Realising the transatlantic trade opportunity
By Georges Berzgal, VP & Managing Director, Global Ecommerce – EMEA, Pitney Bowes
Transatlantic ecommerce between Britain and the U.S. is booming. What tactics should British retailers adopt to boost online sales from American consumers?
Transatlantic ecommerce between Britain and the U.S. is booming. Consumers on both sides of the Atlantic enjoy buying each other’s goods online after experiencing them on holiday, while often also seeing them used by celebrities in a heavily intertwined media landscape. For consumers in the U.S., many British retail brands hold a certain allure, offering a unique heritage that prides itself on high quality and refinement. Many of the well-established brands are accessible to consumers online, and so there is little that shoppers cannot get their hands on, if they want it.
U.S. consumers are some of the most active online buyers in the world, which is good news for British brands. Pitney Bowes’ Global Online Shopping Survey 2016 found that 45% of the population engages in some form of cross-border online shopping, and that a third completes its purchases via mobile. Forrester predicts that online sales in the U.S. will exceed around £390 billion by the end of the decade, and this is down to a number of reasons. The U.S. is one of the richest nations per capita in the world, and as a result, access to technology is the norm. Approximately 88% of the adult population is online and around 77% own a smartphone.
When considering that many retailers report up to 70-80% of website browsing now occurs on smartphones and tablets, it’s clear to see that the online shopping experience is being driven by mobility. Reducing customer friction inevitably leads to growth in consumer interest and sales generation, and British brands selling goods to the U.S. should be optimistic about the rise of mobile internet purchasing in the region.
Another driver for the voracious growth of cross-border ecommerce in the U.S. has been the introduction of markedly higher duty thresholds back in March 2016, which made it cheaper for American consumers to buy items up to the value of $800 from overseas without having to pay custom duties. This has prompted many buyers to search for brands outside of their borders to gain access to goods they would otherwise be unable to afford, when adding up additional tax and international shipping charges.
In addition, although British goods are often more expensive than those of other international markets, due to their high quality and reputation, U.S. consumers currently purchasing British goods online will be able to secure them at a much more preferential rate than two years ago, due to the value of the sterling pound declining following Brexit. British brands may therefore have lower margins on transatlantic trade, but failing to meet demand from American consumers will drive additional loss of revenue, which is not a viable option for any globally competitive brand.
So, the demand from U.S. consumers is apparent, but how are British brands responding to it?
A recent study found that 48% of British retailers who are targeting or planning to target U.S. shoppers with online offerings are doing so with their existing U.K. website, with no localisation efforts for entering that market. This is a common error. First-rate online user experience is crucial for brands distributing to foreign markets, and although seeing increased demand for products may be sufficient for some, boosting relevance to specific markets is a must for enhancing those consumer transactions.
This could be as simple as offering prices in local currencies or facilitating local payment methods. Going one step further, a trader could enable customers to pay duties and taxes upfront at the checkout stage, allowing faster delivery services. Online reviews and social sharing are now a key part of purchasing goods online, and if consumers find a retailer to be dislocated and out of touch with their needs in their local market, they will take their business elsewhere, and let others know about it. Quite simply, retailers must adapt their store fronts to individual markets or they will pay the price and lose out to more tailored online vendors.
The global retail market is developing very quickly and consumer behaviours are evolving to expect rapid, hassle free online shopping, often while on the move. Growth opportunities have shifted from local to global and retailers have no choice but to adjust their models, especially if they are facing declining demand or competitive pressures in their domestic markets. In the U.S., demand for British brands has existed for a long time, but now technology and well-developed logistics networks have made it possible to enable widespread and cost-effective access to British products, for all consumers worldwide.
Retailers must ensure they are offering a locally relevant experience for consumers to seamlessly browse and purchase their products. The challenge for British companies is to find a trusted partner to facilitate global demand at a cost-effective price point for the end consumer. Pitney Bowes has realigned its entire business behind global commerce. We help retailers connect without compromise to over 220+ countries and territories on the consumer’s terms. With unified commerce, we are levelling the playing field for retailers to find ways to drive more growth. We are giving them the tools to prosper in the modern retail environment, which allows them to focus on what they do best: sell great products in whichever markets demand may reside.
Learn about Complete™ Marketplace from Pitney Bowes, a turn-key solution that is simple and scalable, enabling your brand and products to appear on leading global marketplaces.
You can also download the full 2016 Pitney Bowes Global Online Shopping Study report to learn more about the buying preferences of global buyers.
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