The e-commerce retail market is set for massive growth: Statista reports that e-commerce retail purchases will rise to 22 percent of worldwide retail purchases in 2023 – up from 18.1 percent in 2021. Cross-border e-commerce was on a climb before the events of 2020, but the pandemic spurred even more growth.
Brick-and-mortar shops had to close for a period, and online retail became the sole option for most shoppers, cementing it as a preferred shopping method for many consumers. Businesses of all sizes are looking to branch out into the cross-border e-commerce realm and are doing so at a crucial moment, but there are factors to consider depending on your business’s size.
Read on to learn more about the considerations that come with cross-border e-commerce for businesses ranging from enterprise-level to the small shop.
Enterprise Checklist: Centralizing Locales Through Technology
If your business is on the larger side with multiple local sites then you’ll want to maximize your investment in your cross-border e-commerce strategy and consider some significant cost savings. Managing multiple country sites uses up a number of resources and requires significant head count to manage in each country or region. Separate teams in different regions means that consistent branding can be a challenge across locales. Furthermore, it is impossible to manage dozens of separate local websites to take advantage of long-tail demand in countries that are underserved.
A powerful technology can provide a number of benefits to help manage costs and resources, while supporting significant global expansion. For one, a cross-border solution can consolidate global experiences under one instance of your website so that domestic and international experiences are managed in one place and properly coordinated across all the local domains. The right cross-border platform centralizes workflows and collaboration in one intuitive interface, where various teams involved in creating local and delightful customer experiences for global shoppers can login easily and work together.
It’s particularly important to choose a comprehensive technology that provides the ability to easily localize every aspect of each international market experience. From multi-currency pricing and duties and taxes calculations and display, to local payment methods, direct international shipping and returns, a platform that simplifies the management of all these pieces in the customer journey can minimize overhead costs in additional creating efficiencies so that teams can spend more time focusing on generating revenue rather than managing a complex process.
Enterprises will also do well to adopt e-commerce software that allows them to automate certain processes in cross-border e-commerce initiatives and reduce the burden around compliance and regulation. The right solution will reduce operational friction and risk across the board so your enterprise can offer localized customer experiences and boost conversion and sales.
Mid-Size Checklist: Pricing and Marketing
Mid-size businesses are in a great position to succeed in cross-border e-commerce, particularly if they have a strong social media following or are willing to invest in an international marketing strategy. But there are several areas they’ll need help.
One of the biggest considerations for mid-size companies going global is calculating taxes and duties and effectively displaying them across the site, from the product detail page through the checkout process. Building this sort of technology in house is often prohibitive, so a mid-size business will usually look to a partner to help. A strong cross-border solution and services partner can easily harmonize the product catalogue and calculate duties and taxes so that these businesses won’t be burned by this critical aspect of the customer journey.
Shipping is another area that can be a challenge. Some solutions might force online retailers to use a cross-dock and then freight forwarder to deliver products overseas. A solution like ours, at Flow Commerce, can support direct shipping so that mid-size e-commerce companies can provide accurate delivery windows for shipment to customers and also lower the costs that are usually involved in cross docking. There are numerous other benefits as well when calculating landed costs, and a strong technology partner can provide the flexibility, transparency, and most importantly control so that these businesses can optimize their unit economics for their business.
Additionally, investing in marketing will be an important component of your successful cross-border e-commerce strategy. While this element is necessary for businesses of any size, it’s important for mid-size companies to remember this is a factor to leverage. Consider that the messaging and branding your business uses in one country may not resonate with customers in other countries, so research will be key to localize your brand as much as possible. Once you’ve constructed your marketing strategy, e-commerce software can help you provide local experiences by allowing online brands to quickly localize product feeds for major search engines and social media channels in the click of a button.
Small Business Checklist: Software and Scalability
These days, we find that smaller businesses are usually more nimble than their larger counterparts and look to sell cross-border along with their domestic launch, or right after. There are challenges being the small player in the field. For one, they’re up against more established brands, but there’s an advantage. Smaller businesses can spread quickly and reach more markets faster than larger businesses that may experience greater inertia in their cross-border strategy. But resources are always a challenge here, so it is important to think about all the areas that are necessary to deliver that smooth shopping experience to build a loyal customer base and acquire new customers.
Technology can help. For smaller businesses, working with a cross-border solution provides a number of benefits. With a more nimble tech stack, integration is a breeze. A strong partner can enable all the parts of cross-border commerce that a small business wouldn’t be able to manage.
By using a centralized platform to manage all local experience, small businesses can level the playing field against larger competitors. This can deliver significant cost benefits as well. For example, because many smaller businesses have lower volume of orders, a tech partner that manages international shipping can provide better rates from carriers and shipping providers. In other words, small businesses can take advantage of better negotiated rates handled by the software partner. This can allow these businesses to provide better shipping rates to their international customers in addition to optimizing for speed and choice of carrier.
Similar to midsize and large businesses, small businesses will also benefit from resource management, operational automation, and other areas that provide cost savings. A centralized platform can offer these benefits and more that will allow small businesses to expand quickly into new markets without incurring huge costs. With the world at their fingertips, a strong tech solution will empower small businesses to compete effectively on the global stage.