Revolve SVP’s Globalization and Localization Playbook

Amazon.com. Here, Li discusses how Revolove’s global growth is being fueled by localization strategies that deliver the best customer experience in each region. Inside Retail: What’s your role at Revolve? Kai Li: That’s a really good question. When I ask people at different companies what their day-to-day responsibilities are in a country role, the answers vary. When you think about international roles, we have geographic scope. The best way to define my responsibilities at Revolve as VP of international is everything outside the U.S. I’m responsible for profit and loss in international markets. That includes operations, customer service, logistics, warehousing, currencies, and finance. There are two areas I’m less involved in: merchandising, because you need a really big team to run that, and brand marketing. I’m more of a back-office, “Excel spreadsheet” person looking at profitability than (someone who) parties with influencers. When I was at Shopbop, all I could do was marketing. I couldn’t do payments because there’s a giant business unit called Amazon Payments that I wasn’t allowed to have my hands on. And then logistics was very difficult for me to get involved in because of the way the company is organized. The international roles are structured differently than in other departments that are vertical – the international roles intersect horizontally. At Revolve, I intersected with pretty much all the different functions. IR: When did Revolve go global? KL: In 2011, Revolve expanded internationally, and Australia was one of the top 10 markets for the brand. When successful e-commerce companies go international, they do it in stages. In 2008 and 2009, we had a lot of customers from all over the world knocking on our door, wanting to buy from us, but we didn’t ship to (every) country. What we did was simple, we started using the United States Postal Service to ship to customers all over the world. In six months, we saw the world in color—data and demand coming from different global markets. IR: And what does the data suggest? KL: We saw demand coming from Australia, the U.K., and Canada. But the thing is, as you expand and open up your product to the world, you start getting valuable feedback. The data is telling you, shouting at you, “Hey, Australia is important, Canada is important, and the U.K. is important.” From there, I started looking at those markets and I saw that we had to improve our service offering. Awareness is one thing, but we’re e-commerce, so to generate revenue, awareness times conversion, and conversion really makes that service component difficult. For a company like Revolve, and almost all retailers, retention is probably the secret sauce to longevity and compound growth—and great customer service unlocks that. We built a good service to drive repeat customers. Australia, the U.K., and Europe were the first countries we unlocked. Then we entered five markets and invested in them independently of marketing or local presence to leverage long-term growth. (Generally speaking) the top five markets account for 80 percent of national income. The three stages of global expansion are: one, just open up; two, go in with local service offerings; and (three), pick a handful of strategic markets to invest in over the next five to 10 years. Many successful e-commerce companies do the same thing. IR: What are the key elements to unlock? KL: Logistics is part of that. We want to provide customers with what I call a native service. When I say native service, I mean the speed of shipping is similar to the average local company. Accepting local payment methods was another element that allowed us to return the same amount that was charged to the customer. Customer service is important, and a huge part of that is the website itself. In Australia, we provide customers with three-day shipping, free local returns, payments, and a local customer service manual. In some ways, I think we are very local, except for the goods that come from the United States. IR: Does Revolve have a localized Australian website and if so, when did it launch? KL: Australia was an easier market to expand and localize – compared to the Middle East, China and South America. Australia was the first market we localized to because we saw it as an easy target. This is because of the similarities in language and consumer behavior. When localizing for the Middle East, we had to develop an Arabic website that runs from right to left, which is much more difficult than creating a website for Australia. Localizing for Australia is relatively straightforward. I like to provide the best service and there are basically two parts to achieving that. One is marketing and the other is operations. Operations has a very long list that includes services and payments, which means we have to be able to accept Australian credit cards and process refunds in local currency. It’s funny when you think about international business, there are so many things that come naturally that you shouldn’t do, and most companies do it. You want to make sure you charge the customer the exact amount that’s displayed on the website and refund them the exact amount that was charged, but that’s not easy. Most businesses charge cross-border fees, which fluctuate based on exchange rates. Another is international transaction fees, which are added to credit card fees and regular credit card fees. IR: What challenges did you face as you grew in Australia? KL: The biggest challenge we faced in Australia was building a returns program. We now offer free returns in Australia. Anything you buy on Revolve is completely free to return. We built a returns hub in Australia to streamline the process and provide a faster returns process for customers. Previously, the return had to travel to the US before we could issue a refund, and we wanted to refund the customer within seven days. Another key investment we made in Australia was working with local influencers as part of our local marketing strategy. IR: As a global brand, how do you ensure local customer service? KL: Taking Australia as an example, Revolve has a local toll-free number that connects to the US or one of our global customer service centres. IR: How has Revolve adapted to customer feedback? KL: At Revolve, we are passionate about the customer and strive to provide the best service we can. Previously, Revolve only used express shipping methods, which are expensive to operate. Revolve used to offer free shipping on orders over $100, and now we offer free shipping on orders over $50, although it will take a little longer. Now, with our low-cost shipping service, Australian customers can enjoy free shipping on purchases between $50 and $100. In this category, Australian Post provides delivery. It takes longer to arrive, but is significantly cheaper than DHL. IR: What led to this decision? KL: Customers have been knocking on our doors asking for it. We know this because we are passionate about the customer. I personally read every customer review that is rated as ‘less than good’. And we draw conclusions from that. Many customers from Australia asked us to reduce the pressure of shipping, which we did. IR: Have you noticed a lot of interest in this offer? KL: Many customers have opted for the slower but cheaper shipping option.