For US brands who want to expand internationally, selling online in Europe is an attractive option.
The European ecommerce market grossed US$634bn in 2022 and boasted roughly 523 million active online customers.1 What’s more, this market is expected to grow to US$880.7bn by 2028, at a CAGR of 8% from 2023 to 2028.2
However, expanding internationally comes with a whole host of challenges.
A US ecommerce business looking to sell in Europe will need to get to grips with new tax and compliance laws, as well as multilingual and multi currency sales, for example.
What’s more, European customers have very different expectations of their ecommerce experience than US customers, and it pays to be culturally sensitive. Simply reproducing your current US marketing strategy may not work as you expect.
You’ll also want to think about how you structure your ecommerce store to best handle sales across multiple regions and cultures.
In this article, we share how US retailers can localize their ecommerce strategy for the European market and start selling online in Europe using Shopify Plus.
How to successfully expand your ecommerce brand from the US into Europe
1. Plan your international store structure
As you expand into new international markets, you’ll want to provide a localized experience for each of your new customers, wherever they are across Europe. This may involve selling in different currencies, translating your content into the local language, offering an altered product catalog, or amending your delivery policies.
The level of localization you require will affect how you manage your international Shopify Plus store structure.
Markets vs expansion store/s
Essentially there are two main approaches to international store structure on Shopify if you are expanding into Europe from the US.
i) Adapt your existing US Shopify store, leveraging Shopify Markets to localize the content of your store for the European ecommerce market.
This approach is the simplest and most cost-effective way to start selling internationally, since there is no requirement to design or maintain a separate store. Practically, this means you can centralize backend functions whilst managing multiple currencies, region specific pricing, local domain names and language from within your Shopify Admin.
With a high-end personalization tool, there are increasing opportunities to localize your ecommerce site to the individual user, enabling each customer to interact with your brand in the context of their region.
This is a great option for smaller enterprises, as well as businesses just starting to sell online in Europe and wanting to test the waters before investing more thoroughly in this new market.
The downside is that there are currently still some restrictions with the level of customization you can achieve using Shopify Markets.
ii) Opt for a multi-store approach and create a European specific expansion store, or multiple expansion stores for your main regions within Europe.
Alternatively, Shopify expansion stores allow you to manage your different markets independently of each other. This approach gives you greater control and flexibility in your approach to each individual market, especially if you have different products, price points and promotions across each region. On Shopify Plus you can have 10 Shopify stores for free.
However, the multi-store approach requires a greater financial investment for the design and build of a separate store, the additional tech stack costs and the ongoing management of a separate site. Although, it’s worth mentioning here that Swanky has developed an innovative multi-store codebase solution that reduces the complexities of managing multiple expansion stores.
If you want to know more about the advantages and disadvantages of each option in more detail, check out our article on Shopify Markets vs Shopify expansion stores.
Direct European customers to the correct storefront
Once your store is localized, a store-locator pop up can help direct customers to the correct storefront according to their IP address and browser language preferences.
As well as ensuring each customer gets a localized user experience, this can also avoid disappointment from users browsing the wrong site, if shipping terms or prices are region specific.
2. Make your Shopify store multilingual
Europe is a diverse continent with numerous languages and cultures. Whilst levels of English are high in many European countries, when it comes to making a purchase, 76% of online shoppers surveyed prefer to buy products with information in their native language, whilst 40% will never buy from websites in other languages.3
Translating your store is therefore a must if you want to build trust with your new European customers.
How you choose to translate your content will depend on your budget and the importance of each region. Poorly translated content could risk harming your reputation as a reputable brand, but paying for human verification can be expensive if you have a content-heavy site.
Our guide to Shopify translation talks you through the options of translating your store, and some of the translation apps available.
Keep in mind that even if you’re selling in the UK, you might need to adjust the language used on your store to prevent any confusion. For instance, in British English, the term “pants” refers to “underpants” or “panties” – which is not something you want to get confused!
3. Understand GDPR and privacy regulations
One big difference between the European and US markets is the General Data Protection Regulation (GDPR). GDPR is like a guidebook for data privacy in Europe. It emphasizes that you need to get permission from individuals before collecting their data and that you need to be clear about how you plan to use it.
If you’re a US company looking to expand into Europe, you’ll have to adjust your approach to give individuals control of their data, getting consent from users and being transparent about your data practices.
Security is also an important consideration. GDPR requires data to be well-protected, and if a data breach happens, you need to inform both the authorities and the people whose data was affected.
