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Your Business Without Boundaries

Cross-border e-commerce is a trillion dollar opportunity. Are you making the most of it?

Will Gensburg | UPS

Plunging into global e-commerce can feel overwhelming.

If you’ve ever wondered how you could easily manage the intricacies of duties and taxes, currency conversion, customs processes and the constantly changing regulations – in addition to your current responsibilities – take notice.

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Embracing cross-border e-commerce will open up your business to a trillion dollar opportunity.

On the surface, cross-border e-commerce can appear intimidating to even the savviest of retailers.

But embracing it will open up your business to a trillion dollar opportunity. Yes, trillion: According to eMarketer, global e-commerce sales in 2016 are expected to reach $2 trillion, up from $1.67 trillion in 2015.

Once you dive beneath the surface, you’ll find an amazing world filled with opportunity.

Two-thirds of the world’s online purchasing power is outside the United States. All you need to get the most of the journey is a trusted adviser and the proper tools.

Just like a good dive master who learns the local reefs to guide his customers around unsafe hazards, an experienced cross-border solution provider can turn challenging situations into bountiful opportunities.

Localizing e-commerce

The first step is making global shoppers feel at home.

Whether they are from Beijing or Berlin, it’s crucial to give every customer a localized online shopping experience that mirrors their domestic e-commerce preferences.

UPS i-parcel, can enable an end-to-end cross border e-commerce experience in more than 100 countries and 70 currencies. These tools can also help streamline processes and mitigate risks for retailers.

Monticello, Minnesota-based LemonDrop Stop, an online retailer of backdrops and floor drops for professional and amateur photographers, experienced first-hand the repercussions of trying to conduct the back-end processes of international e-commerce on its own.

Before outsourcing its international e-commerce services, the company spent most of its time focusing on administrative tasks like accounting, book keeping and taxes.

Due to a miscalculation, the company had to pay the Canadian government several years of under-collected sales taxes.

Now, working with UPS i-parcel, LemonDrop Stop is focusing on growing its international business.

The company now generates approximately 10 percent of its annual online sales by selling to cross border customers, an audience it expects to account for as much as 20 percent of its sales within the next two years.

[Also on Longitudes: The Smartphone is Changing Retailing for Good]

Going – and growing – international 

Providing a positive post-purchase experience can be much harder for international orders.

Today’s “want-it-now” shopper doesn’t think about – or care about – whether a retailer is based in the U.S. or is located across the world. They still want to know exactly when their order will be delivered, and they want it on time.

Shoppers also want affordable shipping options they can count on. According to the 2016 UPS Pulse of the Online Shopper study, 76 percent of global shoppers consider shipping fees and 62 percent consider delivery speeds important factors when searching for and selecting products online.

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Today’s ‘want-it-now’ shopper doesn’t care where a retailer is based. They care about when their order will be delivered.

Take Alpha Industries as an example.

The global leaders in military-inspired outerwear knew there were huge growth opportunities in international e-commerce, but they had trouble executing an effective cross-border expansion strategy.

After unexpected expenses, abandoned orders due to high shipping costs, lack of post-purchase visibility capabilities and widely varying times in transit, the company realized it needed a final-mile logistics solution that addressed international e-commerce pitfalls.

Partnering with UPS i-parcel helped solve these problems and enabled the company to focus on growing its international business.

A reverse logistics strategy

Just as with domestic shoppers, the international e-commerce experience doesn’t often end with the delivery of an order.

Returns are extremely important to consumers when they make international purchases.

According to the UPS study, international online shoppers want a clear returns policy and see the cost and ease of returning the item as a top consideration when making their purchases.

And just as with domestic e-commerce, online retailers who get this right can create a loyal base of customers.

According to the UPS study, 65 percent of online shoppers are satisfied with their ability to process a return or exchange online, and 63 percent are satisfied with the ease of shipping an item back to a retailer for a return or exchange.

That leaves a significant number of consumers who aren’t satisfied.

If your company is looking internationally, provide a transparent, flexible and easy returns’ experience.

A reverse logistics strategy can turn this challenge into a powerful competitive advantage that yields long-term sales through positive customer sentiment and loyalty.

[Also on Longitudes: Retail Steamrollers: Power Shoppers vs. Millennials]

Taking the plunge

Your first step is the biggest step. Once you commit to serving customers in other countries, you’re free to plan how to best target and serve them.

Alpha Industries initially struggled to calculate a fully landed cost at checkout.

The result was online shoppers were shocked when they were asked to provide additional payment upon delivery.

That led to unsatisfied customers returning up to 20 percent of their international orders.

“Customers would complain the final price wasn’t the quoted cost in the cart, and they were surprised by having to pay extra when they got the package,” said Alpha Industries e-commerce manager Stephanie Cohen.

“By finding the right vendor, Alpha’s rate of returns from global shoppers immediately dropped by more than half. We now take as many as 500 international orders per month, about double from a year ago, and we expect that growth to continue.”

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Logistics is more than the movement of goods; it can provide a competitive advantage.

Partnering with a third-party provider that specializes in international e-commerce enables retailers to focus on what they do best while mitigating the risks associated with doing business across borders.

The right partner can provide a seamless, localized e-commerce experience with a variety of shipping and delivery options, flexible returns policies and final mile visibility.

According to the U.S. International Trade Administration, less than 1 percent of America’s 30 million companies export – this percentage is significantly lower than all other developed countries.

And of U.S. companies that do export, 58 percent export to only one country. Yet 95 percent of the world’s consumers and two-thirds of money spent on e-commerce worldwide live outside of the United States.

In today’s fast-paced global economy, logistics is more than the movement of goods from one place to another; it can provide a competitive advantage. This is especially true with global e-commerce.

Take the time to research and select a qualified third-party vendor that is skilled at servicing international online shoppers. Doing so will help you free up time to focus on what you do best.goldbrown2

This article originally appeared on Innovative Retail Technologies and was republished with permission

 

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Will Gensburg is the Vice President and Managing Director of UPS i-parcel.

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Reprinted with permission of Longitudes, the UPS blog devoted to the trends shaping the global economy.

2 Comments

  1. Pingback: Building a Digital City | Longitudes

  2. Byrn Media

    Great article for any thinking about heading into the eCommerce business. If you are thinking about it, you really do need to consider shipping because it will become one of the main expenses of your business. Also, I love the boys in brown!

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