Why you should bet on Google Shopping rather than Facebook / Instagram this holiday season

photo of two silver giftboxGoogle Shopping is just the right tool to win this Holiday season

It sounds deceivingly easy. You have a great product. You create great visual content. Your packaging is instagrammable. The influencers say they love it. This will for sure translate into a lot of sales right? Right, only it doesn’t.

Or, not always. Or, it does only for some brands and requires a big budget, a unique product and a lot of luck (alternatively, having a celebrity as a CEO can be a big help). Anyone launching a skincare brand today will note that overnight success stories are of a bygone era.

Maybe it’s time to move away from the alluring world of community-building, customer evangelism and the whole brand building narrative and come back to marketing as a science, based on hard numbers and meaningful metrics. And numbers speak for Google.

Google makes it easier to get started

If there is one form of digital marketing that doesn’t require any advanced training to get started, it’s Google Shopping. If you’re using Shopify or BigCommerce to run your ecommerce store, the setup should take you minutes.

The basis of your Google Shopping campaigns is a product feed which can easily be created automatically by a third party app. If you have great products, with beautiful pictures and strong titles and product descriptions – in a nutshell, if you have a professional store – that’s about all you need.

Running Shopping campaigns is also relatively easy and doesn’t require any black magic or superpowers. Google offers many automations and if you accept losing some money for the first few weeks which the algorithm is going to need to learn your customers’ preferences, you can hand of your campaign management completely to artificial intelligence.

As long as you don’t mind losing some money at the beginning while the algorithm is learning, your Google Shopping campaigns can be fully managed by AIhigh angle photo of robot

Google Shopping does not devalue your brand

Forget the Glossiers, the Aways, the Kylie Cosmetics. Instagram is flooded with cheap products drop-shipped from China and this sad truth increasingly surfaces in the media. How do you stand out in this crowd? How do you make sure you are not considered as one of them?

Most likely your consultant has been telling you, you need to be offering discount codes to more easily acquire new users. Alternatively, she’s been telling you to offer discount codes to convert your first-time buyers into repeat buyers. Whatever the case, she’s certainly been telling you to offer discount codes!

Unfortunately, discounts are only going to further devalue your brand and those buyers you acquired at a razor-thin margin may not want to come back and if they have to pay the full price.

Google is measurable

But what about the influencers? For sure relying on them to promote your products to their base is what you need to be doing (because just about everyone else is). Unfortunately, three out of four marketers say tracking ROI is their top challenge when it comes to influencer marketing.

This happens for an obvious reason – it’s not in the influencers’ interest to be commissioned on the sales they actually bring in – it is much more beneficial to charge for “reach” or contributing to “brand awareness”. These vanity metrics are not only just that – vanity metrics – they are also easy to skew by the creation of fake accounts for instance.

Advertising with Google is all the contrary – you get almost too much data and too many metrics. You can see how each of your products is performing, in each geographical area, at which time of the day, each device… You can spend hours analyzing this data.

As mentioned earlier, you can also choose not to do that and let the Google algorithm do the math and make the decisions for you.

Google is often cheaper

If there is one metric which is of real importance when running your digital marketing campaigns it’s the Return on Ad Spend or ROAS measured as total sales generated from a campaign divided by the total money you spent on the ads.

Google Shopping often offers better ROAS than any other digital marketing venue because the ads are shown to people searching for the particular product you advertise. I am going to be shown this gorgeous cashmere sweater only if I’m looking for one, not if I’m checking out the news or updates from my friends.

That’s why, this Christmas, when buyers explicitly turn to Google to search for products to buy, you need to make sure that your products are there to be found.

Happy Holidays!

Can Shopify save retail?

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When did shopping become so beige” asked an eBay ad targeting – not so subtly – their Seattle-based competitor. Try as they may, ecommerce retail did become synonymous with shopping on Amazon. Is this a bad thing? And can it be changed? I would argue, yes and yes.

It’s becoming increasingly clear however, that if someone is to beat Amazon in their game it’s not going to be eBay but a humble company from Toronto whose market value has recently exceeded that of many Sillicon Valley darlings.

How much does it really cost to sell on Amazon?

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Amazon’s market share is projected to reach 50% of the US ecommerce market by as soon as 2021. As its clout grows, so does its pressure on the retailers using the platform for their online business.

