Crunching Data for Painless E-Fulfillment Growth

October 5th, 2023 Hans Jongebloed Leave a comment

An enduring trend of the e-commerce market is continual growth. Proving that convenience is king, online purchases have become a ubiquitous part of the global economy. While this is good news for e-commerce businesses, demand puts increased pressure on e-fulfillment centers and warehouses to accommodate growth. Specialized analytics software is providing a solution, which helps to overcome traditional space, personnel, and inventory constraints by harnessing big data to identify and implement efficiency improvements.

Hans Jongebloed, Senior Postal Expert at Prime Vision, a global leader in computer vision integration and robotics for logistics and e-commerce, explores how bespoke analytics software allows warehouses to scale up operations and support growth.

No stopping online shopping

The e-commerce market is an unstoppable juggernaut. Revenue from online shopping in the USA is predicted to be US $ 915,354 million in 2023, with a compound annual growth rate (CAGR) of 11.3% expected between 2023 and 2027.^[^1] With online shopping becoming ever more popular, the pressure is on e-commerce fulfillment centers to keep pace. In the US, 274.72 million e-commerce users were forecasted for 2023 and though the curve doesn’t rise as steeply as in the last five years, this number will keep on growing. In 2027, it’s expected there will be around 290 million US users of e-commerce services.^[^2]

There are three key factors in effectively managing this growth. Arguably the most important is people. Having access to the right amount of skilled personnel can make all the difference when expanding. Available space is another consideration for growth. Maximizing the business footprint may involve moving to another facility or installing an automatic storage and retrieval system to hold more items in less space. The final aspect is inventory. The key here is to achieve an efficient stock profile that provides everything customers require while optimizing internal warehouse processes.

Analyzing an e-commerce operation

Any constraint regarding these factors can stifle growth, and many warehouse managers see digitalization and specialized software solutions as a way to overcome staff, space, and inventory limitations, whilst admitting that their own operations are not quite there yet. The criticality of this was illustrated in a recent survey of 250 facility managers – 45% of respondents thought that their business could become unviable without an improvement in digital technology and skills.^[^3] Optimizing an e-fulfillment operation with software analytics requires data, and thankfully, warehouse infrastructure and other sources can provide plenty of it. Collating information from warehouse management systems, barcode scanners, sorting machines, plus online shops, retail sales, personnel, and trucks allows warehouse managers to identify e-commerce trends, spot the underlying reasons behind them and make improvements.

Turning correlations into improvements

For example, stock replenishment can be informed by data on which products sell well in certain seasons or those that are often bought together. Therefore, stock profiling can be more optimized to demand at certain times or locations. This data can even be used to influence consumers, offering recommendations through online shops of what products are popular with other buyers, or setting up repeat orders, or subscriptions, for consumables. Employing sales data and shaping customer behavior means warehouses can tailor their offerings between fast- and slow-moving stock. Ultimately, sales forecasting greatly improves inventory and maximizes space, leaving room for growth.

This information optimizes internal processes too. If Mondays are busier than Tuesdays, personnel and resources can be allocated more efficiently, targeting days with higher demand. With data and expectations regarding inbound goods from suppliers or returns, warehouses can manage stock more effectively. Information can be displayed on dashboards in the facility, allowing operators to easily digest findings and react accordingly. Streamlined warehouse processes are always a strong foundation for expansion.

No single solution for all

However, every logistics operation is different, and the effective application of analytics software differs from warehouse to warehouse. Prime Vision supports customers by assessing their data, analyzing it in detail, and providing relevant observations as part of a joint consultation process. This ensures that what’s actually important to a customer’s particular operations is prioritized, with findings on these topics translated into concrete and applicable improvements. With its broad experience across a wide range of e-commerce customers, Prime Vision can interpret this from large quantities of data.

