumer needs, it has not been able for brands, retailers and agencies to simply replicate the growth they may have had in one market. There are many reasons behind that struggle, some are organization specific but it is largely a common challenge that demands a strategic, operational and behavioral change both internal and external to organizations. Let’s review the top 10 questions or factors that add to this challenge:
- Organizational Model – I think by far the most influencing factor in how an organization operates globally and locally. Is the business and strategic decision-making done at the local market level or does it eventually roll up into a regional or global team? While having a global team at the helm can make cross-markets decisions move faster, an absence of a local presence usually creates knowledge gaps in terms of local consumer and market needs.
- Funding Model – An extension of the organizational model. While a completely local P&L (profit & loss) ownership can create fragmentations with each market re-inventing the wheel at least for common solutions, an entirely global or centralized model can slow down local growth and efficiencies.
- Complex and varying global market landscape – While the broader opportunities around marketing and eCommerce may be universal, the actual strategies and operational needs are HIGHLY DIFFERENT as you move from one part of the world to the other. This variability exists at all levels:
- Consumer landscape & behavior
- Market maturity & readiness
- Infrastructure & operations
- Local market investment in innovation & expansion
- Market’s financial & economic policies
- One size Fits All mindset – A typical dilemma when dealing with business problems or opportunities which are more global than local. More often than not, there is a natural tendency to solve world hunger that leads to teams biting more than they can chew losing cost, quality and effort almost instantly. With no perfect answer or silver bullet, organizations need to stay flexible and balanced and avoid the extremes.
- Too much focus on Technology & Standardization – Technology and technologists (including myself) can have a tendency to overshadow some “as important” if not “more important” aspects of business like operations, business processes and changes and “strategy”. A usually fallacy in a globalization effort is to have technology lead the way while it should merely be an enabler following a strategic and operational vision.
- Global vs Local Drivers and Priorities – While a global initiative usually focuses on efficiency, cost effectiveness and reuse across markets and regions, local needs are usually more focused on the need for speed, agility and very specific business results. Unless the two can be merged and balanced through a hybrid initiative, conflicts in priorities are a natural outcome.
- Lack of Central Funding or Global Investment – Especially in organizations with local P&L buckets, it’s challenging to find a central funding model which is typically needed to kick start a global initiative. An absence of this funding almost dictates the need to have local solutions and strategies.
- Cross-Market Perceptions & Collaboration Challenges – While the intentions and goals may be consistent, there is often a reservation in adoption solutions from certain parts of the world. Sometimes this is cultural and at other times it stems out of the need to keep control either locally or in a certain region.
- Operationalization & Business Process Changes – With the expansion of SaaS solutions and technology providers, technology can be scaled and adapted by market however the operationalization of a certain capability whether it is CRM or eCommerce, has far more implications and dependencies in a globalization process. Establishing new capabilities in markets require massive business process changes, hiring new talent and in a lot of cases a behavioral and mindset shift which adds to the complexity.
- Diversity in consumer landscape – A big reason why “one size will never fit all”, the problem and the opportunities across the globe differ because the consumer, their behavior, their expectations and the overall landscape is dramatically different. Trying to solve them and measure them with the same yardstick is a temptation better resisted.
A Path Moving Forward
While there may not be a perfect recipe to globalize your brands, there are definitely some best practices that could be considered:
- Hybrid model – Avoid either extremes ie while a complete global and common standards approach may lead to more effectiveness, reuse and cost efficiency in the long run, it thwarts speed and agility which are must haves in today’s dynamic consumer lead environment. On the other hand, a completely localized approach can create a highly complex and unmanageable ecosystem. Identify an approach which is a hybrid, either build frameworks, processes that provide re-use at the lowest level while giving local markets flexibility to “ADOPT & ADAPT”, leveraging standards wherever needed but with control to customize and operate locally.
- Centrally guided but Locally controlled & managed – The era of a “center” in a global approach is a thing of the past. The center is the globe. Create best practices, strategies and operational processes as guidelines and starting points but allow local markets to adopt and tweak these based on local needs and influences. The key aspect though is the presence of a center driven initiative that encourages knowledge share, lessons learned and success stories. Establishing a communication, operational and engagement framework between local, regional and global teams is a must have.
- Investment into Globalization – Think about globalization not just as an operational and mechanical step but a strategic business opportunity that requires investment & effort in establishing global teams and talent. Hire leaders both at the local and global level to drive the business objectives.
- Don’t look for a “common” size – Make a safe assumption that you will not find a common solution to all your global needs for a very simple reason, the needs across the globe are not the same. Don’t let your business strategy get influenced by common and standardized technology platforms and solutions, let those be the enabler and have a more flexible approach and mindset towards adopting them.
Globalization isn’t the easiest puzzle to solve for there is no standard solution that will work for all organizations, it is extremely dependent on factors both internal and external to the way an organization is set up, controlled and managed. The challenges become fluid in the world of marketing and eCommerce since these areas sit right in the middle of a massive evolution and innovation with different regions at different stages of maturity. But one thing is for sure, with technology the globe is becoming smaller and more connected and globalization of brands is going to be a natural outcome of economic growth. Solve it or perish.