Let’s not kid ourselves: global events and market disruptions will continue to occur. We’ve already seen many natural or man-made phenomena happen in the past that have interrupted global business. Perhaps it has not been at the scale that it is today, but the pattern is there.
But hard times often lead to innovation, which has been the case during other pandemics in human history. And with all the shifts personal habits and consumer behaviors across the global community, we will continue to see new ideas develop and businesses will need to embrace them.
Social distancing has produced a significant increase in online shopping, particularly as so many stores were forced to close their doors. The convenience of e-commerce, even as stores open back up, in conjunction with the residual fear of the pandemic, will prompt many consumers to continue shopping online. For many, e-commerce may even emerge as the primary or only channel for shopping.
And there is the opportunity for innovation, particularly in the retail sector, which will need to fully embrace digital transformation and online technologies as well as consider new business models for adapting to future changes in an interconnected global economy.
One strategy that can no longer be ignored is selling goods cross-border to online shoppers. There are opportunities here that e-commerce businesses have not fully realized. Cross-border sits at the core of an adaptive business model that can reinvigorate sales, grow global revenue, and help a business to recover losses or mitigate risk.
In this post, we’ve outlined 3 ways cross-border can strengthen your brand, globally.
1. Generate demand to Grow Revenue
There are many reasons to engage in cross-border, but a few of these stand out especially during market interruptions. If a domestic market has reached a critical mass of competitors, business seeking new opportunities should turn to the global markets to tap into fresh demand. In markets where local availability of certain products is low, or the available options are low quality and costly, consumers will look further afield for the goods they want or need. For online businesses, having a presence in these markets is an opportunity to sell your goods to this new consumer base. Furthermore, international selling enables an e-commerce brand to grow revenue while decreasing its reliance on one domestic market where sales might be declining.
2. Recover Losses and Manage Risks
Cross-border e-commerce, in addition to being a growth strategy, can also help brands hedge their business against unpredictable events and crises. It can also act as a strategy for helping businesses recover. In addition to allowing brands to expand into new countries and reduce their dependence on one market, cross-border e-commerce also presents a business with the benefits of geographic diversification. By diversifying their geographic distribution, businesses have greater flexibility to operate so that when an unforeseeable event happens in one market, the business can both absorb the impact and adapt more easily to future situations. Going hand in hand with reducing the dependence on one market, global expansion and a diversified global presence also enable a business to recuperate losses by tapping into other markets that are less affected. If a domestic market takes a turn for the worse, as several markets have in this current crisis, then a brand can turn their eye to other markets to drive sales until the domestic market recovers. Savvy brands will closely monitor the situation in each market to make decisions around local product assortments, pricing, promotions, shipping options, and all aspects of the customer journey.
3. Optimize Conversion and Increase Reach
Social media and search have been key drivers to increasing global sales. As more consumers around the world come online, they do so using mobile devices, providing them with easy access to social media and search. These channels lend themselves to being global, and as a result, consumers are discovering new brands all the time all over the world.
And we’ve seen this in our own research. In a recent study we conducted using data from SimilarWeb, we found that hundreds of brands are seeing large portions of their onsite traffic coming from international sources.
We are all acutely aware of the shift to online shopping over these past few months. And more recently we’ve seen compelling increases in the amount of international traffic.
According to a recent analysis looking at March and April of 2019 vs 2020, international e-commerce traffic to a selection of 285 companies across e-commerce categories not only saw a 33% growth YoY, but also grew more quickly than domestic traffic. During the same period last year, international traffic accounted for 43% of total traffic to this group of retailers, while this year international traffic accounts for 48%.
*SimilarWeb E-Commerce Traffic Analysis of 285 online brands, May 2020
The global demand coming to retailer websites is there, so now it is up to the brand to capture it. We hear time and time again from brands and retailers that approach us that only a small piece of this international traffic is converting. And therein lies the opportunity. To increase conversion, an e-commerce site must localize the experience for customers across different countries, locales or regions. This involves displaying prices in the local currency, showing accurately calculated duties and taxes, offering multiple local payments methods, giving several options for direct international shipping and facilitating returns. Localizing every element of the customer journey ensures an easy and simple shopping experience that feels domestic.
But brands can’t do it alone, and the ones with lofty global ambitions choose to leverage a comprehensive and flexible solution, like Flow, that localizes each of those customer touch points. If your brand is seeing a surge in traffic from international sources but conversion remains low, get in touch today and we’ll show you how Flow can help.