E-Commerce has the ability to bring the world's products to your doorstep, and more than three quarters (77%) of U.S. consumers have either bought across borders or are ready to do so. A new consumer survey reports that 42% already have purchased products from non-U.S. digital retailers, and another 35% are open to the idea. As many as 39% of shoppers who already have shopped globally had completed purchases during the week prior to participating in the survey.
The survey, conducted by IPSOS for Bronto Software, reveals major opportunities for global e-Commerce retailers in the U.S. market. Titled, Where We Buy: Consumer Attitudes On Global Commerce, the report confirms that domestic merchants are now competing in a truly global marketplace.
• Younger consumers are the most likely to buy overseas: 57% aged 16 to 24 and 58% aged 25 to 34. The 65 and older group is the least likely to do so, at 25%.
• By a small margin, men are more likely to have made cross-border purchases than women: 44% compared to 40%;
• The greatest percentage of cross-border purchases originate in China (56%), followed by the UK (27%), Canada (20%) and Japan (19%).
• By a wide margin, shipping costs are the biggest barrier to cross-border purchases, cited by 67% of respondents.
"These results indicate that competition is getting steeper everywhere, and marketers, regardless of where they're coming from or selling to, need to differentiate themselves," said Carolyn Sparano, General Manager, Bronto Software, in an interview with Retail TouchPoints. "They can do this with unique merchandise that provides value, but they also can work on providing value after the sale. There are a lot of things marketers can do to continue the conversation with customers so that they will want to come back for more in the future."
Focus On Retailing 101: Fulfillment And Security
Retailers selling internationally should pay close attention to two basic capabilities: order fulfillment and secure checkout. Among the top barriers consumers cited about buying from non-U.S. countries, shipping costs were number one, but fear that delivery would take too long (43%) was also a significant concern. Close behind was a distrust of online payment methods, at 41%.
"Retailers need to work on providing very competitive shipping rates, because 'free shipping' offers are very common," noted Sparano. "And when it comes to checkout, consumers need to feel secure about conducting transactions on their sites."
This ability to master retailing basics might explain the popularity of China's e-Commerce merchants among U.S. consumers. Another factor is the immense power of Alibaba, the China-based e-Commerce marketplace. While the survey didn't delve into the reasons why consumers bought from one country versus another, Sparano noted that "China has been shipping products around the world for a long time, so they have lowered some of the barriers to the global marketplace. And when you look at the concerns consumers express about purchasing from other countries — namely shipping and secure payments — Alibaba works hard to eliminate those barriers as well."
High Recency Rates For Cross-Border Buying
U.S. consumers who are buying from international e-Commerce merchants are doing so with some regularity. As noted above, nearly four in 10 survey respondents had bought an item during the previous week, and another 20% purchased during the previous month, with 15% buying during the previous quarter. The survey estimates that the current U.S. market for cross-border purchasing totals nearly 39 million U.S. adults each week.
Even given the size of the current global marketplace, international merchants have a significant opportunity for growth in the U.S. market. There's a wide gap between the countries U.S. consumers would consider purchasing from compared to those that they actually do buy from. For example, 46% would consider buying from Germany, but only 10% of consumers have done so. There are similar gaps for France and Italy (both 46% vs. 6%), Sweden (39% vs. 2%) and even Canada (72% vs. 20%).
The survey of 1,000 adults aged 18 and older was conducted online. Respondents had to own at least one Internet-capable device, such as a smartphone, wearable, tablet, desktop or laptop.