However, operators often know their challenges but struggle to find a solution. A recent Prime Vision project involved optimizing the usage of parcel chutes at a facility. Designed to sort parcels to 500 shops, the volume of items passing through the different chutes varied wildly. Some received the vast majority, overworking personnel, while on others, staff had little to do. Using analytics software to map trends and implement general rules for daily operations, an optimal parcel sorting plan was achieved, resulting in equal parcel distribution and better staff allocation across the chutes, improving efficiency. This example shows the ability of bespoke analytics software to provide an answer to a very specific question.

Prepared for anything

If growth hits a warehouse operation, it is important to be prepared. This is hard when staff, space, and stockholding can’t expand proportionately. However, by identifying the ‘what, where, and when’ regarding a purchase, or, improving internal processes by applying real-world data, warehouse managers can be prepared for anything.

Software analytics solutions from Prime Vision, especially when combined with other scalable automation infrastructure, such as autonomous mobile robots (AMRs) and automatic storage and retrieval systems, provide a proven route for accommodating rapid e-commerce growth. By connecting to any surrounding warehouse system, combining data, and delivering actionable insights – businesses can ensure that meeting future expansion places less pressure on their e-fulfillment operations.

[1] eCommerce market in the U.S. – ecommerceDB

[2] Number of users of e-commerce in the U.S. 2018-2027 – Statista

[3] The critical role of technology in facilities management – Smart Automation

Archives, International Trade

What is Cross-Border E-Commerce? Everything You Should Know

November 14th, 2022 Fahad Khan Leave a comment

Introduction to Cross-Border E-Commerce

International e-commerce or xborder e-commerce is the commercial practice of selling a product online to customers in other countries. Any business may sell online thanks to the spread of digital tools like software applications, programs, online and offline platforms, etc. that have made cross-border e-commerce simpler than ever. E-commerce can also be used by traditional merchants as a test market to see if new international markets would be profitable before setting up shop there.

Organizations today have the option to conduct worldwide business with other nations as well as domestic business within their own country which includes B2C (business to consumer), B2B (business to business), and C2C (consumer to consumer).

Benefits of Cross-Border E-Commerce

The main advantage of cross-border e-commerce is that it allows you to grow your company worldwide and gain exposure to markets and customers around the world. This helps increase the popularity of your brand internationally. With a larger audience, your business will have more potential clients, which could increase the demand and customer orders. As a result, revenue also increases.

Moreover, Cross border has also given a massive rise to social shopping. The products that are less popular domestically have occasionally been discovered to be more well-liked abroad. Cross-border e-commerce can thereby increase your chances of selling sluggish or dead products.

Challenges in Cross-border E-Commerce

The challenges faced in cross border E-commerce are never ending because of such a large scale transaction. One has to take care of a lot of things such as Monetary fraud, Shipping issues, currency difference, etc. Apart from knowing the essentials of international shopping, here are a few issues that must be taken into consideration during the process.

Monetary Fraud

Credit cards are the most popular form of payment for international e-commerce transactions and international cybercriminals have access to advanced and automated tools, such as card testing and credential stuffing. To overcome that, most online retailers use AVSs or address verification systems, which approve credit cards used by customers, in an effort to reduce credit card fraud. This decreases the likelihood of payment fraud but also excludes clients from nations where AVS does not work.

Problems with Shipping

The process of shipping inside the nation is often simple because most taxes and laws are the same. Shipping across borders, however, is more difficult due to the addition of new taxes, legislation, and import and export regulations.

For example, sometimes the overall cost of sending a product to a foreign customer is far too costly to turn a profit for the company. Other times, certain products may be illegal or restricted in other countries, which would prevent the transaction.

Differences in Currencies and Languages

An online retailer’s website must be able to accommodate foreign languages and currencies in order to support users from other countries. However, because they are unable to serve all languages and currencies, they will be limited to a few. Customers from nations whose language and currency aren’t supported will face difficulties because they won’t be able to make purchases.

How Has International E-commerce Evolved Over Time?

