Brands and retailers are staring down the throat of a $1 trillion opportunity and taking advantage of this incremental revenue is really within their grasp. Retailers around the world simply have to embrace the notion of selling cross-border. And fortunately, technology now exists that makes selling cross-border a simple add-on to an existing global digital strategy.
According to Accenture, cross-border, business-to-consumer sales totaled more than $500 billion in 2017, and the firm expects that figure to double by 2020. Selling cross-border, as part of an overall digital strategy, is quickly becoming the norm for brands and retailers of all sizes, anywhere in the world.
There are several compelling factors contributing to both the rapid growth and staggering opportunity available to brands and retailers who sell beyond their national borders.
Factors Contributing to the International Opportunity
Global digital access is exploding
The simple fact is more people today than ever before are online, and by using global search, are discovering brands in unprecedented numbers. Recent reports cite more than 4 billion people around the world ? that’s well over half of the world’s population ? are now using the Internet. And this number continues to grow. Just last year alone, almost 250 million new users came online for the first time.
Mobile gives more people Internet access
The number of people around the world who are coming online via mobile technology is also growing. Thanks to mobile’s accessibility, ease of use and affordability, it’s estimated that by 2019, 4.7 billion people around the world will be connecting to the Internet via mobile devices. Mobile allows people, even those in remote parts of the world like India where mobile penetration is at 79 percent-plus, to easily connect online. This worldwide connectivity means there are more shoppers around the world with whom brands can now engage.
Social media connects brands from anywhere with consumers everywhere
The proliferation of mobile technology is making it easier for people around the world to access social media, which is often mobile-based. It’s estimated that more than 3 billion people around the world are active social media users and 61 percent of those users in North America, and 34 percent of those around the world, access social media sites via mobile devices. Billions of consumers across the globe are now able to find brands from anywhere in ways they weren’t able to five years ago.
If customers can visit your site, they expect to buy
As more and more consumers find e-commerce sites around the world through social media and search discovery, there is an expectation that these sites should be easily shoppable. Unfortunately, due to obstacles that have historically plagued cross-border e-commerce, that is often not the case.
Challenges With Cross-Border E-commerce
While the opportunity to expand a brand’s business internationally is compelling, operations and logistics of selling cross-border have proven challenging for many brands, which struggle with the complexities of crafting the best customer experience for their shoppers in global markets that feels local to them. If a cross-border strategy is not executed correctly, this can result in a poor experience and lower conversion rates at the expense of draining merchant resources and risking high costs. The primary barriers to customer purchase on a retailer’s site traditionally include:
Shoppers want to see product prices in their local currency so that they don’t need to calculate with exchange rates and also, they want to know that they will be charged in their local currency once they place their order.
Taxes and duties
Shoppers don’t want to spend time trying to look up import codes or guessing how much they will pay for taxes and duties on their order, and quite often retailers don’t provide any information on duty and tax for each locale or simply estimate.
Customers in different countries expect checkout on a website to accept their preferred payment method. For example, while traditional credit cards are common in the U.S., alternative payment methods like WeChat Pay and AliPay are very popular in China, Klarna in Scandinavia and iDeal in the Netherlands. Not providing payment options specific to certain countries can deter customers from completing their purchase.
Shipping, delivery and returns
International shipping costs can be high, yet customers expect cheap if not free shipping. Also, unless a merchant has designed an international logistics plan their delivery times for international are generally slower compared to local brands and multiple tiers, like Express or Two-Day delivery, are rarely offered. Returns can be prohibitively expensive for the end consumer, and many international retailers may not even offer the option.
The impact of local language varies by country and category. In some regions, such as Asia, ensuring that checkout is in the local language is important else consumer trust can be eroded at the last hurdle and result in customers being unwilling to transact.
Security and privacy
Between General Data Protection Regulation, or GDPR, and recent security breaches, customers worry about their personal data. It will be nearly impossible for customers to trust a brand and transact on the site if the experience doesn’t feel local to them or if important information isn’t clearly communicated.
Fortunately, innovative solutions have evolved that solve these challenges.
Innovative Technologies Allow Brands and Retailers to Thrive Internationally
Fully flexible, modular and cloud-based solutions are enabling brands and retailers to tap into the international market and scale efficiently as they expand overseas. These technologies also serve to solve the problems that have historically plagued retailers by giving consumers the “local” feeling they need to confidently purchase from an international e-commerce retailer.
These new solutions provide the right tools to better manage cross-border logistics, to reach a broader international customer base and enhance the customer experience through full localization of pricing, product catalogs, checkout and fulfillment. Consumers can transact using numerous familiar payment options, including digital wallets and cryptocurrencies. Various shipping options are made available to maximize speed and minimize cost. The end-to-end shipping process including returns is simplified and streamlined. Real-time duty and tax information is automatically generated by region and clearly displayed for customers to see before committing to a purchase. And finally, pricing can be controlled by the brands and retailers in each region to ensure customers see pricing in a familiar currency with price rounding to maximize sales conversion and match local conventions.
The stakes are high. Brands and retailers have to recognize that if they don’t leverage the enormous international e-commerce market, their competitors surely will. Fortunately, thanks to increased global digital access, mobile technology, social media and innovative new technologies, retailers now have an easy way to grab a piece of the $1 trillion pie that is international commerce. Leveraging a complete cross-border commerce platform that eliminates the historic friction points now makes attracting and serving an international customer base easier and more successful than ever before.