Global Ecommerce and International Expansion | Pitney Bowes

Tackle cross-border ecommerce with a global mind set

By Patrick Close, Borderfree Business Development and Strategy, Pitney Bowes

Here’s something that’s not getting enough attention from retailers: cross-border ecommerce. For those out there who are wondering how to make the juice worth the squeeze, your questions are about to be answered.

The market size of cross-border ecommerce is growing rapidly and is expected to eclipse USD $1 trillion in 2020, according to a 2016 report by Accenture & AliResearch. That’s trillion with a “T.” For context, cross-border sales were $230B in 2014.

A number of factors are influencing the “why.” There’s an economic convergence of expanding middle classes in emerging markets and an unprecedented openness to buy cross-border in developed markets. On a micro level, shopping local has turned global because of product availability, wider selection, better prices, authenticity and convenience.

Behind the curtains of cross-border ecommerce is a complex ecosystem of rules and regulations, import/export restrictions, currency fluctuations (oh hey, Brexit), cultural norms of product pricing, payment method expectations, and the onus on retailers to be transparent with total costs at checkout. On top of that, the logistical challenges of international shipping and returns – now an extension of your brand – can undercut your ability to win the day and gain long-term brand evangelists.

How do you tie it all together and get your global muses the products they want, with the experience they deserve, and drive revenue from a channel that’s still developing for most retailers? Attack the opportunity with a global mindset, don’t cut corners, and leverage technology partners who have experience executing in the trenches.

There are several key components of localisation: consumer pricing strategy, currency and alternative payment methods. Combined, these are critical pieces of an optimised international customer experience (CX) and will pay dividends if you do it right.

Let’s flip the script. Imagine shopping on J Crew or Target from the U.S. and only seeing prices in $USD or £GBP? That experience would feel “off” and it’s important to understand that global consumers are no different in their expectations. Displaying local currency is table stakes in 2016. But, displaying local currency must also accompany the settlement in local currency. Not sold? Look at the PayPal/Ipsos Cross Border Report from 2015. In total, 73 percent of shoppers want to pay in local currency and 45 percent of shoppers don’t feel comfortable buying in a foreign currency.

They want to convert – make it easy for them.

For global retailers, omnichannel pricing is increasingly important for those with brick and mortar stores abroad, and also vital for emerging brands with global ambition. How do you ensure pricing is optimised for each country you’re selling into? What we’ve found is that you’ll encourage conversion when products reflect a customer-friendly price. Rounding numbers to cultural norms makes a psychological difference to consumers. For example, sell those fresh pair of Air Jordans to German shoppers at €149.95 rather than €149.13. Seems small but the “devil is in the details.”

Why should you care about alternative payment methods and why do you need them? Well, they let your customers use their preferred payment method at checkout which mimics a domestic transaction. If you’ve lived or travelled abroad then you’re aware that not everyone in the world uses a Visa, MasterCard, AMEX. Providing payment methods that are familiar to international consumers is essential. Examples that are critical to checkout success are providing Alipay and UnionPay in China, iDeal in the Netherlands and SOFORT for German shoppers.

All of these features tie back to your CX and your brand, and localisation adds tremendous value. You’ve put in all the hard work getting customers to your site via affiliates, paid search, email, PLAs and SEO. It’s time to capitalise. 

Anyone can enable international shipping. What kind of experience do you want to deliver?

Your website is only the start of customer engagement and the experience continues through delivery. The way in which orders are tracked and delivered will forge a lasting memory in the mind of global consumers (the same as it does in the U.S.). Be aggressive in your management of perceived consumer challenges such as high shipping costs, long delivery times and lack of returns. Here are a few ideas to combat those friction points:

  • Introduce free shipping thresholds (what you sacrifice in margin you’ll make up in volume)
  • Provide Standard and Express delivery at checkout and let your customer choose their experience
  • Deploy a localised carrier network to your top markets (e.g. SF Express or Cainao into China, Aramex into the Middle East, and Wex24 into South Korea)
  • Be precise with delivery windows at checkout (don’t have the data? Time to get it)

Finally, it’s time that international returns are commonplace. Global shoppers expect it and the technology is out there to make it happen. Let’s get it done.

The point is this: building and maintaining in-house technology is expensive and timely. It’s often the business that is on the hook to deliver results on functionality, costs and risk exposure. Couple that with the perception that retailers must be experts in global ecommerce to sell cross-border and the thought of it can become overwhelming. It doesn’t have to be.

Retailers now have technology partners like Pitney Bowes at their disposal to break down those roadblocks and earn loyal cross-border customers. It’s why we’ve developed technology-driven solutions that remove that burden and enabled 300+ iconic retailers and brands of all sizes to focus on their core strengths: creating and delivering great products and customer experiences. 

With Borderfree Retail, you can craft unique purchasing journeys for buyers in any country, and ensure that no matter where your customers are located, they’ll enjoy a buying experience that reflects what they would expect from a local retailer. Ultimately, you’re able to grow your percentage of revenue from cross-border customers, turning an area of potential growth into a game-changer for your business.

Deliver products consumers want with the experience they deserve. Can you deliver? Read more about the importance of localisation to today’s shoppers in the Pitney Bowes Global Online Shopping Study Report


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