Cross-border eCommerce has grown significantly over the years as e-commerce has gained popularity. According to a Statista survey, it accounted for 15% of global e-commerce shipments in 2016 and is expected to increase to 22% by 2022. As per another estimate by Zion Research, cross-border B2C eCommerce in particular would reach USD 4,195.4 billion by 2027 at 28.4% CAGR. Companies have also started to use Augmented Reality (AR) to enhance the shopping experience of their customers.

The Expansion of Global E-Commerce

The development of e-Commerce has been greatly impacted by the previous year because of numerous limits on physical retail outlets due to the pandemic and the expanding number of people who spend more time at home.

Global e-Commerce has benefited from technological progress in connection, with smartphones accounting for more than half of all web traffic in 2022, as per Statistica. Many consumers now regularly buy things through mobile commerce. With the widespread adoption of e-wallets and straightforward international payment options like PayPal, Google Pay, and Skrill, coupled with credit cards and bank transfers for many online businesses, this tendency will only intensify in cross-border marketplaces.

The effectiveness of logistics and delivery management firms has also changed how and when we receive items. Consumers now have more control over their deliveries because businesses provide a variety of product delivery services like global courier services, same-day courier, on-demand delivery, etc. This flexibility allows them to schedule when and where they want their deliveries to be made, allowing them to live their lives according to their preferences. Improved sales are likely to follow when online retailers concentrate on developing solutions that cater to the local market they are selling to.

How To Be Successful At Cross-Border E-Commerce

Entering the international e-commerce space is a surefire method that offers a chance to make money while setting up a business for long-term success. Though it is easier said than done, here are the actions that every entrepreneur should follow to be successful in international trade.

Locate the Best Markets for Your Products

Although expanding internationally can be exciting, conducting e-commerce by country is a great plan. Find external markets that are very interested in your stuff to start. Do your research and evaluate those with a favorable business climate, and then take over one market at a time.

Verify Whether Your Products are Classified as Restricted Trade Items

E-commerce is impacted by several overseas countries’ distinctive product constraints. Medication, food, drinks, alcohol, cleaning supplies, and many other products are some examples of banned products that could not be sold through cross-border e-commerce. These restrictions are set forth by the government or other international organizations. In order to avoid product bans in international markets, check to see that your products do not violate any of these limitations.

Assess the Prices and Taxes Affecting Your Target Market

Taxes from other countries might be tricky with varying rules and regulations. Make sure your business complies with the tax laws of the foreign market to increase your chances of existing in cross-border e-commerce. Additionally, you must be aware of rival pricing for comparable goods as well as distribution and other overhead expenditures.

Utilize Third-Party Logistics Services

E-commerce companies are all too familiar with the hassle of shipping internationally. Working with a third-party logistics provider is a wise choice if you want to carefully fulfill orders and guarantee customer satisfaction. Such businesses will fully manage the shipping process and provide extra services like distribution and warehousing. Technologies such as “pay later” have also stood out in the past few years and have gained a lot of popularity by making the transaction pocket friendly. .

Contract out Customer Service

Language barriers could lead to difficulties in communication. Your company is in jeopardy if customers have issues communicating with your customer service desk or expressing themselves. Consider engaging a cross-border e-commerce customer service provider to assist you in handling all verbal and nonverbal conversations with the locals in an effective manner.

Put user testing first

Reading a plethora of cross-border e-commerce reviews won’t provide you with the expertise you need to give clients a superior buying experience. It’s crucial to carry out user testing on a website before deploying it. Because consumer behavior varies, doing this enables you to get a glimpse of what to expect. You may find the website elements that are best for your target market by conducting user testing. It provides insightful information on the customer experience, enabling you to make required changes before starting the operations.

