At Flow, we want to make it as easy as possible for retailers and brands to engage in cross border e-commerce. Each installment of our “How to” series of blogs and downloadable eBooks focuses on a different country, offering resources and insights to help brands and retailers successfully launch e-commerce in that market. The latest installment will focus on one of Europe’s mightiest economies: the United Kingdom (U.K.).
While the uncertainty surrounding the U.K.’s departure from the European Union may make cross border e-commerce more complex than it is today, demand for online shopping is still booming, increasing in 2017 to 13.7 billion pounds, or 15.6 billion euros – a 13.65 percent increase over 2016. The U.K. is right behind the US in frequency of online shopping: 27% of U.K. adults surveyed said they make online purchases “once per week” vs. 32% of US adults. Many U.K. consumers are “browsers” who don’t always know what they want when shopping online — but they will often take recommendations from friends via social media, and are highly responsive to digital and print ads promoting special deals.
The U.K. presents a high incidence of cross border shopping: 50% of U.K. shoppers say they have made a purchase from a cross border retailer. However, as with any new market, the U.K. has some risks and considerations that are unique to this geographic and cultural location. The top barrier for brands and retailers entering the U.K. market: delivering a localized experience.
Building Loyalty and Trust with Localization
Like many international markets, U.K. shoppers are prone to be more loyal to their local brands, although they will try international brands if the price and reputation are right. In fact, many US retailers who attempt to do business in the U.K. struggle because U.K. shoppers are used to high-touch, personalized customer service, whether in-store or online. Trust is also a major factor: only 25% of U.K. shoppers surveyed said they trust cross-border retailers as much as in-country retailers.
Checkout and Payments Trends in the U.K.
Credit cards remain the most popular payment method for online purchases: almost 40 percent of all online transactions are still purchased via credit cards. Another popular online payment method in the U.K. is PayPal, which together with credit and debit cards represent 96% of all online payments. See more about payment preferences in the U.K. and other top e-commerce markets in our International E-commerce Shipping Journey cheat sheet.
U.K. consumers expect transparency and communication at every step of an online transaction. For example, 81% of U.K. shoppers want to receive proof from retailers that a purchase has been shipped, and 73% want to track the status of the purchase once it’s been processed. Returns are a major consideration for this market: Barclaycard calls U.K. shoppers “serial returners” and estimates that the country sends back about £7bn in goods each year. It’s vital for brands and retailers to include clear, concise language about return policies on their U.K. e-commerce sites.
Considerations and Risks
So far, important agreements such as the cost of card payments between the U.K. and the EU are still up in the air. The U.K. still must re-negotiate 759 international treaties and trade deals with 168 countries, and each of these negotiations could impact the total cost of imported goods.
However, with great change and uncertainty also comes opportunity. The buying power of consumers in the U.K. makes the country a vital trading partner for the EU and other large global economies. It’s likely that re-negotiations will be focused on promoting, rather than hindering, cross border trade.
Find out more about the U.K. e-commerce market by downloading our free eBook, “Keep Calm and E-Commerce On: How to Sell in the U.K.” And don’t forget to request a demo of Flow’s cross border e-commerce platform to learn how your business can seamlessly enter the U.K. and other global markets.