Achieve +32% Increase in ROAS by Simply Localizing a Store
+32% Increase in ROAS. That's what we saw after one of our partners decided to set up a secondary store which is localized for Australia.
Before this, we used to target the big 5 English speaking countries with the same ad campaigns and send all traffic to one store with a ".com" domain. The traffic coming from Australia was relatively low, most of it was coming from remarketing campaigns, and the overall performance of the country was subpar.
This is where the idea of testing localized the store with the ".com.au" domain came about.
And it has resulted in a +32% ROAS lift!
Plus, you know what might be the craziest thing about this? We see this increase in ROAS at spend levels that are already a few times higher than what we spent on the ".com" store for this country!
Now - you might be wondering what makes this second store different from the first one and how it's possible that just by localizing the store, we saw such an increase in ROAS?
Let's break it down, shall we...
1. The logo and color scheme changed slightly. The website theme, ad copy, layout, and apps all stayed the same.
2. The website currency changed from USD to AUD (checkout currency also changed).
3. The domain changed from a .com area to .com.au.
4. Lastly, the supply chain. Whereas orders to Australia could have taken several weeks to arrive, for this localized store, it's a matter of days as they have stock in Australia.
The changes above are relatively easy to make except for maybe the supply chain and indeed could be implemented by most businesses out there.
Why did we see such a massive difference in ROAS just by changing those relatively simple things?
First of all, we saw a slight increase in ATC % of the store. This might have happened due to people seeing the .com.au domain and the fast shipping times, informing them that their order will be shipped from Australia.
Secondly, the most significant difference was the increase in conversion rate from Add to Cart to Initiate Checkout to Purchase.
The domain and shipping times might have made customers feel a bit more comfortable knowing that their order is shipped from Australia, but it's more likely that the change in currency has made the most significant impact here.
If you're driving traffic to both the US and Australia, not mentioning the currency of the prices on your store or not using a reliable currency converter, an Australian visitor might assume the prices are in Australian Dollars.
Now imagine you've decided to buy this product which you think costs AUD $50, only to find out halfway through the checkout process that the price was listed in USD, which means that you need to pay ~50% more than you initially thought you would. That's a bummer....
Long story short, if you have the capacity to localize a store, primarily if you can also fulfill orders from that country, it might be worth a try!
Also, not to forget the other advantages that come with local fulfillment, but that's a whole topic on its own.
Thank you for reading!
- Ricardo, Senior eCommerce Growth Expert at AdKings Agency