While the battle to get into the Buy Box has always been tough, it can’t go unnoticed that Amazon sellers increasingly see their profits diminishing since the advent of Amazon ads.

The Buy Box is a functionality of the Amazon marketplace which allows an Amazon algorithm to select the best seller offering a given product. Although buyers also get to choose and a sale can happen even if the seller hasn’t been pre-selected by Amazon, in reality more than 80% of products sold on Amazon come from the sellers who made it to the Buy Box.

In order to get into the Buy Box and increase the odds of her product being purchased an Amazon seller needs to do a few things:

  • have the most competitive price
  • have a high percentage of positive feedbacks
  • have competitive delivery times and rates (so ideally use Amazon fulfillment, which allows same day delivery)

It goes without saying that all of this comes at a cost: the marketplace commission itself is on average around 13% but can go as high as 25%. The price wars on the Amazon marketplace are a real race to the bottom as sellers compete on price with each other AND with Amazon, who incidentally is one of the world’s biggest retailers. Also, in order to win the Buy Box sellers may see themselves forced into offering same day delivery and using Amazon FBA which is an additional expense.

If the Amazon marketplaces continues to gain market share at the expense of its competitors it’s because sellers have always seen the value for their money from using it – it does drive sales. Many ecommerce businesses I speak with admit that 80% of their sales volume comes from Amazon with roughly 10% generated by their own website and 10% from other marketplaces.

This added value has become less obvious since the introduction of Amazon ads. To be found in the crowded marketplace, a seller not only needs to have a high quality product with a good title, description, keywords and pictures – she also needs to pay for advertising on the platform. Since 2018 Amazon has been increasingly aggressive in promoting their advertising platform, which allows the Seattle-based company to generate profits at a very low cost compared to a typical retail business.

It’s quite obvious that having one platform with so much power doesn’t benefit ecommerce retailers and many are quite desperate to differentiate their sources of income and sway away from Amazon. But can anyone, apart from regulators, stop Amazon’s ascension?

How is Shopify different from Amazon?

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Tobi Lütke, the Shopify CEO. Source : Toronto Star

On the opposite site of the North American continent, in Toronto, a new rival is gearing up in the battle for the future of ecommerce.

From a seller’s point of view the Shopify value proposition is quite the opposite of Amazon’s. Where Amazon requires uniform experience, Shopify offers hundreds of themes. Where Amazon controls the purchasing process from the discovery to the delivery, Shopify only takes over the checkout and lefts the rest to the retailer’s discretion. Finally, and most importantly, the Shopify commission can go down to as little as 2.4% of sales which is quite unlike the 25% (+ FBA, + ad spend) merchants may need to pay to Amazon.

The Shopify platform makes it incredibly simple to set up an online business. So simple, that overtime it has drawn a lot of criticism pointing out that many of its users can barely be called professional sellers. Stories abound about teenagers setting up stores in no time to sell low quality goods imported from China. On the other hand, the platform’s marketplace of apps and third parties makes it equally easy for these businesses to scale. That’s why the company can boast having Kylie Cosmetics and Allbirds among its customers.

Being on Shopify allows sellers to build their brand and re-engage their customers with emails, retargeting and social media. Therefore, even if the cost of customer acquisition is higher (as sellers have to buy media themselves, rather than rely on a marketplace to do it for them), so is the customer lifetime value. Retailers who were suffocating under all the constraints imposed on them by the marketplaces find themselves empowered to run their businesses as they deem wise.

What comes next?

Shopify can save ecommerce retail. But is it going to? There are signs that the Toronto-based company may have different plans.

Shopify has recently changed their Terms of Service for independent apps to have more control over their sellers’ data and very publicly parted ways with MailChimp who didn’t wish to comply. They are also investing in their own fulfillment solutions. Are they quietly building their own marketplace, unifying all the beautiful independent direct-to-consumer brands they helped create?

As a Canadian proverb says “Patience is a tree whose root is bitter, but its fruit is very sweet.”

