Multi-store or multi-currency localization - which option is best for Shopify Plus?
As you have no doubt noticed, Shopify is growing fast. Back in August, Shopify announced its Q2 results – and the news was spectacular. It brought in $362 million in revenue, up 48% on the previous year. Buoyed by this news, the company now forecasts annual revenue of up to $1.53 billion.
And company CFO Amy Shapero made it clear how the company plans to use these increased funds: “ongoing activities and investments to help merchants … sell more and sell globally.”
You need to localize … but how?
This represents an incredible opportunity for Shopify stores and apps. 70% of all ecommerce transactions take place outside of North America. And while going global used to be a huge operation that was only available to huge companies with big budgets, now international ecommerce is a realistic option for retailers of all shapes and sizes.
Is it time to take your Shopify Plus store or app international? This Shopify Partner’s blog is perfect for judging whether you’re ready to go global.
And once you have decided that now is the time, you’ll need to focus on localization – the process of adapting your store to different international markets.
This blog is here to help. Here’s what we’ll cover:
- A localization checklist
- Why focus on currency?
- Your currency localization options – multi-currency or multi-store
- Key question 1: Which international markets are you planning to enter?
- Key question 2: How confident and committed are you to each of these markets right now?
- Key question 3: How quickly are you planning to enter this market?
- Key question 4: How often do you use flash sales and discounting?
A localization checklist
At first glance, localization can seem like a fairly straightforward process. Just find a translator or a local and get the website translated and you’re basically there, right? Unfortunately, it’s not that simple. A robust localization strategy needs to include:
- Copy: The essential written content you’ll need to get translated is your home page, product pages, and customer support materials like FAQs. Then think carefully about the marketing strategy you have. If it depends heavily on organic search, you’ll need additional content. You may be able to use some of your evergreen content, but other blogs or articles will probably need to be replaced with something specific to the new market your client is entering. Finally, consider brand building. Your about us page, or any materials that build a clear identity and brand, could also be translated.
- Visuals: You should aim to tailor your images based on the market. And make sure you think about fonts as well. Will your current fonts function well in other languages?
- Video: At the very least, you’ll want subtitles for any videos on your site, and maybe also for videos used in ads or on social media. A more in-depth approach would require creating videos specifically tailored to an individual market.
- Dates and numbers: A small, but crucial point. Don’t forget that numbers and dates are expressed differently in other countries. And this may not even relate to language. For example, a Spanish language page on your website might be designed to cater to customers from both Spain and Mexico. But numbers are written differently in these two countries – in Spain, you write 2.456,00 while in Mexico the same number would be expressed as 2,456.00
- Currency: You’ll want to ensure products are offered to customers in their local currency. That’s what this blog is all about, and in a minute we’ll get into the details of your strategy for this.
Market research is going to be critical to all of these areas. Finding local partners or conducting in depth research will help ensure you adapt your store to suit local needs.
This guide for localizing Shopify apps is actually super useful for both merchants and app developers. There’s also a great Shopify blog on finding local partners– a smart move that can speed up the localization process.
Why focus on currency?
While every aspect of the localization process requires careful thought and consideration, the rest of this blog will be focused on one area: currency. We’ll take a look at the two main options you have to choose from. Then we’ll go through a step-by-step process to decide which approach is best for them.
Focusing on currency makes sense because it is one of the single most important localization decisions you’ll be making. While elements like visuals and video matter, they don’t have such a direct impact on sales, and especially on cart abandonment.
But currency does.
Research by Apparel mag shows that 25% of customers will stop shopping on a site if they can’t pay using their local currency. And lack of a native currency at checkout accounts for 13% of abandoned carts.
Why does local currency matter to shoppers so much?
- Trust: Shoppers are sensitive about their money and the process for making payments. Even small deviations from what they expect can lead them to be suspicious of a site. Offering local currency helps to make your site feel familiar and trustworthy, and to put shoppers at ease.
- Transparency: Quite simply, it’s a pain to have to research exchange rates to see how much an item is actually going to cost. Offering localized prices makes everything crystal clear.
So, let’s take a look at the 2 options on offer for localizing currency, then go through the decision-making process.