Another consideration is the ‘right to be forgotten’. In Europe, customers can ask you to delete their data under certain circumstances, whilst in the US, you’re just required to grant access to their data and correct it if needed. If you’re aiming to do business in Europe, you’ll need to be ready to handle data deletion requests.
In Europe, people take their data privacy seriously. It’s important to take some time to learn about GDPR regulations and ensure your data collection, storage and processing practices are compliant. It might seem a bit complicated, but it’s the key to building trust with European customers and making your international expansion a success.
4. Localize your marketing
Let’s talk about tailoring your marketing strategies for selling online in Europe. Cultural nuances play a significant role in successful market penetration. What works in the US might not resonate in Europe, and you’ll want to tailor your marketing campaigns and messaging to align with local customs, holidays and traditions.
In the US, for example, flashy ads and bold statements are effective in grabbing attention. But in Europe, folks tend to be more reserved. Subtlety and a personal touch go a long way. Europeans appreciate thorough product descriptions, in-depth user reviews, and more of a storytelling approach. So, trade gaudy banners for content that resonates on a deeper level. Tailoring your customer journey to be more informative and accommodating can make a huge difference.
Whilst BFCM is gaining in popularity in some European regions, for much of the continent, this is not the most important holiday for ecommerce sales. You’ll need to synchronize with key European holidays if you want to time your promotions strategically.
Whilst carrying out initial market research is essential, it’s also important to take a flexible approach to your strategy. Test each campaign and be willing to adapt your approach in order to improve your results (find out how to get started with testing and experimentation in our article on the CRO basics).
You can discover more ideas on how to localize your international marketing strategies for new regions in Swanky’s complete guide to internationalization on Shopify Plus, written with 13 expert technology partners from across the Shopify ecosystem.
5. Adapt your product catalog
Selling online in Europe may require an adapted product catalog, in order to respond to local regulations, as well as consumers’ tastes.
Fashion, design and lifestyle trends vary considerably between different European regions, which could impact the products you propose to different regions within this market. Understanding these variations can guide your branding and presentation, to ensure your products align with local styles and preferences.
If you sell in a regulated sector, you may also find yourself restricted in terms of what you can sell. European regulations tend to place a stronger emphasis on consumer safety, environmental impact and product quality, resulting in more stringent restrictions on certain categories of products, such as cosmetics, food additives and electronic goods.
Additionally, Europe has taken a proactive approach to banning or limiting the use of certain chemicals and substances in products, which has significant influence on what can be sold.
In practice, this may mean a longer process to get your products approved for the European market. You may need to offer a restricted product range to your European customers, or to adapt some of your products to ensure they pass regulations.
6. Offer local payment options and multi-currency
Importance of localized currency
Online customers expect to see prices in their own currency throughout their entire purchase journey. Displaying prices in a foreign currency can erode trust as customers may be concerned about hidden costs or a nasty surprise when they reach checkout.
“Most international online consumers are very familiar with USD pricing, but even with this familiarity they may balk at the final checkout price because of exchange rate fears,” explains Matthew Cannon, Chief Revenue Officer at Reach.
“At the merchant level, that consumer FX fear can be compounded if you’re pricing in Euros, Pounds, or even Yen, and cart abandonment rates can skyrocket if you’re not displaying the final price in that customer’s home currency.”
Localized payment methods
Make sure you are also offering your international customers their preferred payment methods. While credit cards rule the US, preferred payment methods vary between European countries.
According to the FIS Global 2023 report, digital wallets are the number one payment method across much of Europe, including in the UK and Germany, whilst in Sweden, buy-now-pay-later transactions take the lead. Conversely, in the Netherlands, Poland and Finland, account-to-account payments are by far the most popular.
Integrating popular regional payment options and even country-specific choices can make all the difference in closing a sale.
7. Shipping and fulfillment
For a US brand expanding into Europe, handling shipping and order fulfillment requires careful planning.
Find a local partner that aligns with your brand
Finding a good local shipping partner is crucial to optimizing shipping costs and delivery times. But it’s also important that your chosen partner aligns to your brand values, to ensure your European customers receive a high-quality shipping experience.
Poor customer experience could lead to negative reviews that will hurt your reputation back home as well as abroad.
Localize your distribution
Setting up warehouses or distribution centers within Europe can help reduce shipping times and costs, as well as minimize customs delays. Again, identifying a reliable 3PL (third-party logistics) provider will be key to protecting your brand value amongst European customers.