Effective cross-border e-commerce systems

Reliable software for cross-border e-commerce assists companies in streamlining procedures involved in doing business abroad. These systems offer tools for translation services, product classification, item restriction management, denied party screening and landed cost (duty and tax) calculation. Businesses hope to enhance their international sales strategy, reduce trade risks, and boost operational effectiveness by utilizing cross-border e-commerce platforms.

Supply chain and logistics managers, who oversee all facets of a global firm, such as shipping consolidation and international payments, frequently deploy cross-border e-commerce software. Cross-border e-commerce software is frequently integrated by businesses with other e-commerce technologies, like shipping software and payment gateways.

A software product must meet the following criteria to be eligible for the cross-border e-commerce category:

Determine different categories of business risks, such as supplier risk or non-compliance
Offer shipping options or carrier platform integration
Permit businesses to control landed expenses and prepay all taxes and duties
Permit customers to purchase using their native language and currency
Offer a variety of payment options or incorporate payment gateways
Sync up with order fulfillment and e-commerce systems

FAQs

Describe Cross-Border E-Commerce With Examples.

Cross-border e-commerce is a method for business growth in which companies create or join online marketplaces to sell their goods internationally and tap into the lucrative global market.

A good example is Ubuy which is a Kuwait based cross-border business that sells to customers in different countries.

What Does Localization in E-Commerce Mean?

Localization in e-commerce is the process of making content on a website appropriate for its global audience. It should blend in with the local content seamlessly.

What Is E-Commerce Omnichannel?

Businesses may offer customers an exceptional purchasing experience across all online and offline marketing channels by utilizing this e-commerce strategy. A customer will always have a consistent and positive shopping experience whether they make a purchase in-person or online.

How Promising Is the Cross-Border E-Commerce Future?

Unquestionably, international e-commerce is a fantastic approach to increasing brand recognition and positioning your business as a market leader. It provides a firm with access to a wide range of customers and is here to stay. However, retaining high-quality data is essential to making this happen. Additionally, businesses must handle the difficulties of managing data across various foreign e-commerce platforms.

What are the costs of cross-border e-commerce platforms?

Prospective buyers will probably need to get in touch with vendors directly to receive a pricing quote for a cross-border eCommerce platform. They can anticipate a fixed cost that could be charged monthly, annually, or dependent on the number of transactions.

Conclusion

Cross-border e-commerce is developing globally and has significantly contributed to the expansion of the global economy as a result of rising digitization. Online international purchasing is becoming more and more popular.

Now that you know more about cross-border e-commerce, its importance, its potential drawbacks, and the best way to accept local payment methods, it’s time to consider which markets you should target first to take full advantage of the huge opportunities for growing your business globally.

Archives, Global Logistics, Global Trade Daily

The Future of E-Commerce: Five Post-Pandemic Trends Sellers Will Need to Know

March 23rd, 2021 Kenny Tsang Leave a comment

Kenny Tsang, industry expert and Managing Director of PingPong Payments, provides his top five trends to define success in 2021.

In the past year, the rules of e-commerce have effectively been rewritten. In an increasingly touchless society, our lives have become digitized, changing how we engage, interact, and view day-to-day life. Now, new online buying behaviors have emerged, and millions of consumers that previously relied on brick-and-mortar sales are shopping online to meet everyday needs.

But the rise of e-commerce hasn’t been without shortcomings. At the height of the pandemic in May, sellers, welcoming millions of new consumers, were faced with supply chain disruption, shock shortages, and business loss. Many turned to international options to mitigate issues, and cross-border sales saw a staggering 21 percent increase in year-on-year sales in June.

With uncertainty surrounding the year ahead, sellers will naturally be wondering if this growth is sustainable. It will be vital more than ever to plan for a post-pandemic environment.

To prepare, here are five key trends that will define success in 2021:

Growth of Cross-border, Global Marketplaces

In a year of uncertainty, the global marketplace has become one of the very few resilient, effective, and profitable platforms to weather the storm. Fuelled by the transformation of shopping, Alibaba, Amazon, Etsy, and Taobao all reported record figures this year as consumers turned to these new ‘virtual shopping malls.’

