As a result of the ongoing growth in cross-border online shopping, innovations making overseas purchases easier will be prominent among 2015’s e-commerce trends. Almost half of the United Kingdom’s retailers (43%) have reported that 21%-30% of online sales come from international sales (Channel Advisor: Multichannel E-Commerce Study, 2014), while 50% of Mexicans buy from overseas websites (WorldPay: Global Online Shopper, 2012).
Currency converters are predicted to be widely used in e-commerce platforms next year. Even in the world’s largest economy, the United States, 68% of online businesses still fail to offer local currency payments (Digital River World Payments: The Localization Challenges that Face Today’s Online Merchants, 2012). Multiple-currency pricing allows customers to see what they’re paying in their own currency before they buy.
Tax calculation tools will make pricing more transparent in 2015. These tools generate estimated taxes and duties based on product type and cost, as well as customer location. Delivered Duties Paid (DDP), whereby the seller assumes responsibility not only for delivery, but payment of taxes and duties as well, will also increase pricing transparency.
Mindful that accepting only international credit cards can cut penetration – by 80% in South Korea, for instance, where 45 million domestic-use-only cards are in circulation (Digital River World Payments: The Localization Challenges that Face Today’s Online Merchants, 2012) – many e-tailers will start accepting local payment methods over the next 12 months.
Local alternative payments, which don’t require disclosure of sensitive card numbers, also reassures customers about fraud. More sites will accept payment from the likes of Alipay and Tenpay in China, where fraud is rife and 56% of shoppers consider transaction security a key concern (Visa, 2013).
With many businesses generating more than 50% of their income from overseas (Javelin Group: International eCommerce Operations), small e-tailers increasingly attempt to emulate retail giants in establishing overseas fulfillment operations, or with partners, or themselves.
Centralized fulfillment – distributing goods internationally from a single country – means consumers usually get longer delivery lead times.
E-tailers need not navigate the complexities of decentralizing inventory storage alone. Logistics operators with a local presence and knowhow can manage inventory and handle orders on their behalf – thus negating the onerous initial costs of buying premises and hiring a staff or paying for unnecessary warehouse space should orders wane.
Customized international delivery
The one-size-fits-all delivery model is outdated. With shipping partners offering a growing range of services, successful e-tailers will increasingly empower customers through a wider choice of delivery options – including automated pick-up/returns from conveniently located retailers and delivery to even the most remote of destinations.
End-to-end tracking capabilities will become more sophisticated. As well as knowing the date and time of delivery and where their package is, customers will be able to amend delivery times and destinations even later in the process.
Consumers often favor overseas providers over domestic operators. Not only from a knowledge, but also from a service perspective. For instance, a 1% currency appreciation in the Asia-Pacific region – the world’s largest e-commerce market (Asia Pathways: Asian Development Bank Institute, 2014), where consumers value the efficiency of international supply chains –triggers a 0.6% rise in inbound post (Asia Pathways: Asian Development Bank Institute, 2014).
E-commerce sites that focus on simplifying the cross-border shopping experience will therefore surely reap the biggest rewards in 2015.