Global retail: Do you have what it takes to expand internationally?
By Rachel Martin, Global Director Product Marketing, Global Ecommerce, Pitney Bowes
Technology is the engine that drives global commerce and it’s pushing retail to new heights worldwide. The Internet allows buyers in one region of the globe to search for and find goods half a world away. Increasing digital access empowers consumers in emerging markets with the same level of purchasing power buyers enjoy in developed parts of the world. And mobile’s rising influence allows these transactions to take place on new channels, in any location.
Retailers stand to reap the benefits of all this new demand in the form of higher cross-border sales. Global ecommerce is growing by double-digit percentage points on a yearly basis with approximately 20 percent of the average retailer’s online traffic coming from IP addresses located outside the company’s home region. This suggests that up to one-fifth of potential sales could come from international buyers.
But are merchants fully prepared to maximize this significant opportunity? Just one-quarter of retailers say they have the capabilities to support a global strategy. Without the right resources, you could find your business overwhelmed by the potential trappings of international ecommerce. So, what are these challenges, and what qualities define a successful global retail strategy?
Meeting Unique Global Payment, Regulatory and Shipping Challenges
Accommodating foreign business isn’t as simple as some merchants might think. International buyers bring with them a number of logistical and behavioral requirements that could trip up any cross-border transaction.
To start, is your retail website equipped to accept the alternative payment methods that foreign buyers prefer? For example, while German consumers are very active in cross-border online shopping, with many embracing mobile shopping at fast rates, credit card penetration in the country is actually quite low. Most Germans prefer to pay with direct bank transfers or online services like PayPal®, so if you want your retail website to cater to these buyers, you’ll need to include those options.
Opening your doors to international ecommerce also means playing by international rules. You will most likely need to consider the taxes and laws that are local to your overseas buyers. For example, do you know if the countries you serve mandate specific packaging or shipping requirements for the goods you sell? Are you familiar with the domestic and international export and import laws? Have you made adjustments to account for any additional tariffs or taxes that might be required?
Shipping is another potential hurdle – how prepared is your business to send goods around the world? It could take more time and money to ship to international markets, but buyers abroad increasingly expect delivery speeds and costs that rival domestic options. Even if you outsource shipping, customers often hold retailers responsible for delivery mishaps or delays. Merchants that want to succeed globally must have the confidence that they can meet buyer’s delivery expectations efficiently and consistently.
The Keys to Successful International Ecommerce
Despite these challenges, globalization remains too promising an opportunity for online retailers to pass up. Worldwide ecommerce sales are soon expected to surge past the $2 trillion mark. Most retailers want a piece of that pie. When launched effectively and supported by the right services, logistics and management, a successful and repeatable global retail strategy is within reach.
So where do you start? First, you need to make big decisions around the company’s broader vision for international expansion – where do you need to be and how difficult will it be to support customers in that country? This assessment requires support and direction beyond just the product sales team. Every part of the company plays a role in setting objectives and addressing challenges.
Once the vision is set, retailers can begin to assess internal capabilities and determine where there may be skills or resource gaps. You’ll need to evaluate technology solutions, learn the unique qualities of each target market and settle on the strategies you feel will be most effective for your audience. These activities will better inform your expectations and provide opportunities for refinement.
All this work is done to assess your company’s global-readiness, helping you determine the best way forward into international markets. Though it may require careful preparation and lots of strategy, it can pay off in the form of effortless global transactions, satisfied regulators, happy customers and significantly more revenue.
To learn more about the buying preferences of global buyers, download the Pitney Bowes 2016 Global Online Shopping Study today.
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Global expansion represents an untapped market for many ecommerce retailers. Businesses must do their research and know their market.Learn More