In April, UK consumer spending online dipped for the first time since 2013 as British households tightened their belts in the face of rising prices and a fairly lacklustre wage growth. This followed a surprising sales slump during the retail industry’s crucial Christmas month, with UK sales volumes dropping by 1.9 per cent in December 2016. Consumer confidence in the UK may well be suffering, yet that may not be the same for international customers. Now is an opportune time for retailers to focus on growing sales in international markets – but what is the best way to seize the opportunity?
Take advantage of the weak pound
Assuming the value of sterling remains low, and could drop even further still, this will undoubtedly drive more shoppers online. Add to that the high profile of the UK retail landscape as a draw to overseas shoppers and you have ideal circumstances for growth in cross-border ecommerce. The UK’s reputation for producing high-end, quality products has not changed, however a weaker pound means that many of those products are now more affordable for shoppers elsewhere to buy. Cross-border ecommerce remains a huge sales opportunity for UK retail businesses, even more so post-Brexit, however there’s more to cross-border than shipping parcels overseas.
Localisation is imperative
The key rule of international trade is that, in order to be successful, customers must enjoy a great shopping experience regardless of their location. Fundamentally it is localisation that will uplift your conversions and encourage an increase in sales. To engage with international customers, retailers need to make sure their regional offerings are simple, localised and transparent.
Retailers looking to harness global growth opportunities need to emulate domestic retailers, and improving the customer experience on a local level is the key for British retailers targeting customers overseas. In order for British retailers to take full advantage of the international online market they need to offer their customers local payment methods, a wider choice of delivery options and local returns, prices displayed in local currencies and more transparent pricing, with full delivery costs and tax presented. To enable simple, localised and risk-free cross-border commerce, the following four considerations are essential:
- Never treat cross-border customers as second class. The biggest barrier that retailers face today is delivering a consistently excellent shopping experience worldwide. Giving your customers an excellent experience at all times, no matter where in the world they are is the key to driving sales growth globally and encouraging repeat business.
- Offer multiple shipping options at reasonable rates. Linked to this, have a simple and transparent returns process to give every customer the confidence to buy online with you. Attractive shipping rates and simple local returns option are two of the strongest drivers of cross-border conversion.
- Display prices in the local currency, rounded form and marketing-friendly manner; there are few things more off-putting than exchange rate uncertainty when buying from a retailer in another country. More than that, in order to be competitive in overseas markets, you should follow the local rules of pricing.
- Try to put the customer’s mind at ease. Avoid any potential nasty surprises for customers, such as customs charges or handling fees, by being upfront about these costs. Offer your international shoppers the ability to pay duties and taxes at checkout.
Delivering a localised shopping experience does not have to require huge investment into a dedicated website, or lengthy negotiations with the local supply chain. Instead, a specialist global partner can provide the local market expertise that is essential to enable retailers to offer consumers the level of service that is necessary in the competitive retail market.
Plan for international shopping peaks
With the right preparation, technology and processes in place, as well as a localised shopping experience for the end customer, British retailers should look into sales opportunities in markets overseas all year round and especially during local shopping peaks. Christmas is undoubtedly the most significant event in the British retail calendar, however there are so many seasonal opportunities to be had all year round, across the world. Single’s Day, hatsu-uri and Les Soldes are just a few examples of the seasonal peaks you need to familiarise yourself with if you’re in the retail business.
In fact, did you know that Valentine’s Day is celebrated in June in Brazil? In France, the dates when retailers can have a big sale are regulated by law, so Les Soldes – a key sales season in France – usually runs during two periods of the year: once in summer and once in winter. During New Years in Japan, many retailers conduct Hatsu-uri which is also known as there ‘first sale of the New Year.’ And let’s not forget the Singles Day phenomenon - – which generated a staggering $17.8 billion in revenue in just 24 hours last year and became the world’s biggest shopping event last year. Combined these events are as big as Christmas in terms of revenue generated, if not bigger.
But how can British retailers match impressive homeland sales and tap into opportunities in international markets? The answer is simple; plan ahead. It is clear that international shopping peaks offer a massive slice of revenue for retailers. In order for British retailers to take full advantage of these seasonal peaks, they must set up a calendar of cross-border retail events that are, or will be, significant to the business. Having the opportunity to take advantage of so many local shopping peaks throughout the year can only mean one thing: higher conversion rates and increased sales globally. Once significant retail events have been identified, promotions should be planned to coincide with these dates.
Now is a great time for retailers to focus their attention on international markets, and improving the online customer experience will be crucial for British retailers targeting international customers this year. However, retailers can no longer rely only on a strong online offering to guide their business, and they should guarantee cross-border sales throughout the year by better understanding the local markets and planning for international seasonal shopping peaks.
Working with a specialist partner that can provide UK retailers with the expertise, the local know how’s and the best practices in multiple international markets, will make planning for global trading peaks as easy as domestic ones. By tapping into these global events, British retailers can improve their international conversion rates, and rather than relying on the British calendar to drive profits, retailers will be able to enjoy sales peaks all year round. Ultimately, adopting a global approach to retailing will enable retailers to weather the storm here in the UK.
Nir Debbi, co-founder and CMO, Global-e
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