Imagine a map of the world sitting in your office with a picture of the five to ten countries that present a clear opportunity for your company to create long-lasting customer relationships at a fraction of your current customer acquisition costs. A map that could not have existed in January 2020. This is the global white space map created by ecommerce leaders during the disruptive COVID-19 crisis.
As the current crisis changes the makeup of how consumers are purchasing goods and services around the world, companies are reevaluating how they can best provide value and build one-on-one relationships with their international consumers. The old concerns and pressures around ever-rising consumer expectations, supply chain optimization, and competitive threats have taken on a new form and, in many cases, present an opportunity to create unique strengths in markets that brands would have not considered at the beginning of 2020.
Simply put, there is massive growth in global direct-to-consumer (D2C) markets. Teams that understand how to evaluate global white space opportunities are leveraging data and expertise to create precision growth with strong potential in building long-term relationships with customers.
The key to successful global strategy and performance, now more than ever, is understanding global customer acquisition variables and how your strengths as a company play out on the world stage.
Here are five reasons why evaluating global white space opportunities now will help you grow and differentiate your business, in some cases with clear white space to become a leader in your category.
Reduced cost of customer acquisition. Several data points play into this equation, including currency fluctuations, country AOV (average order value) trends, political climate, and shifts in channel spend. With proper data analysis, companies can easily identify how these variables can affect acquisition costs.
Increased revenue opportunities. Consumer sentiments have changed drastically and are country- and category-specific. As certain physical store brands or favorite marketplaces are unable to deliver around expectations, consumers are becoming more mindful around making decisions based on quality and availability versus convenience. Brands that identify category fit can often increase the AOV by matching the consumer journey with new emerging sentiments.
Increased customer lifetime value: For purpose-driven brands, there are certain countries where consumers have shown a significant increase in identifying brands where they feel aligned with their values. In Italy, for example, during COVID-19 27% more consumers are looking to shop online for sustainable, eco-friendly products, while in Korea there has been an increase of 46% of consumers looking for brands with healthy and hygienic packaging. (McKinsey, Global Consumer Sentiment During COVID, July 2020)
Competitive first-mover advantage. In most countries, the overwhelming majority of consumers don’t feel comfortable resuming their normal, everyday “out of home” activities and won’t feel comfortable after the restrictions have been lifted. The homebody economy shifts the ways in which consumers purchase goods and relate to brands. New considerations around the consumer journey can help land an unforgettable experience for consumers, creating the potential to own new emerging categories like home office, space-saving, family living, and home fitness needs.
Reduce costs: Companies can reduce costs and increase precision in decision-making by owning their own global data while reducing dependency on external media agencies. Companies working with platforms like Shopify, Salesforce Commerce Cloud, or Magento have an advantage in working with plug-ins or apps that assist in understanding new insights that can easily be integrated into the in-country consumer journey.
Throughout the crisis we are helping companies identify how they can provide value on a global scale, matching existing resources with opportunities for long-term global growth. If you are interested in learning more about our global white space assessment, please contact firstname.lastname@example.org.
By Carl Miller, Global Director of Global Retail Insights Network