Better Pricing is the Top Factor in Luring US E-Commerce Shoppers Overseas
Shoes directly from Japan? Pottery directly from a merchant in China? Sure, say a growing number of U.S. shoppers, who are quickly learning the ins and outs of buying overseas versus buying from a domestic online retailer.
According to the recently published UPS Pulse of the Online Shopper Survey, Nearly half of avid US online shoppers bought items from international retailers, demonstrating the need for retailers to offer more personalized services as a way to compete against lower prices, according to the sixth annual UPS Pulse of the Online Shopper study. Further, the survey noted, “almost all avid* U.S. online shoppers (97%), made purchases on marketplaces rather than direct store sites, up 12 points from 2016. Also, 81 percent of those surveyed cited price as the most important factor when searching for and selecting products online.”¹
The respondents were attracted to international retailers who:
- Clearly show the total cost of the order to the online shopper, including duties and fees
- Convert costs to the customer’s home currency
- Have a good business reputation
As the chart shows below, online buyers are looking at international merchants for a variety of reasons:
As shoppers get more comfortable with shopping internationally, domestic retailers should be taking careful steps to keep them coming back for additional purchases.
Where Personalized Service Fits In
Responsive customer service is one way to keep shoppers coming back. In reality, many in the retail industry say it is a must for business survival and growth.
“The lines that separate domestic and international retailers continue to disappear,” said Alan Gershenhorn, Chief Commercial Officer for UPS. “Retailers are now competing across the globe. In order to win, retailers can distinguish themselves by providing value through personalized experiences.”²
What does personalized service look like to these shoppers?Survey respondents cited the importance of a brick-and-mortar store in delivering personalized service:
- 59% see stores as an important means to touch and feel products
- 54% view stores as an avenue for immediate problem resolution
- Over half of the respondents participate in loyalty programs
- 50% have used ship-to-store this year, with 41% planning to use it more often going forward
Many leading online retailers are already working diligently to enhance their customer service programs and let their buyers know all about it. For an interesting read on customer shopping preferences and how technology is being used to improve service, read, “Ten Customer Service And Customer Experience Trends For 2017,” by Forbes magazine.
Wooing International Shoppers
The good news is that companies who are at risk of losing domestic shoppers can also bolster their sales by entering the international market themselves.
To attract overseas buyers, a company will need to either internationalize its existing website or launch additional online stores that have been localized to the specific markets they’re going after. As many online retailers have learned, this is no short and simple task. For additional tips on what it takes to truly attract buyers in other markets, read, “7 Ways to Make Your Website Global-Ready,” an excellent article by commerce platform provider Magento.
Controlling e-Fulfillment Costs
As critical as it is to attract international customers, it’s equally important to get control over fulfillment costs once they start buying.
Do your homework before you enter a new market on the characteristics and costs of shipping products to that area. Talk to your carriers before you begin – let them know what your plans are and find out if/how they can help.
It’s also critical, as your business grows, to have a flexible multi-carrier shipping system that enables you to quickly onboard new carriers as you enter new markets. The best solutions make it much easier to determine availability, costs and transit times up front so that customers can see true total costs while they’re shopping – a requirement to prevent shopping cart abandonment.
The best approach is to use carrier-agnostic software that gives your company the ability to compare carrier rates, services and charges, as well as robust delivery tracking and reporting. The system vendor you choose should be experienced in integrating its shipping software with your e-commerce platforms, ERP, WMS, order management and other back office systems.
The provider should also have a ready list of e-commerce companies that are its customers for domestic and international shipping. If this is the case, the company will have previous experience onboarding international carriers for other online retailers doing business overseas, and will be able to make the process smoother for you.
Plan to Go International
What is the projected growth for international online shopping? According to eMarketer, global cross-border e-commerce is projected to grow at an average of 22 percent from 2015 to 2020 compared to 15 percent for U.S. e-commerce during the same time period. (UPS Pulse Survey)
As self-educating as consumers have become, online retailers should expect their customers to grow more sophisticated in their preferences and willing to shop elsewhere to find what they want.
All online retailers should also expect an increasingly international mix of shoppers to visit their site and plan ahead to identify and accommodate their service expectations.
*An avid online shopper, defined by UPS, is someone who makes two or more purchases online in a typical three-month period.
¹ “Study Finds U.S. Online Shoppers Turning To International Retailers for Purchases,” Supply Chain 24/7, June 9, 2017.
³ “UPS Study: U.S. Online Shoppers Turning To International Retailers,” June 6, 2017.
© Copyright 2017, ADSI, Logistyx Technologies, Inc. All rights reserved.