Cross-border eCommerce is a the natural evolution of digital international business. eCommerce as an industry is a child of globalization and any discussion, technology and best practice usually have a global dimension. The effects of the COVID pandemic has shed light on some much valuable insights into how the very nature of cross-border eCommerce has changed. eMarketer predicted global retail will fall by close to 10% losing more that $2 trillion in the process. Physical retail stores sales have fallen significantly in Europe, Asia and North America. This has coincided with a rise in cross-border online purchases which have increased 21% compared to last year. Moreover, Global Web Index found in a study of 20 countries an almost 50% planned increase in online spending. Global eCommerce retail this year will increase by 60%.
Cross Border
Hamburg based Statista found more than a quarter of American consumers intend to shop online domestically as well as internationally. Germany is similar with only 27% of customers while its neighbor Austria is at a whopping 71% – the highest of the countries surveyed. In Canada this number is significant at 51% which is surprisingly higher than the UK at just 39%. This might have a lot to do with the interconnected nature of the US and Canadian economy. Many Canadians shop on US eCommerce sites which might explain some of the 51%. The speed of cross border logistics has grown rapidly as technology developed which in turn has shaped global habits.
Having a Plan
As businesses keep globalizing it becomes increasingly important to develop a Cross Border Trade plan. This keeps a significant revenue stream that allows firms to compete better in terms of revenue. Certainly compared with many home based competitors. However, cross border eCommerce has to tackle transport challenges and cost issues with shipping and logistics. They must also be aware of different customer demographics, and international customer expectations. Needless to say, a different approach is needed for different territories.
More businesses are looking to engage in cross border eCommerce as customers are getting more comfortable with it. Firstly, businesses need to understand the importance of localization. Products and service offering must be adjusted to reflect local market conditions. This effectively increases international conversion rate, customer pool and return on investment. This often includes localization or tailoring promotions or discount offering. This adjustment improves the effectiveness of online promotions. Communication is also key as international customers need to stay informed about a business in relation to their local territory. Finally businesses must utilize multiple carriers including shipping approach to cross border logistics. This goes a long way to improving customer service whilst mitigating against delays and disruptions.