Marketing your ecommerce site when selling internationally

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We live in a world obsessed with growth. No wonder. If Amazon can grow at a pace of 30% YoY, anyone in ecommerce or retail is expected to do just as well. It’s been a tough race for some. Some others, didn’t make it through. And how is one expected to grow if the competition is increasingly tough? About everyone is generating worthwhile content for SEO, about everyone is investing in the same venues so the CPC’s are growing, about everyone is courting the same influencer, micro-influencers and even nano-influencers… The only way out of the race is to go international. And luckily for you, it’s easier than ever before.

Unfortunately, your success is highly dependent on how you drive traffic to your site today. Let’s review the most popular ways of driving traffic to an ecommerce store and see how they affect your likelihood to succeed internationally.

Driving international traffic to your ecommerce website if you depend on SEO

In order to receive organic international traffic, you need to make sure your content is translated. Simply put, the odds that a say, Spanish-speaking potential buyer from Latin America searches for “garden table” in English are pretty slim. Moreover, the translation quality needs to be good enough for Google not to penalise your site (so funnily enough it should not be Google Translate translation…).

There are many plugins available that you can use to get your site translated but most of them would not allow you to build your international SEO standing. Any plugin that simply translates a content using a javascript but does not create a local URL for your website, will not work.

In order to really start building your international SEO position, you would need to have a separate URL for each target market, in the proper language with the right translation quality and ideally an hreflang tag to make Google understand this is not duplicate content. You also need patience as it may take some time before you start getting worthwhile results.

It’s quite an undertaking and needs involvement from your existing webmarketing agency or in-house SEO expert. Again, simply installing a javascrit-based plugin will not work.

Driving international traffic to your ecommerce website if you depend on social

Seeing that even Amazon depends on influencers for promoting their Prime Day bonanza, social is now officialy “the thing” in ecommerce retail. I speak with an ever increasing number of retailers who say that all of their business comes from Facebook and Instagram. And it’s definitely not schoolboys trying to become millionaires in a week, it’s businesses making millions of dollars of GMV.

The bad thing about being fully dependant on social marketing is that it’s quite difficult to expand it internationally. The businesses I’m referring to receive next to no organic traffic from outside of their country of origin where their fame has been built.

Social marketing is all about engagement and authenticity and it’s difficult to build those if you don’t speak the language and don’t know the culture of the target country. There is no easy way to hack your way into these other markets, you probably need a social marketing manager for each language or each area of the world.

International Google Shopping campaigns – driving international traffic to your ecommerce website if you depend on SEM

Here comes the good news – in ecommerce retail SEM basically means Google Shopping and Google Shopping is fairly easy to put in place internationally.

Again, you need to translate your website and set up separate URL’s for each target country. You also need to convert the currencies to match the currency Google Shopping supports for the target market.

Then you do the same with your existing Google Shopping feed. The different feeds can be quite neatly set up in sub-accounts of your Google Merchant Centre, one per market. Then your all set for running your international Google Shopping campaigns. You also need to make sure that all the different feeds and sites are regularly updated.

It may sound like a lot of effort but it does pay off. You will probably be happy to notice that the CPC is often lower in the target market than it is in your domestic country and that you are able to buy traffic for less!

On top of that, at WebInterpret we have a fully managed solution that allows ecommerce retailers to create international Google Shopping campaigns in no time.

Don’t go at it alone

It’s almost impossible to just decide to start selling internationally and build an extensive international business on one’s own. You will need help along the way, either from your agency or from cross border trade experts. But if you are looking for profitable growth opportunities, it is by all means the least painful and the most certain way of achieving this goal.

US Sales tax – what do you need to know when exporting to the US?

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Anyone who has read Brad Stone’s fascinating The Everything Store will be familiar with this story – Amazon has decided to build their first HQ in Seattle, Washington in order to avoid paying high sales tax. Back in time, in order to pay sales tax in a given state, a retailer would need to have physical presence in this state. As a consequence,  ecommerce retailers established their businesses in states with low sales tax rates and low population, avoiding states such as California or Texas.

South Dakota v. Wayfair shakes things up

About everything has changed with the recent Supreme Court decision in South Dakota v. Wayfair. The court decided that “the physical presence rule for state tax jurisdiction is incorrect and not a requirement under the Commerce Clause of the U.S. Constitution.” Thus, in order to be eligible for paying the Sales Tax, the merchant does no longer need to have physical presence in a state – it’s enough if she has what’s called an economic nexus.

