Global ecommerce continues to grow and undergo transformation as the pandemic brings a massive shift in consumer habits and a sustained surge in online shopping. It is estimated that worldwide retail ecommerce sales grew 27.6%, for a total of more than GBP 3 trillion, in 2020. As globalisation continues to rise, cross-border ecommerce has become a core growth driver for ecommerce brands in all industries. Merchants who operate internationally must be able to localise and personalise their customers’ buying experiences, including offering preferred payment methods in each region, to ensure they take full advantage of opportunities outside their home market.
Some industry experts predict the surge in ecommerce will continue beyond the pandemic, whilst others say businesses should be recalibrating for diminished growth. No matter which scenario plays out, a solid cross-border commerce strategy is key to maintaining sales growth past the pandemic.
The importance of direct-to-consumer for a cross-border strategy
As the pandemic brought much of the economy to a halt in early 2020, cross-border ecommerce proved to be a resilient bright spot in the face of disruptions, especially compared to the growing uncertainty in other industries. Changes in the way customers are shopping demonstrated that business-to-consumer (B2C) brands need to have a mature multichannel strategy to support that cross-border strategy. This approach should emphasise a direct-to-consumer (D2C) channel to avoid an overreliance on brick-and-mortar or third-party retailers.
One study during the height of the pandemic found over 54% of consumers were using D2C channels to purchase consumable products or nonperishable items. Another report found up to 80% of consumers that changed shopping behaviours during the pandemic planned to continue that shopping behaviour post-pandemic. With global ecommerce sales growing, B2C brands can’t afford not to have a strong D2C cross-border strategy.
Build a successful strategy with a localised approach
When expanding your ecommerce brand internationally, you need to prepare for the complexity and challenges of cross-border payments. Localisation is key when it comes to delivering a successful cross-border ecommerce strategy. A localised approach to processing can increase the number of successful transactions, but there are several crucial elements that need to be taken into consideration.
First and foremost, speak to the shopper in their own language, and be aware of cultural distinctions and preferences. This will require you to update your product imagery and the copy on your website to engage local audiences. This gets to the heart of customer expectations by making sure the website looks familiar to them.
Next, offer local currencies. Shoppers expect to pay for purchases in their local currency. It is becoming increasingly common for websites to include both the local currency as well as additional major world currencies (such as the US dollar, Euro, or British pound). Consumers are more comfortable and likely to make a purchase when they see a product in a currency they are familiar with, regardless of where that product originates.
Shoppers also expect to make purchases with their preferred payment method. The methods they use to complete transactions can vary greatly from region to region and the payments space continues to expand with Buy Now, Pay Later offerings growing in popularity. Don’t limit yourself to a strategy that only includes one option like a credit card. Consumers expect payments options that use local payment networks, their own banks, and new mobile methods.
Cross-border complexities
Brands selling cross-border will also need to keep up with local tax laws, compliance, and import and export regulations. It is crucial for brands to have a deep knowledge of local regulations to account for even the slightest variances. Failure to understand the nuances in local regulations could result in serious financial penalties and damage to brand reputation.
Another key consideration when setting up your cross-border strategy is data protection. Be aware that many countries have adopted their own data protection regulations, and these regulations are constantly evolving. Compliance dates can also change, as was the case with PSD2 in the EU.
These complexities are difficult for brands to manage on their own. Plus, they present added risks to brands that fail to comply with ever-changing rules and regulations. To simplify, consider partnering with global ecommerce experts who can take on the risks associated with cross-border selling and allow your brand to focus on what you do best.
Transparency is key
Finally, be transparent. Let the customer know what their total cost for the purchase will be so there are no surprises or hidden fees. Displaying all applicable taxes, duties and shipping costs at checkout will help you gain your customers’ trust and loyalty to return for future purchases.
While 2020 brought seismic shifts in shoppers’ buying habits, brands looking to set their strategy for future success can’t ignore the growth opportunities that come with cross-border ecommerce. Accelerate your expansion into new markets and exceed the expectations of new customers by deploying a well-executed cross-border strategy that includes localised payments and taxes and transparency throughout the buying experience.
Ready to future-proof your business growth with a global strategy? Download our checklist to learn how to simplify cross-border commerce operations and achieve success in new locales around the world.
About Ted Rogers
Ted Rogers started at Digital River in 2017 and brings a unique perspective to the business, with past roles spanning from marketing to credit and fraud to operations. He served first as vice president and general manager of MyCommerce, then vice president of global expansion and fulfillment operations, and vice president of strategic marketing before being named chief marketing officer. His focus lies in communicating Digital River’s value and driving growth for customers and partners by taking a global, scalable and quantitative approach to marketing. Ted has an extensive background in ecommerce and marketing management, serving as a marketing executive in the industry for over 20 years. Prior to joining Digital River, he held a variety of leadership roles at FICO and Bluestem Brands, Inc – Fingerhut and PayCheck Direct.
About Digital River
With more than 25 years’ experience, Digital River has mastered global commerce. An industry disrupter from the start, our Global Seller Services simplify global commerce expansion to help companies of all sizes grow their revenue by offering shoppers a localised buying experience in over 200 destinations worldwide. Using our flexible APIs that combine payments, tax, fraud, and compliance into a single integrated solution, brands increase conversions, turning browsers into buyers as they sell anything to anyone, anywhere in the world. The chosen partner of more than 3,500 global brands across the Americas, Europe and Asia, Digital River is global commerce simplified.
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