Understanding the nuances of international consumers’ shipping demands can make or break market entry for cross border e-commerce merchants. To build brand loyalty and increase conversions, brands and retailers must recognize that in many of the top ten global markets, e-commerce shoppers have extremely high expectations for fast and affordable shipping.
How important is fast, affordable shipping? According to our own research of global consumers, cost and wait times for international delivery are consistently top drivers for why they avoid making cross-border purchases. In China, the top global e-commerce market, one of the biggest barriers (second only to currency exchange complexities) cited by consumers is that delivery time from foreign merchants is “too slow.” In both Japan and Germany, delivery speed and the high cost of shipping are the two biggest factors for consumers who make the choice to stick with domestic e-commerce retailers.
What does this mean for cross border e-commerce merchants? For starters, flexible, simple, low-cost shipping options are the price of admission into each global market.
However, it can be a challenge to design and successfully execute an international shipping strategy. There are multiple facets to the process, including managing last-mile carriers across various countries, country-specific taxes and duties, and product restrictions to consider in each market. In some cases, shipping carriers add on fees and surcharges to deliveries, resulting in additional shipping charges. Passing these charges on to global consumers isn’t always the best solution and can impact conversion rates.
A well-planned shipping strategy encompasses the following aspects:
1. Localized options for each global market.
When it comes to shipping and logistics, it’s important to understand how the expectations of international customers differ from those of domestic customers. Each market is different. Once you’ve identified the markets you want to sell to, the next step is to closely evaluate local consumer preferences. What are their expectations at checkout? What shipping and handling options are they used to? What shipping tiers do local retailers and competitors offer? Knowing these answers can help you be competitive and offer the right customer experience in the target market.
2. Multi-tiered shipping options.
International shoppers may not want to wait for their packages, but they do like having options for how orders are sent. Presenting more than one shipping option provides a range of speed and pricing that increases the likelihood of matching the consumer’s comfort level. Think about which options will give the best choices to your customers for arrival date and means of delivery. For example, do they prefer One-Day shipping or Two-Day? What about a preference for Ground or Air? Which carriers are the most popular in each market? One way to figure out the right recipe is to A/B test different shipping options for different markets on your site to learn how shoppers respond to different tiers.
3. Consider shipping costs as part of your pricing strategy.
It’s crucial not just to consider shipping costs, but analyzing all the way through to landed costs. Landed cost is the total price of a product after it’s delivered to the customer and includes customs, duties and taxes, packaging, insurance, currency conversion, transportation, crating, handling and the original price of the product. Keep in mind that in some global markets, you may encounter additional costs for remote geographic regions, fuel charges and disbursement fees. When setting product pricing for your international customers, consider how to protect margins if your brand decides to offer a free shipping option to customers in certain markets.
Understanding and responding to cross border e-commerce shoppers’ shipping needs is crucial to brands and retailers as they expand into new markets. To remove friction and increase brand loyalty, e-commerce merchants must recognize that their consumers have high expectations for fulfillment and logistics. To help navigate all of the complexities, many brands turn to technology partners for help. The right partner will help manage the relationships with international carriers, enable A/B testing on your e-commerce sites, and connect all the dots along the way.
To learn more about the Flow console to streamline international shipping, request a demo today.