What’s an economic nexus?

The economic nexus means that a business has economic activities in a given state. Each state defines the nexus individually and the thresholds that make a business eligible for paying the sales tax vary from state to state.

Thus, an ecommerce business selling to buyers from California needs to make 200 transactions to California or exceed $ 100K of sales volume to this state in order to be eligible for the California sales tax of 7.25%.

The same business would need to exceed $ 500 K of sales volume to Texas in order to have to pay its 8.25% sales tax.

A very handy map showing all the thresholds per state can be found here.

What does it mean for non-US sellers?

Whereas the Supreme Court ruling does not explicitly mention businesses exporting to the US, there is no reason to believe that non-US sellers would be exempt from collecting and paying the Sales Tax if they have an economic nexus in a given state. The linked article from TaxJar cheerfully explains that the only way not to be eligible for the US Sales Tax is not to make any sales to the US. The other solution is to make so low volumes as to not be eligible for the Sales Tax. Any exporter who exceeds the per-state thresholds will need to face the reality of having to establish a tax presence in various US states and collect and pay the Sales Tax per state.

As a result, the ruling which was initially aimed against Amazon, ends up by hurting SMB’s for whom the need to figure out the new taxation rules may be daunting to say the least.

5 main issues you may encounter when selling internationally

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Expanding internationally seems like the most obvious way of growing your company. If you’re already the market leader for your type of business in your home country, where would you try to look for growth if not abroad? If you have strong local competitors and have to give up on some of your margins to remain in the game isn’t it obvious to try your luck elsewhere?

It is. Only, if you don’t do it right, it may come at a price.

Having worked with thousands of ecommerce merchants who tried their luck abroad, here are some of the challenges I have observed.

Different consumer expectations in different countries

It’s common knowledge for Cross Border Trade veterans but may be less obvious to merchants who until know have only contented themselves with their domestic market – consumers behave differently in different parts of the world and have different expectations. Germans, for once, has the highest return rate in Europe, with 41% of orders being returned. The return rate there is more than twice higher than in Italy or Spain. You should also expect German consumers to thoroughly read through your terms and conditions and privacy policy and point out anything which is not in accordance with the German law. Ouch!

International taxes

Once you start to export, you should make sure you’re up to speed with the local tax regulations in the countries you’re selling to. If you export to the European Union, once you have exceeded a pre-defined threshold, you need to register for paying the VAT tax on the goods that you sell in a given country (please note that this explanation of the VAT regulations starts by saying : “Due to the complexity of
the law, this information is not exhaustive”). The recently introduced GST in Australia works in a similar manner.

Countries with unreliable postal services

You’d be surprised by the number of shipments that will mysteriously get lost once you start delivering to countries such as Italy or Greece. In Russia, you should generally only deliver to business addresses. In the countries with many islands (such as France) delivery rates may vary a lot between a mainland and island addresses.

Custom duties

If you export to Canada a good whose value exceeds $150 (it’s called the de minimis threshold), the good risks being stopped at the border and your end consumer may have to pay an extra fee in order to receive it. Other countries have their own de minimis thresholds above which the products you ship may be eligible for custom duties.

How do you navigate across this incredibly (and increasingly!) complex landscape? The best advice is to look for some help, for instance with the experienced Cross Border Trade experts at WebInterpret.

Singles’ Day in all its’ numbers

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You have probably heard this one : Singles Day is bigger than Black Friday and Cyber Monday combined. But probably also this one : Singles Day growth has decelerated compared to last year’s. Whichever way you choose to look at it, the sheer size of the Chinese ecommerce extravaganza makes one dizzy.

Here it is in all its numbers :

85s – the time it took to spend $1B during this year’s Single Day

27% – growth of the Singles Day GMV (Gross Merchandise Value, or simply sales of goods) YoY

10 – the number of times the Singles Day shopping holiday has been held by Alibaba, the Chinese equivalent of Amazon

4 – the number of times the number “1” appears in the date 11.11 making it the most lonely day in the calendar year which is how the Singles Day came to live

3.2% – the drop in the Alibaba’s stock share price upon the 2018 Singles Day results

$30.8B – GMV of the 2018 Singles Day

180 000 – number of brands participating in the event

This one simple improvement can grow your sales by 14%

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The closer it gets to Christmas, the more potential buyers browse through your online shop looking for gifts for their loved ones. They make their selection, add items to the cart and then… for some reason they change their minds! Don’t worry, we have figured out one simple trick which will increase your sales by 14%.