Your currency localization options – multi-currency or multi-store
In Fall 2018, Shopify launched multi-currency for Shopify Plus stores. Powered by Shopify Pay, this feature enables stores to offer prices in 10 different currencies without needing to have a separate domain or store for each location. Instead, Shopify detects where the shopper is located and automatically presents prices in their local currency. These prices are rounded to .90 or .95 values so they don’t appear random (it just feels weird to see a sweater priced 57.62, right). Prices are also adjusted based on current exchange rates, so there are no nasty surprises if prices on the markets suddenly fluctuate.
So with Shopify Plus, multi-currency is your first option. Run one store with one domain, and let Shopify sort out the currencies.
The alternative is what’s usually referred to as a multi-store, or multi-domain, approach. With this approach, a separate domain is created for each new international market. Then prices are set in the local currency on each of these domains. This is done using expansion stores, which are available to all Shopify Plus stores – you get 9 expansion stores as part of the Shopify Plus package.
Like many parts of the localization process, choosing which of these options is best for your client requires careful consideration. So here are 5 questions to consider to help you work out whether multi-currency or multi-store is the best option.
1. Which international markets are you planning to enter?
This first question should help to narrow down your options a lot. As of Fall 2019, Shopify’s multi-currency feature covers 10 currencies:
- Australian dollar (AUD)
- Canadian dollar (CAD)
- Danish Krone (DKK)
- Euro (EUR)
- Hong Kong dollar (HKD)
- Japanese yen (JPY)
- New Zealand dollar (NZD)
- British pound (GBP)
- Singapore dollar (SGD)
- United States dollar (USD)
Other currencies can still be shown on your store, but shoppers won’t be able to use them at checkout. So, if you are planning to expand in countries which don’t use these currencies, then a multi-store option is what you’ll need.
That said, Shopify is continually adding new currencies to this feature. And given its strategic aims to grow internationally, you can expect there to be more currency options in the coming future. Keep checking to note which new currencies are added.
Another consideration is how close the intended future markets are both to the present market you’re operating in, and also to other new markets you plan to enter.
If they are similar, for example if you currently sell in America and are planning to sell in Canada too, then a multi-currency option will work very well. While there are some differences, these markets observe similar holidays and have similar shopping periods. Plus seasonality and trends are likely to be closely matched. The same would apply if you already have a store for the Australian market, and now want to expand into New Zealand.
On the other hand, if you intend to open stores in different continents, or across regions where shopping patterns and behaviour are significantly different, a multi-store approach would be wiser. Why? There are a few key reasons.
1. Seasonality. With a multi-store approach you can adjust the pricing for one region without changing the price in other areas. With multi-currency, price changes will occur in all currencies. So where there is a big difference in seasonal shopping behavior, this can be a problem. For example, analysis by Facebook of the 2018 holiday season shows that there are big differences as to when the holiday season begins. Changing prices in all currencies might mean that you act too early, or too late, in terms of hitting peak sales periods with the right prices. There may also be shopping events that are huge in one location – like singles day in China– which don’t exist elsewhere.
Single’s Day in China is by far the biggest ecommerce shopping day in the world.
You need the flexibility to offer special deals or offers in one location without changing your pricing elsewhere.
2. Demand. Demand in different parts of the world will vary. This can be down to the maturity of a market, cultural factors, or the level of competition. But if levels of demand vary significantly, you will need flexibility over your pricing. Where competition is fierce, you may want to lower your prices to gain an edge. Where the market is unsaturated and demand is high, you may want to raise your prices to cash in.
3. Shipping. A simple practicality is the fact that it may cost more to ship to certain areas, and this could necessitate a price increase. Again, a multi-store strategy will give the flexibility to set pricing differently for each region.
One final consideration is the native currency that your store operates in. With a multi-currency solution, prices will be converted from this native currency based on the exchange rate when the purchase is made. So think about how volatile exchange rates are likely to be (tough to predict, I know). If the value of your native currency changes dramatically in relation to others, then the prices shown in other currencies will constantly change. So a potential customer shopping in another currency may check out a product one day, then return the following day to see the price has changed because the exchange rate is different.
