I recently came across a study in which 80 percent of executives from leading U.S. e-commerce companies said they considered expansion to international markets “critical” to future growth. The survey also revealed that Canada, Western Europe and Asia account for most international sales from U.S. websites, followed by China and Japan.
These findings are indicative of the “no-turning-back” mentality taking place among retailers, as the reality of the growing global e-commerce marketplace takes hold. U.S. retailers now look beyond their borders and see a world in which 80 percent of B2C e-commerce sales are taking place outside of North America, and in which consumers are increasingly open to shopping across borders.
International e-commerce sales have become so pervasive in fact, almost 60 percent of shoppers say they made an international purchase in the past six months. That number jumps to almost 63 percent for European consumers, and 58 percent for Asia-Pacific shoppers.
This is especially true within the lucrative U.S./Canada trade relationship, with as much as one-third of Canadian e-commerce purchases going to U.S. sites, and more than 60 percent of Canadians having made an international purchase in the last six months.
Today consumers across the globe, including in emerging and developing countries, have unprecedented access to brands and product selections online. Consider, for example, that 75 percent of online shoppers in India and 61 percent of shoppers in Nigeria have made international purchases. It’s no wonder then the value of retail e-commerce is surging and projected to be valued at almost $5 trillion by 2021, just two years from now.
For smart retailers, the customers are there. The challenge is to connect with consumers in a way that aligns with their local customs and expectations to localize transactions and fine-tune the customer experience. And, since ensuring seamless deliveries is an important part of any customer experience, it’s essential to understand that international logistics resources are possible today that were unthinkable just a few years ago.
Meeting customer expectations – in every country
In thinking about satisfying expectations, a retailer will come to understand that the world’s consumers essentially want the same things when shopping online:
- Consistent inventory across all channels
- Detailed product information
- Site navigation in their native languages
- Prices listed in local currencies
- Online payment/currency-conversion capability
- Access to rebates and other savings incentives
- Fast delivery – what they want, delivered when they want it.
A retailer must dedicate time to market research as a way to understand consumer preferences and dislikes. You need to make sure there’s demand for your product, determine who your competitors are, and then find your competitive advantage. A good logistics strategy will be an integral part of that competitive advantage because seamless, on-time deliveries – and hassle-free returns – are among the most important deliverables for consumers all over the world.
PriceWaterhouse Cooper’s 2019 Global Consumer Insights Survey asked consumers in 27 countries about their shipment expectations. Among the more interesting findings, is the impact mega-retailers including Amazon, Alibaba and Net-a-Porter have had in defining global consumer expectations. Global consumer expectations include free shipping (72 percent), free return shipping (65 percent), package tracking (54 percent) and same-day delivery (50 percent).
To accommodate these globally-shared expectations, international retailers are building logistics strategies that create the “look and feel” of a domestic delivery – despite being an ocean or a continent away. Italian customers don’t really care if customs delays affected a shipment leaving the United States, or that bad weather over the Atlantic forced a shipment to be re-routed. They just want their packages delivered on time, as promised. Every time.
Behind the scenes, logistics providers are working to expand their international footprints, to ensure capabilities are in place to help businesses meet their delivery promises. For example, my company recently announced a $1B investment in the future, including a new national hub set to open in Toronto in 2021. You’ll find similar developments happening around the world.
Technology and innovation are also allowing logistics companies to provide levels of service that were unthinkable as recently as a few years ago. Some of those solutions include:
-Customized solutions. Shipping companies can support a retailer by providing a wide range of options to build the best solution for a particular customer’s needs. Shippers have traditionally been bound by rigid carrier schedules; today, a solution can meet a specific need. For example, a shipment traveling from southern California to Ontario would benefit from direct linehaul service to the border, followed by induction into a Canadian distribution center. The direct linehaul could conceivably shave two to three days from a “traditional” Canada-bound schedule.
-Different modes of transportation. Hybrid solutions might integrate ground service with a rail or air component, depending on a particular situation. In fact, 2018 was a particularly strong year for intermodal volume on U.S. railroad, according to the Journal of Commerce.
-Expedited service. For shipments to Europe, Asia, Latin America, or even across North America, a retailer can take advantage of unprecedented expedited air solutions. We used to think of “expedited” as a solution reserved for extreme emergencies, but today, retailers increasingly rely on expedited air solutions because of its guaranteed, anywhere/anytime capabilities.
-Cross-border expertise. Efficiencies in customs management now make it possible for shipments to move swiftly across international borders. Experienced providers will ensure maximum efficiency in the clearance process, including assignment of the proper tariff classification code. Getting the tariff classification correct is important because an incorrect classification will delay a shipment, and shippers might pay a higher rate of duty. A report by the Auditor General of Canada found 20 percent of shipments arrive at the border with an improper code assigned! And since tariff classification is used to determine eligibility for free trade agreement benefits, an incorrect classification could cause the shipper to miss out on those savings as well.
E-commerce truly is the engine of future retail growth. And thanks to innovations in transportation efficiency, your access to the world’s customers has never been easier.