There are many ways in which you could increase your checkout conversion :

  • you could send each buyer who entered his email address at the checkout stage but didn’t complete the purchase an email with a discount
  • you could target these buyers with a social media ad campaign
  • you could ask your IT team to tweak your checkout so that it runs faster and is simpler for buyers to use…

But wait! All of the above are going to cost you money! How can you increase the checkout conversion without spending anything extra?

Our research shows it’s enough to start presenting your customers with multiple delivery options in order to grow your sales by 14%.

Now, offering multiple delivery options – for example standard, economy and express – has no extra cost. You can apply a decent margin on each of the delivery methods you’re going to present. Even better, you don’t have to change the way you operate today or change your carrier. All you have to do is contact the carrier you are already working with and change your product listings so that they show at least three delivery methods.

On the other hand, make sure not to offer too much choice – if you present your customers with more than five delivery methods you risk analysis paralysis and discouraging them from buying altogether!

If your carrier cannot provide you with multiple delivery options for international deliveries, you can simply contact WebInterpret and have your online shop localised on multiple markets and with multiple delivery methods in just a few clicks.

UK exporters may still have a Merry Christmas this year

It’s true, you may not have your Marmite or Ben & Jerry’s for the Christmas dinner this year but, hey, let’s look at the bright side of things.

If you’re an exporter from the UK to Europe or to the USA you can expect a significant uplift in sales this Christmas season.

Retailers working with WebInterpret have already seen their exports grow by up to 119% this Christmas season compared to Christmas 2015.

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It remains to be seen whether sterling will remain at this level all the way till Christmas but if you’re an online retailer hesitating whether you should export, it’s a no brainer. And remember – WebInterpret’s turnkey solution can free you most of the hassle of selling abroad.

Jack Magic or the company culture behind the success of Alibaba

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Alibaba has no revolutionary product, no groundbreaking technology and took off with no business plan and no government support. In his almost-insider account, Alibaba: The House that Jack Ma Built Duncan Clark argues that the key to the company’s success was its culture, coined by Jack Ma.

There seem to be four aspects of Alibaba’s company culture that distinguish it from other Chinese companies that were founded at the same time but never became quite as successful : unforgiving work ethic, customer-first approach, unorthodox hiring and charismatic leadership. Clark provides a lot of evidence that these are not only declared values but the actual values the company continues to live by.

1. Seven days a week

Hard work appears to be appreciated at Alibaba more than outstanding skills. The mascot of Taobao, one of Alibaba’s ecommerce sites is a worker ant symbolizing that “even the smallest creatures can prevail over their enemies provided they work closely together.”

The cult of hard work is not merely symbolic though and expresses itself on a daily basis. The team selected to create the Taobao site has been asked the following : “The company has decided to send you to do a project, but you are required to leave your home and you must not tell your parents or your boyfriend or your girlfriend. Do you agree?” The team then started working in a small apartment and was encouraged to do handstands “to change perspectives” during breaks from coding.

Another quote similarly stresses the importance of hard work at Alibaba, especially at the very beginning : “working for Alibaba would be no picnic. the pay was low: the earliest hires earned barely $50 per month. they worked 7 days a week often 16 hours a day. Jack even required them to find a place to live no more than 10 minutes from the office so they wouldn’t waste precious time commuting.”

2. Customers first

Quite natural for the ecommerce companies in the West, putting customers first was a very bold move in China at the time when Alibaba was launched. Once again, it wasn’t only declared but was actually a value the company lived by as it, for instance, charged no fee on its sellers’ listings or transactions.
Caring customer service also allowed Alibaba to retain its users when facing competition from eBay or local players. “Alibaba customer service team found themselves at times working as a free tech support to clients answering questions such as how to reboot a computer. But wedded to its customer first tenet Alibaba resolved to respond to every email within 2 hours.”