By the end of 2020, an estimated two billion people will have made an online purchase, and the rise in users is beginning to signal a shift in online sales. As important as the U.S. market is to this growth through marketplaces such as Amazon, eBay, and Etsy – sellers can often forget that 85 percent of the industry purchasing power lies abroad. In fact, in China, e-commerce sales have recently overtaken the U.S., and the country’s ‘Singles Day’ shopping event eclipsed Black Friday in the U.S.

At the end of December, the global e-commerce market was expected to reach $1 trillion and early forecasts anticipate the trend to continue. With new cross-border payment solutions that can manage overseas logistics, pay suppliers in a local currency, and make VAT payments in real-time, becoming an international seller is easier than ever before.

Diversifying Supply Chains

To say that lockdown restrictions affected supply chains in 2020 would be putting it lightly. At the peak of the crisis, disruption to factories highlighted the fragility of relying on one single source for inventory. With little to no option left for sellers, the shift to diversifying supply chains to mitigate financial repercussions has called for an industry-wide rethink.

However, disruption isn’t new, and one of the biggest mistakes sellers often make is overlooking future risk planning and the prioritization of corrective actions.

Instead of assuming there won’t be interruptions to one supply chain, consider other sources. With an abundance of cross-border services such as parcel consolidation, global fulfillment, and payment providers, sellers can – and should – explore international markets.

Faster, and Faster delivery

As the world changes, consumer preferences, schedules, and expectations are also rapidly affecting the speed and manner of how products are delivered. In an age of immediacy, the industry standard of the typical 7 to 10 delivery day window has become outdated. Over 90 percent of consumers are now willing to pay for same-day or faster delivery.

Thanks to online marketplaces such as Amazon Prime, Walmart, and Best Buy, the ‘new normal’ of instant delivery in as little as two hours has challenged sellers to rethink their customer service approach. Now, the speed, price, and the previously optional ‘add ons’ are differentiating sellers through competitive advantage in an e-commerce race that most cannot afford to lose.

The key is to be flexible. With diversified supply chains, robust inventories, and reliable fulfillment management, sellers can use their agility to deliver to the right customers at the right time.

The Rise of Social Commerce

The business advantages for retailers to sell directly through social media in a year that has seen e-commerce become a focal point of day-to-day continuity has drastically strengthened. The opportunities to buy, sell, or promote on one integrated platform through leveraging channels that millions of people are using now appears to be a no-brainer for most sellers.

Staggeringly, over 87 percent of e-commerce shoppers believe social media helps them make a shopping decision, and yet, only 40 percent of sellers are using it to generate sales. In 2021, experts project this number will rise significantly; we’re arguably already seeing its value in China, which has hosted its biggest sales event – Singles Day – on record so far. Through live-streaming, two-thirds of Chinese consumers said they purchased products via the platform in the past 12 months, citing “instant information” as a significant deciding factor.

Live-streaming is bound to become part of the U.S. shopping experience, and with more features evolving and launching alongside industry growth and demand – sellers should keep up with new trends.

The Transformation of Retail Shopping Events

As online commerce continues to prevail, annual in-store holiday season doorbusters promising discount deals have begun to lose their relevance. During the 2020 holiday season, deals popped up early, 24-hour sales lasted a month, and by late November, most of the ‘festive shopping’ had been done online.

Retail shopping events have changed, accelerated, and turned in favor of digital commerce, with sales increasing 30 percent year-on-year during the 2020 holiday season. More importance is being placed on the broader e-commerce market, and the increase in competition in an already saturated market will require sellers to work smarter.

Instead of waiting for domestic season events, think globally. By partnering with the right cross-border payment provider, sellers can enter new markets, effortlessly move money to all corners of the world, and grow a larger audience that will effectively move sales forward post-pandemic.