2. How confident and committed are you to each of these markets right now?
This is another really big question. That’s because a multi-store strategy will cost more. You won’t need to pay for the expansion stores (9 stores are included with the Shopify Plus package), but you will need to pay per expansion store for any apps you have on your current store.
And if you are going for the full localization process, the costs can be very high. Even if you don’t translate content straightaway, you still can’t just copy and paste existing texts from one domain to another.
Why not? Duplicating the same content on multiple domains can harm your SEO. So this means even if the store is kept in English, the texts will still need to be changed for every new store.
And of course, to do things properly we’re talking about market research, translating content, creating custom content for each specific location – all that jazz. And this process is going to cost.
So, if you are just planning to “dip your toes” into a new market, don’t follow a multi-store strategy, at least not at first. It can be a big outlay, and if you’re not sure how committed you are to this market, it may just end up as money wasted.
Bear in mind Shopify’s multi-currency feature has some neat solutions built in already. Here’s how the same product page looks in three different currencies using multi-currency:
It is easy to issue refunds – these will simply be made in the currency the purchase was made in. And many of the apps you use will also be compatible with multi-currency, though you will need to check for each app if this is the case.
Basically, multi-currency is a much more affordable strategy that is well suited to trying out new markets without having to invest heavily. If a new market does pick up, you can always switch to a multi-store approach.
3. How quickly are you planning to enter this market?
Along with being a less expensive option, multi-currency is by far the faster option as well. It literally takes a couple of clicks - here’s the step-by-step guide to how to do this. You should always check the converted prices, and you’ll need to test out the apps you use to check that they can handle the new currencies. But all told, this process isn’t going to take you long.
So if you have spotted an opportunity in a market and want to get in straightaway, multi-currency is the right choice. As this blog explains, you can check your Sales by Billing Country report in Shopify Admin to see where your international clients are from. If you spot a sudden spike in one country, multi-currency enables you to quickly adapt to capitalize.
(Source: Shopify partner’s blog)
A multi-store approach is a bigger investment in terms of time. From setting up new expansion stores, making sure your apps are set up and working for these stores, and adding and adjusting text and images, there is a lot to do.
4. How often do you use flash sales and discounting?
It’s time to think about your marketing and sales strategies. First up, let’s consider how often you run flash sales or discount their products.
If the answer is not often, a multi-currency strategy should be sufficient. Checking that your apps for setting up and promoting discounts support multi-currency is necessary. Once you have this cleared up, running the occasional sale should be fine.
But if the answer is that you run regular discounts, especially flash sales, then a multi-store option is more suitable. That’s because, as we’ve already established, this solution offers much more flexibility for both the price levels of individual products, and when prices are changed in specific localities.
Let’s imagine you want to run a flash sale. The most effective flash sales are timed to run when shoppers are most active and likely to buy. You dig into your analytics to see on what days and at what times traffic and purchases peak. Then you run your sale at the best time based on your audience, keeping it as short as possible. But with a multi-currency approach, dropping your prices would have to take place at the same time across all your stores – that might be 9 am in Europe but 2 am in the US.
It’s decision time
Here’s a summarised version of the points we have just covered.
A multi-currency strategy is going to be the right choice if you:
- are targeting markets which Shopify multi-currency already caters for;
- are targeting international markets that are similar enough in terms of location, market, seasonality and buying patterns. Eg. Australia and New Zealand
- want to test out a market before fully committing.
- want to quickly enter a market.
- only use flash sales and discounts occasionally.
A multi-store strategy is the right choice if you:
- are planning to expand into a market which is not catered for by Shopify multi-currency;
- are expanding into markets with very different seasonality or demand to your existing markets;
- are expanding into a market where shipping costs may be significantly different;
- are fully committed to your international development and are ready to spend time and money on localization;
- rely heavily on flash sales and regular discounting, and therefore need flexibility when it comes to pricing.
Currency is just one of the many decisions you will have to make during the localization process. But, because this decision touches on core elements of your business, such as market position and sales strategy, it’s a great place to start the conversation.