3. Not the top talent

One of the important decisions made by Alibaba’s leadership when the company was founded was to keep its headquarters in Hangzhou at the time a somewhat provincial town two hours from Shanghai. By growing the company far from Beijing Alibaba lost access to the capital’s talent pool consisting of alumni of the country’s elite universities. This, however, wasn’t an issue for Ma. “When building up his team Jack preferred hiring people a notch or two below the top performers in their schools. The college elite, Jack explained, would easily get frustrated when they encountered the difficulties of the real world.”

Ma is also quoted as saying :” it is not necessary to study an MBA. Most MBA graduates are not useful. Unless they come back from their MBA studies and forget what they have learned. Then they will be useful.”

Alibaba’s Chief People Officer, Lucy Peng, shares a similar, non-standard approach : “Alibaba employees don’t need experience, they need a good health, a good heart and a good head.”

The advantages of hiring inexperienced graduates from Hangzhou over the arguably more qualified candidates from Beijing are obvious : less valuable candidates are more grateful for the opportunity they have been granted. They will work harder and remain more loyal to the company.

4. Jack Magic

Alibaba most likely wouldn’t have survived the competition from eBay, the SARS epidemic and the burst of the dotcom bubble without its charismatic leader, Jack Ma.

Ma’s unconventional personality is most visible during the company-wide events where he’d dress up, dance and sing but Alibaba’s employees are confronted with it on a daily basis. Employees are for instance asked to choose nicknames from Ma’s favourite novels. These nicknames are then so deeply embedded in their conscience that their colleagues forget what their actual names were. Their commitment to the company is such that early Taobao employees agreed to be the website’s first users selling all that they had at hand on the site. It’s also the Alipeople (aliren) who were the first users of Laiwang, the company’s failed attempt at launching a messaging app.
When a case of SARS was identified at Alibaba and its employees quarantined at their homes, they never stopped working, motivated by an email from their leader saying : “We care for each other and we support each other. We never forget the mission and navigation of Alibaba. Tragedy will pass but life will continue. Fighting with catastrophe cannot prevent us from fighting for the enterprise we love.”

Ma also bounds the employees together by finding them a common enemy to fight – be it eBay or another Western company – and defining highly ambitious goals – for instance, to create the world’s biggest ecommerce company (already achieved) or to surpass Amazon as a web services provider.

Although challenged on the domestic market, most importantly by Tencent, Alibaba remains by far the world’s biggest ecommerce company. Though its business model evolves, its culture remains intact. Its initial objective “to last for 104 years” seems attainable.

Why you can’t afford not having a mobile strategy

Whenever I hear sellers say they are currently redesigning their website, it makes me feel like if they bragged about purchasing a new fax machine. Over again we see signs that in a few years or even months merchants’ websites will become obsolete as online shopping is increasingly being confined to mobile apps.

A few stats that confirm this trend :

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What you can do :

  • there is clearly no point in building your own mobile app especially if you are selling niche products – mobile phone users become increasingly less likely to install new apps and once they have installed them – to allow notifications. We have to get used to the idea that mcommerce of the future will be split among two, three dominant apps
  • open a marketplace store – if you haven’t yet done so, do it now! there is an overwhelming choice of marketplaces which have an advantage over you as buyers trust them and know them – eBay and Amazon are household names and even small marketplaces have more money to invest in marketing than you do
  • make sure your website is mobile optimised – the less content you have on it, the better! Think about eBay’s recent decision to  change their sellers’ listings so that they can be easily viewed on a small screen – product descriptions have to contain up to 800 characters and cannot include any active content (JavaScript, Flash)
  • offer payments with PayPal / Amazon payments – if a mobile buyer has to fill in a lengthy form in order to complete the purchase, the odds are high she will give up before completing the checkout. Allowing your buyers to log in with PayPal or Amazon in order to make a payment makes it easier for them to pay without leaving the mobile device. It also helps instill trust as PayPal and Amazon offer buyers protection from fraud.
  • do it quickly! – mcommerce still accounts for less sales than ecommerce but if the current growth rates continue, this will change soon! You don’t want to wake up in a few months next to a brand new fax machine only to realise there is no one left to send a fax to as they have all switched to email
  • don’t forget that at WebInterpret we can create a mobile-optimised version of your website in various languages AND help you promoting it abroad.