ULG’s Language Solutions Blog

Retail TouchPoints: The Value of Localization as a Competitive Advantage in Accessing Multicultural Consumers

Original Publication: Retail TouchPoints

The turbulence of the past few years has left the world in a state of economic and political uncertainty, and the severity and impact of these varied events continue to unfold. What we know for sure is that consumer perceptions and choices are affected by culture, which also affects spending habits. To succeed in reaching potential customers where they are, your team must employ a culturally competent localization strategy to establish a competitive advantage.

Here are three insights to support your localization strategy:

Buying Habits are Tied to Culture

As researchers from the University of Illinois wrote in a paper in the Journal of Retailing, “despite the global similarities in many retail environments, consumers themselves differ.” Culture shapes consumer motivations, deliberation styles and decision-making, affecting every stage of the customer journey. A few examples of these differences include:

Asian-American consumers tend to be more conscious of social status than other American consumers and are therefore more likely to choose brand name items that signal their status, according to a study cited in the University of Illinois report.

Similarly, both American and Chinese high net worth individuals, defined as those with more than $1 million in assets, have different spending patterns. Wealthy Chinese consumers are more likely to spend on things such as luxury items, according to Agility Research and Strategy. American consumers, even those in the top 1% of wealth, are more focused on saving.

According to ING Bank, Germans and Belgians are more price-sensitive than French consumers, who are more apt to prioritize quality over price.

According to Hofstede Insights, Brazil’s national culture tends toward collectivism (loyalty to a group, such as extended family) and indulgence (prioritizing leisure time). American consumers also prioritize indulgence but are less likely to prioritize collectivism.

These cultural frameworks will influence how people from different cultures react to the current climate of uncertainty. As a result, simply translating your existing campaign will likely not have the outcomes you’re hoping to achieve. That’s why cultural understanding is critical when designing a successful localization strategy.

This is important even if you’re targeting U.S.-based consumers only. Consider that a 2019 report from the U.S. Census Bureau found that nearly one in five U.S. residents speak a language other than English at home. Therefore, if your team is hoping to succeed in today’s multicultural environment, cultural competence is a strategic must-have, no matter your location.

Culturally Relevant Market Outreach to Consumers Goes Beyond Language

It’s essential that you get the language piece right, but to be truly successful, your localization strategy must go deeper than words. A relevant recent example is Ebay’s operations in China. The company was outperformed by a much smaller local competitor, Taobao.

Chinese consumers tend to seek peer-to-peer interactions with sellers and other consumers as they decide whether or not to make an online purchase. Taobao’s convenient peer-to-peer instant messaging support gave it a competitive edge because the company’s customer experience was better suited to the target market.

Ebay did not update its Chinese-language site to align with Chinese consumer culture, and because of that it was forced to pull out of the Chinese market completely.

The lesson from this story is that cultural competence, or the lack of it, can make or break your connection with your audience and is a known driver of success.

Intelligent Use of Language Technology Drives Efficiency

With tools available online such as ChatGPT or Google Translate, everyone has direct access to language technology. For business use cases and applications, however, this publicly available language technology often falls short. Many language solutions partners (LSPs) offer their own curated neural machine translation (NMT) solutions that are trained and customized to your business verticals, resulting in higher-quality output that better matches your brand’s voice, style and tone.

When matched with post-editing from trained human translators, curated NMT leads to faster turnaround times and cost efficiencies without sacrificing quality. It’s a benefit to use these apps to create efficiency, but it would be a mistake to leave out knowledgeable humans entirely from the process. Their cultural knowledge and judgment cannot be matched by technology.

Language technology is most effective when it’s combined with human cultural understanding. Effectively maintaining a consistent brand across cultures is a balancing act. LSPs are full of experts with cultural understanding relevant to your industry. They should focus on training to ensure that their linguists understand your brand, your business and your goals.

Effective localization requires a culturally competent approach. By combining efficient technology with a marketing plan that takes into account not only your customers’ preferred language but also contains their cultural buying behaviors and communication preferences, you can turn localization into a powerful competitive advantage.


Topics: Localization