Interviews, insight & analysis on Ecommerce

From pandemic to pan-global: how UK retailers can capitalise on the booming cross-border opportunity

by Michael Wood, Head of Consultancy at Astound Commerce

The cross-border commerce opportunity is huge and growing fast for UK retailers and brands who are optimised to capitalise on growing global demand. In the light of the UK having a slower recovery than most countries post-pandemic, exacerbated by Brexit disrupting – and in some cases breaking – supply chains, adding to the cost of goods freight and the burden of complex EU custom regulations – it is worth UK retailers and brands expanding their horizons and looking at the opportunities to do more business cross-border.

Forrester’s research suggests that cross-border purchases will make up 20% of all worldwide ecommerce in 2022, with sales rising to $627billion, and almost half (45%) of global online shoppers will buy across borders by then.

Some of the fastest growing markets for cross border purchases are in Asia and Latin America, where there is a desire for British brands, particularly for brands that saw their costs soar during the pandemic and who now face their profits being hit by post-pandemic supply chain disruption. Critical to cross-border success is providing a localised experience, from payment gateways to distribution, enabling local consumers to get what they want in their own language.

Local language is key to conversion. Research from Global-e, an end-to-end cross border ecommerce solutions provider, shows that 76% of customers change the language at the checkout. In other words, they are generally relaxed about what language products and descriptions are in on the website, but when it comes to paying, they are taking no chances.

And this is the primary reason why we recommend retailers work with cross border specialists; the sheer size of the task to localise websites for so many countries can be overwhelming. And it is not simply a question of getting words translated, they must be absolutely right as Global-e’s data attests, citing examples of companies attempting to do it themselves and where a single word can upset the checkout experience and cause the shopper to abandon their cart, just at the moment they were about to convert. Add SEO and search and getting things right in every language gets even more complex and difficult to manage internally, without throwing a lot of resource and investment at the problem.

Different strokes

Another complexity is the sheer range of tax, duty and other regulatory requirements in each country and a lack of commonality even within Europe. It is the job of the cross-border expert to use their local expertise to enable brands to deliver a site that is as professional and compliant as any local business, so shoppers have the confidence in their buying journey to ensure they convert.

And these web front-ends have to work for mobile commerce given that an estimated third of cross border purchases are made through mobile devices. At the very point of decision, any friction in the final moments of the transaction can lead to a lost conversion, which is why so much work has been done by cross-border tech companies and their clients to perfect the checkout experience.

Cross-border gets even more complex when it comes to distribution, delivery and fulfilment. Where many brands are used to managing their logistics in a single territory, generally within business hours in a single time zone, with cross-border they are moving to a 24/7 operation that demands complex stock management and multiple fulfilment types. Working with a company that takes that burden away, getting closer to a wholesale or direct-to -consumer (D2C) model but one where the brand has much greater control, characterises much of the innovation and advancement in cross-border commerce.

However, it is not an exercise in outsourcing but one of partnership, particularly where both parties can see the transaction data, making it easier to determine what changes need to be made and then to see the results of those changes.

Data visibility is relevant to so many other areas as well. Payment types for instance; given that cash is king when it comes to online payments in the Middle East, retailers looking to expand there must ensure they can offer a cash on delivery facility, and enable couriers to handle those payments. Or it may mean offering buy-now-pay-later, just one more facility that speeds customers through the checkout.

And returns, which can make up to 50% or more of all sales for some brands. Again, where both parties can see what is happening, it is easier to be more agile to make necessary changes.

Ultimately, by removing many of the mechanical, logistical elements and entrusting them to a third party, brands are free to focus on delivering the best possible experience to their customers, to improve sales and drive long-term performance.


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