The last ten years have signalled a seismic shift in shopping habits. Paying bills, grocery shopping, buying Christmas presents, choosing a new outfit: we can now conduct all these transactions 24/7 from anywhere we choose.
Online shopping has become a way of life for many shoppers. Nearly one-third of the world’s consumers now say they make domestic online purchases on a daily or weekly basis. Today’s shopper has been empowered by the possibilities online shopping offers. Far from being limited to one single territory, this is closing the gap between continents.
Unsurprisingly, customers buy from retailers in other countries less frequently than from those in their home country, but as national online shopping becomes more widespread, more familiarity and comfort is reaching across borders.
Today the majority of consumers (58 per cent) shop cross-border monthly or annually, and this trend is particularly strong in Australia (78 per cent), Singapore (77 per cent) Canada (72 per cent), Mexico (71 per cent) and Hong Kong (70 per cent).
Curiously, an increase in global travel has also had an impact on online shopping. With the desire to visit new countries and experience different cultures comes the opportunity for in-store purchases overseas and the chance to connect with foreign brands.
Later, when holidaymakers return home, they follow their travels with that same retailer they discovered abroad and continue purchasing from them online. We recently explored this phenomenon in Pitney Bowes’ 2016 Online Shopping Survey, and coined this form of shopping as “In-store Global. Online Local”. The survey found that 63 per cent of consumers that have shopped cross-border are now participating in this practice.
Consumers across the world have moved beyond the days of marketplace or retailer; in-store or online; or even in-country or cross-border. The world is shopping everywhere as new consumer behaviours and trends have emerged. Nonetheless, one size does not fit all when it comes to reaching them. Consumers continue to demonstrate unique habits and shopping preferences by country.
There is still room for improvement for retailers and marketplaces to gain more presence abroad. But, what can they do to capitalise on cross-border opportunities? Simply put, they need to get the basics right!
1. Let consumers pay how they prefer to
When it comes to payment preferences, choice is key. Pitney Bowes’ Global Online Shopping Survey proved that no one payment option was distinctly chosen by most cross-border shoppers. Credit cards (45 per cent) were the most preferred method of online payment.
E-wallets, which allow consumers to store multiple payment accounts in one place (i.e. PayPal, Alipay) were identified as another popular payment method (34 per cent) for cross-border purchases. Limiting options for payment alienates a significant number of would-be consumers. Shoppers consider a variety of factors when selecting a payment option, including: service fees/total cost of purchase (33 per cent), the value of the purchase (25 per cent), and offer of a purchase protection plan (25 per cent). Not taking this into account will damage retailers’ reach and prevent them from having the best customer experience they can offer.
2. Take the hassle out of online shipping and returns
Despite merchants’ efforts to improve their shipping and returns processes, they remain major pain points for consumers. When respondents were asked about holiday shopping, 42 per cent of consumers say they experienced delivery headaches when shopping online for the 2015 holiday season. In fact, even the most basic elements of the customer experience such as shipping the right item, accuracy in address and tracking, a transparent returns policy and proper duty and tax were all cited as challenges.
Hong Kong (65 per cent), India (59 per cent), South Korea (55 per cent), Singapore and China (both 54 per cent) were among the countries experiencing the greatest disruption with online shopping during the 2015 holiday season. Even in the U.S., almost a third of consumers (31 per cent) reported challenges during this period.
3. Be where customers are
It is unwise to assume that everyone around the world goes through the same process when looking for a product. While marketplaces (62 per cent), search engines (43 per cent) and retailers’ sites (39 per cent) continue to be popular discovery tools, countries including Hong Kong (26 per cent), Australia (24 per cent) and Singapore (22 per cent) also rely on email communications to find new products. And now nearly one-fifth (19 per cent) of consumers are discovering new products through social media channels, especially in Hong Kong (45 per cent), Mexico (32 per cent), India and Singapore (both 30 per cent).
If a retailer or marketplace is to thrive in a new market, it needs to make its products easy to find. Doing one’s homework and understanding where consumers like to shop is a must. For example, if a company is considering expanding to Hong Kong, it is important to know that shoppers there are just as likely to use social channels to discover new products as they are a retailer’s website.
If the same retailer were to look at Mexico as an expansion prospect, they should bear in mind that consumers there are even more likely to use social media to get their first glimpse of a new item than to visit a retailer’s website.
4. Support customers’ need for mobility
Mobile devices play an ever increasing role in all our lives. Even though it may not be the first choice for completing a purchase (33 per cent of shoppers complete a purchase using a mobile), they often use their mobile device for part of the shopping journey.
For example, roughly half of shoppers in Singapore (51 per cent), India (50 per cent), Mexico (49 per cent) and China (47 per cent) are most likely to use a mobile device (including tablets and phones) for browsing. When it comes to order tracking, over half of shoppers in China, Hong Kong, India, Singapore and South Korea use these devices.
In the U.S. more than a quarter of shoppers (33 per cent) use mobile for completing a purchase, however, mobile usage increases significantly (47 per cent) when tracking an item post purchase. A strong tracking application is a highly recommended strategy to reach the mobile shopper.
5. Communicating across channels
Having an omnichannel strategy has become vital to respond to people using different devices for different parts of the journey. Consumers must start the journey in their mobile when commuting to work but then forget they have a basket full of items when they arrive to their busy offices. Retailers who make their platforms communicate, track users across mobile, desktop and tables and make baskets present across all devices will have a clear advantage.
6. Speak the customers’ language
It might seem obvious, but if a brand is trying to leave its mark in the Japanese market, it cannot expect potential shoppers to be proficient in English. Retailers’ websites need to be fully optimised to support the languages of the countries they target.
7. Accept the local currency
Just as the local language should be available to shoppers overseas, the same principal applies to currency. Not accepting the local currency means that shoppers will probably incur conversion fees, which ultimately will make merchants’ products more expensive and less competitive with local brands. To be fully cross-border this needs to be taken into account.
8. Understand local customs, taxes and duties
There is nothing more frustrating for a shopper than knowing that their long-awaited product has arrived safely to the country but is being held away from him or her due to incomplete paperwork.
Merchants and marketplaces need to make a point of knowing beforehand what requirements they need to comply with, including understanding of prohibited and restricted items for each market. Local controls time and costs should be considered when estimating the arrival date of the product and stating products’ prices for the region to eliminate ‘costs on the doorstep’ additions along with any additional hurdles that the customer may have to traverse before receiving their order.
Failure to do so will only award retailers an unhappy customer who may never shop from them again, and will share this experience with others.
Some retailers use cloud-based software platforms, such as Commerce Cloud, to integrate different shipping applications across a single platform. This means they can offer an improved customer experience with transparency and accuracy at its heart.
When considering opening up to a new territory, understanding the unique preferences, adapting to the culture, as well as improving simplicity in processes, will make a big difference in customer experience.
Entering the holiday season and a new year, retailers and marketplaces alike should take note and capitalise on these shifts in consumer behaviour. Embracing Global Commerce will open up new opportunities for brands and retailers at home and abroad.
Georges Berzgal, Vice President, Europe, Pitney Bowes Global Ecommerce
Image source: Shutterstock/Maxx-Studio