Gap In Huge Global E-Commerce Rollout

Written by Evan Schuman
August 19th, 2010

On paper, global expansion limited to E-Commerce sites should be light-years easier than doing it with overseas brick-and-mortar locations and employees. In reality, not so much. It’s certainly easier. But with tariffs, taxes, postal codes and local customs, delivering a seamless and fully integrated experience is next to impossible.

Gap, along with its Banana Republic, Old Navy, Piperlime and Athleta brands, announced August 12 plans to move from a site supporting one country to one supporting 65 countries by the end of December. The $14 billion chain is tackling the expansion with two parallel efforts: It’s going to build its own physical fulfillment centers in both Canada and the U.K., in addition to crafting dedicated customized E-Commerce sites for those two countries; and it’s using a vendor to add a small Flash module to replicate local checkout.

“We’re going to be feeding all customers into [Gap] as though they were local,” said Kris Green, chief marketing officer of the global vendor called FiftyOne. “Our checkout is built in Flash. They never leave that merchant’s Web site to do checkout. We’ve built conditional logic that is wrapped around elements of the Web site and can be made invisible.”

Gap likes this approach because it eliminates many of the surprises that global consumers often see at checkout. “It’s an easy experience,” said Gap spokesperson Kris Marubio. “If someone shops with us from Switzerland, they’ll see the total full order amount in their currency, including all duties, tariffs, calculating currency exchange rates. Everything will be all upfront.”

Sometimes, though, upfront is not the ideal situation. On Tuesday (Aug. 17), a vendor called Bongo International announced an extension to its parcel forwarding service in the U.S. with the goal of helping U.S. retail sites to unknowingly ship to other countries. Non-U.S. consumers would be given a U.S. address to use for E-Commerce purchases (315 Seaview Ave. in Bridgeport, CT). Some chains might have a hint that it’s a non-U.S. order if an international credit card is used, but the domestic address makes it easy.

Bongo says it makes its money by charging $5 signup fees, plus optional monthly fees, and it mostly covers costs through steep discounts (in the 70 to 80 percent off range) from shipper DHL. The company admits that some retailers are watching out for its service—”Apple specifically targets parcel forwarders. They don’t want the iPhone going overseas,” said Bongo Sales President Greg Sack—and that a large number of people shipping to the exact same Connecticut address could easily make some retailers suspicious.

One way or the other, it looks like retailers will be doing more overseas shipments next year—whether they know it or not.


Comments are closed.


StorefrontBacktalk delivers the latest retail technology news & analysis. Join more than 60,000 retail IT leaders who subscribe to our free weekly email. Sign up today!

Most Recent Comments

Why Did Gonzales Hackers Like European Cards So Much Better?

I am still unclear about the core point here-- why higher value of European cards. Supply and demand, yes, makes sense. But the fact that the cards were chip and pin (EMV) should make them less valuable because that demonstrably reduces the ability to use them fraudulently. Did the author mean that the chip and pin cards could be used in a country where EMV is not implemented--the US--and this mis-match make it easier to us them since the issuing banks may not have as robust anti-fraud controls as non-EMV banks because they assumed EMV would do the fraud prevention for them Read more...
Two possible reasons that I can think of and have seen in the past - 1) Cards issued by European banks when used online cross border don't usually support AVS checks. So, when a European card is used with a billing address that's in the US, an ecom merchant wouldn't necessarily know that the shipping zip code doesn't match the billing code. 2) Also, in offline chip countries the card determines whether or not a transaction is approved, not the issuer. In my experience, European issuers haven't developed the same checks on authorization requests as US issuers. So, these cards might be more valuable because they are more likely to get approved. Read more...
A smart card slot in terminals doesn't mean there is a reader or that the reader is activated. Then, activated reader or not, the U.S. processors don't have apps certified or ready to load into those terminals to accept and process smart card transactions just yet. Don't get your card(t) before the terminal (horse). Read more...
The marketplace does speak. More fraud capacity translates to higher value for the stolen data. Because nearly 100% of all US transactions are authorized online in real time, we have less fraud regardless of whether the card is Magstripe only or chip and PIn. Hence, $10 prices for US cards vs $25 for the European counterparts. Read more...
@David True. The European cards have both an EMV chip AND a mag stripe. Europeans may generally use the chip for their transactions, but the insecure stripe remains vulnerable to skimming, whether it be from a false front on an ATM or a dishonest waiter with a handheld skimmer. If their stripe is skimmed, the track data can still be cloned and used fraudulently in the United States. If European banks only detect fraud from 9-5 GMT, that might explain why American criminals prefer them over American bank issued cards, who have fraud detection in place 24x7. Read more...

Our apologies. Due to legal and security copyright issues, we can't facilitate the printing of Premium Content. If you absolutely need a hard copy, please contact customer service.