Advertisement

Cross-Border Competition: Top Three Tips For E-Commerce Global Expansion

0aaSean McCartney Radial

Must Compete with Amazon. It’s a mantra for many retailers in today’s day and age. Shifting consumer expectations around e-Commerce have challenged retailers that are still struggling to turn around two-day deliveries or meet online-order customer care needs. Unfortunately, the next big hurdle retailers must overcome is already here…succeeding at cross-border e-Commerce.

Amazon made headlines earlier this year when they reported that more than a quarter of all revenue for sellers globally was from cross-border transactions, an increase of more than 50% from the year prior. Amazon’s current cross-border sales amount to between $50 billion and $75 billion USD. Cross-border e-Commerce is a major, ongoing area of focus for the industry giant, and other powerful players such as Walmart and Alibaba. A recent study from UPS reinforced this growing opportunity for retailers who dare to break borders. The study revealed that cross-border e-Commerce sales are set to grow 25% per year on average, twice as fast as domestic e-Commerce.

The adoption of cross-border e-Commerce among the competition is moving swiftly. The most recent Radial and eTail Canada study, “Navigating the Complexities of International Markets,” found that engaging with the global economy is a renewed focus area for Canadian retailers. Most retailers surveyed reported expansions that are set to occur in the next 12 months, and 73% of retailers are planning on investigating the means to build personalization strategies to increase international sales.

Advertisement

Competing in today’s retail landscape requires embracing international e-Commerce to tap new market opportunities. Retailers that can swiftly address supply chain challenges will have the opportunity to establish themselves truly as a global brand, with a cohesive customer experience across borders. Retailers should look to keep three lessons in mind as they establish a cross-border strategy:

1. Forecast viability of potential markets, prioritize cost control

Keeping costs low is one of the key elements of success for international expansion, especially when retailers are just starting to implement a cross-border strategy. Consider entering markets that have comparatively lower currency rates and lower costs of living. This enables retailers to price products more competitively and secure greater profit margins. Breaking into the international market in this manner can allow retailers to create a base of operations with favorable cost structures that can be expanded to other countries, increasing profit margins even further.

When prioritizing global markets, retailers should keep a close eye on competitive actions, and market trends as well. The 2018 Radial and eTail Canada study, “Navigating the Complexities of International Markets,” found that Canadian retailers are especially looking to expand in areas, like the Eurozone, that have established buying power. While only 56% of Canadian retailers currently service the Eurozone, retailers surveyed expect that number to jump to 95% in the next 12 months.

In other words, look before you leap! Retailers should be diligent in executing in-depth market research ahead of time, including a SWOT analysis, before committing to entering an unfamiliar territory.

2. Consider outsourcing fulfillment to break into new markets

Managing a seamless delivery and return experience must be a priority to ensure retailers maximize their customer experience and can properly compete with local businesses. That said, it’s clear that building an effective logistics framework across international borders is difficult to execute: 80% of the Canadian retailers surveyed by eTail Canada reported that fulfillment is a significant challenge for their brand.

In entering a new market, retailers must lay the groundwork for fulfillment first. The fastest way to execute this, especially when also considering reverse logistics needs, is to tap a fulfillment and delivery partner. Instead of building from scratch, retailers should seek out a partner that already has the right order management systems, transportation networks and inventory optimization tools in place. Partners that can provide multi-node, multi-tenant fulfillment make cross-border e-Commerce more cost-effective and efficient for retailers looking to ship orders to global destinations. This fulfillment partner can help in navigating complex international standards and fees. Leveraging the higher volumes of this third-party provider will help in optimizing costs and create agility, while enabling retailers to more easily scale operations.

3. Identify customer needs and address them

Building a personalized experience for customers across borders is a major hurdle for retailers. Localization of landing pages stands out as a challenge for 99% of the retailers surveyed by eTail Canada — reflecting the need for dynamic systems capable of displaying the correct content to a global customer. Retailers must prioritize the development of a data management infrastructure and content that fits the needs of a global consumer. Establishing the proper infrastructure around data collection can be the difference between a sale and a discouraged customer. Retailers must pre-empt localization challenges like maintaining the proper exchange rate online and displaying the products that are the most likely to appeal to a repeat customer in a certain country.

Appealing to international customers also requires understanding their preferences and pain points — and when it comes to e-Commerce, these vary by country. Radial recently surveyed 3,000 consumers in the U.S., the UK and Canada, and uncovered some key differences in expectations around retail fulfillment and deliveries. For example, customers in the UK and Canada noted they are more likely to order from a retailer if it ships goods in environmentally friendly packaging compared to their U.S. counterparts.

Understanding customer preferences by market not only helps retailers better address concerns ahead of time, it could even prompt retailers to make valuable decisions when it comes to inventory tracking and operations. According to that same study, the majority of UK customers, 54%, reported they choose to pick up some of their goods ordered online in-store, compared to just 37% in the U.S. Retailers should consider customizing their inventory models to better meet customer preferences in specific areas.

Investing in global expansion is the key to remaining competitive for retailers looking to rival today’s e-Commerce powerhouses. Success lies in the retailers’ ability to invest time and resources in fully understanding the challenges and opportunities associated with different locations and markets. Partnering with seasoned service partners can help enable rapid market entry, optimize costs, offer flexibility and mitigate risks. For those companies brave enough to break the border, the ROI speaks for itself, with significant upside for rapid growth.


 

As Executive Vice President of Operations Services, Sean McCartney oversees integrated commerce operations for Radial Inc., a bpost group company, which includes managing the company’s fulfillment centers, transportation services and customer care centers. He is responsible for designing the network strategy, optimizing via operational excellence, expanding and differentiating Radial’s transportation offerings, and growing the company’s customer care solutions. He has over 20 years of experience in global supply chain logistics, distribution and operations.

Feature Your Byline

Submit an Executive ViewPoints.

Advertisement

Access The Media Kit

Interests:

Access Our Editorial Calendar




If you are downloading this on behalf of a client, please provide the company name and website information below: