Interviews, insight & analysis on Ecommerce

Breaking down the barriers to cross-border ecommerce growth

By Orla Power, Director of Marketing, Luzern eCommerce

No one could have failed to notice the huge rise in online transactions driven by the pandemic. And while for many months consumers had little choice but to shop over the Internet, now that brick and mortar is open again, the number of people shopping online continues to rise. It was predicted that last year more than 2.14 billion people would buy goods and services online, up from 1.66 billion in 2016.

The predominance of ecommerce has also led to a rise in cross-border shopping, with revenues rising an estimated 21% from 2019 to 2020, and 55% of online shoppers purchasing from a different territory in 2020 alone. So brands now have ever-increasing competition and price pressure in their native territories. This has triggered a sharp increase in the number of brands looking at internationalisation strategies as a means of achieving growth. 

It’s not easy though. Expanding into new geographic markets has its challenges, including understanding cultural nuances, localised regulations, taxes, anti-fraud measures, currency considerations, privacy and data compliance, customs rules and shipping.

Wherever customers purchase from, they need a slick, seamless checkout process – and brands need to ensure that is fulfilled irrespective of the geographical location of the purchase.

Choose your Merchant of Record carefully

Having a Merchant of Record (MoR) is essential for cross-border sales activity. The MoR is the responsible entity that is held liable by national financial institutions for the processing of consumers’ online transactions. MoR activities include managing refunds and chargebacks, collecting country-specific taxes and ensuring they are paid to the relevant authorities, and ensuring compliance with national and regional financial regulations and laws. If consumers are offered a choice of currencies at the point of payment, the MoR will handle any conversion fees and associated card provider charges.

Selecting the right MoR is essential to ensuring the best customer experience at the point of sale, and, equally importantly, for any following transactions that need to be undertaken, such as refunds. Customers must ‘feel at home’ irrespective of where in the world their purchase is actually taking place.  

As well as ensuring the best quality customer satisfaction, the MoR should be evaluated based on how much its services cost, its experience across multiple markets and how that aligns to the brand’s future expansion plans. The cost of managing transactions, and any national taxes, at some point will be passed on to the consumer, and this needs to be managed dynamically as rates can change rapidly if economies become unstable. Clear itemisation of costs on consumer receipts is essential to maintain trust with the brand – bill shock is a quick way to lose customers.

Imagine a customer having to wait a long time at a physical check-out, having their card rejected a couple of times before being accepted, then being given a receipt with a total that exceeds the cost of the goods. That customer will not return willingly to that shop, and online retail is no different in having to make efforts to ensure their customers have no unexpected charges and that the checkout experience is as elegant and fast as possible.

Brands are adopting a multi-marketplace approach

A key ingredient for success in conducting cross-border eCommerce is to create a tailored marketing strategy for each country or region. The target market must be carefully considered, and content needs to be optimised and enhanced to ensure it is relevant to its audience. 

It is also important to note that although the mighty Amazon spans many countries, brands need to look at having visibility on multiple marketplaces to maximise international exposure. This gives brands a broader range of opportunities to reach and convert customers, promote specific products or ranges, and create new offerings that differentiate themselves from their competitors. This is the age of ‘Total Commerce’, where brands need to be available to consumers on whichever channel they prefer to shop: be that on Amazon, a branded webstore, or on one of the many other online marketplaces emerging across the globe.

All these activities will only be successful if there are stringent security and anti-fraud measures in place. These need to be continuous, multi-layered approaches that are regularly reviewed, incorporating automated and manual checks but with minimal inconvenience to the customer. With cross-border ecommerce, there are many variables which must be analysed, including time zone, country/region, proxy use, cookies enabled, language, remote control of device, wireless application protocols and associations to other devices with histories of fraudulent activity. With this information, a distinct device identifier can be established and maintained, and device anomalies associated with fraud patterns. Very specific rules can then be put in place to optimise fraud detection both nationally and internationally.

Cross-border ecommerce is becoming increasingly complex to implement and manage, and it is vital that brands either have or outsource the expertise needed to ensure success, which goes far beyond ensuring a seamless checkout experience. The effective optimisation, testing, securing, monitoring, measuring and analysing of customer interactions will bring added value, as the resulting intelligence gained on consumer behaviour will enable brands to become stronger and more relevant to their target markets.

Orla Power leads global marketing for Luzern eCommerce, a leading European managed eCommerce platform provider. With 20 years of experience, Orla is a seasoned business and marketing leader with a focus on creating strategies to help eCommerce Brands grow profitably and sustainably online. Orla is well versed in the disciplines of eCommerce Brand Management, CX and go to market strategies using real world insights.

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