Be transparent about shipping terms
Even if your shipping times are longer for European shoppers than for your US customers, clear communication about shipping options, delivery times, and any potential fees throughout the user journey goes a long way to improving user experience and providing reassurance to consumers in Europe. No customer wants a nasty shock when they get to checkout and see a surprise shipping charge.
Read more about how fulfillment can be a key differentiator for your brand in our article about how to turn your ecommerce fulfillment into a competitive advantage.
8. Legal and tax considerations
Countries within the European Union have varying tax rates and import regulations. Ensuring you are compliant with local laws and properly calculating taxes, import duties, and VAT can be a headache for a US brand.
Many US businesses opt for transacting via a Merchant of Record (MoR) such as Reach.
As the Reach team detail in their blog, “What is a Merchant of Record?”, an MoR is a local entity, based in the jurisdiction of a buyer, that assumes all legal liability for the transaction between the seller and the buyer. From the perspective of the seller, it essentially acts as an outsourced subsidiary, which seamlessly acts as an extension of the seller in all matters involving the final sale, collection and remittance of local taxes, as well as fraud management.
From the buyer’s perspective, there is little difference in the customer experience. They still check out through the seller’s website and receive the items or services purchased directly from that seller. The power of the model exists in the background: that same consumer, during checkout, is able to see prices in their local currency, complete with all applicable local taxes, while selecting the local payment method that they prefer.
Additionally, through advanced transaction routing that processes the purchase at a local financial institution (as opposed to one located in a foreign jurisdiction), approval rates are dramatically improved, often by up to 20%.
9. Eco-friendly practices
European customers generally have higher expectations when it comes to eco-friendly practices from the brands they buy from. Brands that actively participate in social responsibility initiatives and are transparent about their efforts to reduce their carbon footprint tend to resonate more positively with the European audience.
This means paying attention to things like:
- using sustainable packaging materials and reducing the amount of packaging (in particular there is a trend towards avoiding any single-use plastic);
- shipping methods that prioritize reduced carbon emissions and efficient logistics; and
- product ingredients that favor organic and locally sourced materials with minimal environmental impact.
Adapting to these sustainability standards can position your brand as a responsible global player that aligns with the values of the European market.
10. Offer localized customer service
You may have a flawless customer service record with your US customers, but there are potentially adjustments to be made in order to serve your European customers equally well.
The difference in time zone can be tricky to accommodate for a US brand, as well as providing multilingual support.
A customer service tool like Gorgias offers plenty of functionality to help streamline your multilingual support for international customers:
- Language recognition ensures that each ticket is assigned to the correct member of your customer support team.
- Intent detection is a great way to streamline your support. Gorgias’ intent detection software is supported in 16 languages, and analyzes customers’ messages to detect their intent. For example, it can identify whether they’re getting in touch about a damaged order, or if they’re requesting a refund or exchange. Once the intent is detected, the ticket is automatically triggered to go to the appropriate next step.
- If you have a multi-store set-up, you’ll want a customer support platform that can integrate all your stores into one account, so your team can manage it all from one dashboard.
European customers value exceptional customer service. Investing in multilingual customer support that’s available during local business hours will go a long way in building your brand’s reputation in the European ecommerce market.
11. Sell on marketplaces and local platforms
While Amazon and eBay are popular marketplaces in the US, Europe has its own dominant platforms, with local options like CDiscount in France, Zalando in Germany, or Bol.com in the Netherlands.
Do your research to ensure you’re targeting the right marketplaces and social platforms in order to reach your target audience. These platforms are not just avenues for sales; they are also hubs of regional consumer behavior and preferences. Diving into local platforms allows you to align your brand more closely with the cultural nuances and shopping habits of European customers.
Start selling online in Europe from your Shopify store
Expanding your US ecommerce business into Europe can be highly rewarding, but it requires careful planning and consideration.
Swanky is a leading Shopify Plus agency for US brands, and has helped numerous North American businesses finetune their approach to selling online in Europe.
We can advise on your international store structure and best tech stack for localizing your approach to the European ecommerce market.
Meanwhile, our marketing team is experienced in crafting optimized paid and organic advertising campaigns that can boost your influence with European customers.
Check out how we helped the baby brand DockATot navigate a rebranding of their European branch and align their international presence with their well-established US brand.
Get in touch with our team today for advice on how to successfully expand internationally and launch in Europe.