The Internet is bringing U.S. DMers into international markets, but there’s a learning curve
Companies that once sold only in the United States found something out when they went online: Like it or not, they were now international marketers.
And that meant they had to deal with a whole new set of problems.
Take payment. “New and better and more secure payment devices are needed because of the increasing nervousness about credit card fraud over the Internet,” says Charles Prescott, the DMA’s vice president of international business development and government affairs.
In some countries, moreover, credit card usage is nowhere near as high as it is in the United States. Japan, for example, is a cash society; roughly 20% of all mail order purchases are picked up at convenience stores and paid for in cash.
But there’s a possible solution. The DMA is now working with the Universal Postal Union information technology department to develop an international money order system that could work electronically. At the moment, the DMA is looking for catalogers with Web sites to beta test a system in which an electronic postal service money order would be used to pay in dollars and be guaranteed by the U.S. Postal Service.
DMers also have to learn how to deal with legal and cultural differences. The DMA will try to help them by publishing a series of books on direct marketing in specific countries. The volumes will provide an overview of the business climate and opportunities as well as a extensive bibliography of resources. The first volume will focus on Great Britain.
Firms that want to check things out firsthand can participate in direct marketing trade missions. The next one is scheduled for March in Great Britain during the International Direct Marketing Fair. Prescott expects a dozen U.S. DM companies to participate.
“We hope to bring our Internet friends,” he notes.
After the fair, the trade mission will continue onto Lille, France, which is known to some as the direct marketing valley of Europe.
Just how many U.S. firms are active overseas? Prescott says that almost seven out of 10 U.S. direct marketers ship products outside of the country. The big markets are France, Germany, Japan and the United Kingdom.
Prescott argues that it is easier to gain market share overseas than back at home. “Many DMA members who have launched Web sites have had a great deal of success outside of the United States,” he says. “You can test at the drop of a hat for a modest amount and reach out to new customer segments without even trying very hard.”
Other problems? There are a few. One is the issue of how to conduct customer service in different time zones.
“Direct marketers are going to have to build the service technology into their Web sites,” Prescott says.
Mail delivery is less of a problem, for Europe has some “wonderful” postal systems, he continues. Some not only deliver the mail, but offer ancillary services, like Deutsche Post’s call centers or Royal Mail’s fulfillment warehouses.
In Latin America, Argentina has privatized its postal service and now has an excellent system, Prescott claims. Brazil has introduced an express package service – much like that in the United States – but is challenged by the sheer size of the country. Brazil’s postal service maintains its own fleet of airplanes to get mail out to remote areas of the jungle.
Mexico, Prescott adds, has standardized its address system and is building a nationwide address database.
In any case, Prescott urges direct marketers not to get intimidated.
“It’s all the old-fashioned stuff marketers take for granted in our more developed markets,” he says.
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