One trillion dollars. That’s how much revenue global online shopping generated in 2014. What’s more, that figure is projected to double by 2018, according to Forrester Research data. Who are these shoppers? They live all over the globe. They’re discerning. And, according to a recent survey, 82 percent of them are using the Internet to make purchases from merchants located outside their home country.
International e-commerce has opened up a world of opportunity and profit. But can small and medium-size enterprises (SMEs) compete with the global giants?
Yes, if they know how to play on their strengths — and when to leverage the strengths of others. In “Seizing the Cross-Border Opportunity,” a commissioned study on behalf of FedEx, Forrester Consulting surveyed online merchants and thousands of online consumers across 17 countries and territories to learn their concerns, their priorities, and what smart SMEs do to bridge that gap.
Here are some of their key findings on best practices for cross-border business in the digital age.
1. Understand your customer
Many of the merchants Forrester Consulting spoke to jumped into global exporting without a solid strategy. They only became a global company after international customers came to them through search engines or online ads and placed orders. Know who is buying your products and how they found you.
Broadly speaking, online shopping behaviors are similar all over the world, but paying attention to those regional nuances can shine additional light on your customers. For instance, 48 percent of Latin American respondents reported finding international e-tailers through online ads, compared to 31 percent in North America. Banner ads may be a better investment in Brazil than in Boise.
2. Highlight what makes your products special
Cost is certainly a concern to the global e-commerce customer. Cheaper prices and lower duties or taxes were two of the main reasons given for seeking items across borders. However, at 75 percent, the factor most frequently rated “influential” or “very influential” was availability. Consumers turn to their computers and smartphones when they want goods that just aren’t available where they live.
Another key reason to look across borders when making a purchase? The uniqueness of the goods for sale. For instance, 68 percent of respondents in Europe, the Middle East and Africa considered that uniqueness to be influential or very influential when it came time to clicking “buy.”
No other company is quite like yours. Think about what you bring to the table. Is there something you can offer that nobody else can? Be sure to let your customers know.
3. Set global consumers at ease
One major hurdle for SMEs: Most cross-border shoppers prefer multi-brand retailers or marketplaces. In fact, in a survey asking consumers to rank preferred online shopping destinations for foreign goods, small or medium-size independent retailers tended to place fourth out of five.
Why? The two most common hesitations had to do with seller reputation. To shoppers in another country, your small business is an unknown quantity. It’s harder to establish trust, and you can’t rely on name recognition.
One popular solution? Leverage those multi-brand marketplaces for your business. By selling your goods through a popular selling platform, your homegrown venture can build off another company’s global reach, language localization and country-focused marketing. Skittish shoppers get buyer protection, and on-site customer reviews provide an unbiased demonstration of just how good your goods are.
4. Build your brand on excellent service
Besides your reputation, logistics are key for many cross-border consumers. Major deciding factors for choosing a particular store included delivery times, package tracking. and a simple return or exchange process.
When it comes to international shipping for SMEs, delivery features that boost transparency and eliminate guesswork can go a long way to leveling the playing field.
Luckily, you don’t have to do it on your own. Many of the successful merchants from the study worked closely with at least one major global logistics provider. This approach allowed businesses to easily offer those all-important add-ons like guaranteed delivery. However, the best of the best actually made life easier for business owners, offering services like calculating taxes and duties, paperwork support, and streamlining cross-border returns.
It may seem intimidating, but above all, the Forrester study shows that savvy online retailers can compete on the global stage. Make the most of your strong points, build on the expertise of established services — and get your own slice of next year’s trillion dollars.
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Source: FedEx Small Business Center, https://smallbusiness.fedex.com/intl-white-paper.html