What’s important for customers when shopping online cross-border
The internet has revolutionized shopping more than anything else. Having international products in local stores is nothing new. Yet, it is revolutionary, how incredibly easy it has become to directly shop from the merchants from the all around the globe. Boots from Australia can arrive in the UK within days. Only a few weeks pass from the invention of a new smartphone in the US to it causing a sensation in China. Today, there are few limits to what can be bought and sold on the global marketplace. Especially small to medium-sized companies can nowadays enter the cross-border trading market and expand their customer base internationally.
In this article, we present you interesting statistics on cross-border e-commerce as well as valuable insights into consumer studies that help you optimize your online shop for customers from all around the world.
The increasing numbers in cross-border shopping are naturally driven by a general boost of e-commerce. According to a survey by Bitkom Research, 80% of all Germans (age 14 and above) made an online purchase in 2018. If only considering the internet users, the figure is even as high as 97%.
Looking at the incidence of online cross-border shopping, the numbers vary significantly between the countries. People from Ireland (16% exclusively domestic purchases), Austria (19%) and Israel (21%) are most likely to buy products from abroad, while Japanese customers (94%) are almost exclusively visiting domestic web stores, as a survey on the usage of cross-border e-commerce shows for 2018.
And what are the countries that are target of online shoppers from all around the world? According to PayPal consumer research, China (26%) is ranked the most popular cross-border destination for global shoppers. The USA (21%) comes second, followed by the UK (14%), Germany (10%) and Japan (5%).
New trend: mobile shopping
The majority of cross-border purchases are still made on computers or laptops. Yet, with new mobile gadgets on hand – such as smartphones, tablets, smart TVs or game consoles – especially shoppers from the Middle East, Africa, LATAM and APAC are most likely to ditch the ‘old-school’ devices for them. In Germany, the Bitkom survey finds, 50% of the customers (age 14 years and older) have made a purchase on their smartphone. In the youngest customer group (age 14-29 years) it is even 78%. On the Hermes Supply Chain Blog, you can find more information on the new trend topic m-commerce.
What’s important for cross-border shoppers?
Now, we are going to explore the main drivers for shopping cross-border as well as the main challenges that merchants face, when offering their goods worldwide.
In the ‘global village’ it seems like potential customers can reach the websites of merchants from overseas as easy as their local websites. Nevertheless, there are certain factors that are important to keep in mind, when optimizing the foreign customers’ shopping experience.
Cheap or unique, but definitely fast
For most of the consumers (72%), a lower price is the principal motivation for purchasing goods abroad. Almost half of them (49%) name availability as a significant factor. Shopping across the borders means a free choice of (unique) foreign products and not being limited to the local market. To enjoy the effect of a Korean facemask, consumers do not have to save money for a journey through Asia. They can simply get it delivered to their front door.
Free of doubt, customers wish a fast delivery, so it is conducive for vendors to have a stable logistics partner, like Hermes BorderGuru, at hand to shorten shipping times and deliver the goods smooth and reliable.
Good reviews are valuable
As it is the point of contact and sale, particular focus has to be laid on the vendor’s website. Foreign websites have to gain the consumers’ trust. This is influenced by their perception of social and formal norms in the merchants’ country and by the perceived reputation. A study has shown, that consumers pay more attention to foreign websites’ reputation and policy than the website’s design quality. Furthermore, positive reviews are essential to gain trust. A study of the Spanish market also detected a positive correlation of the status of digital education with the numbers of cross-border shopping. With developed online skills, customers felt safer, gained trust and made informed purchasing decisions based on other customers’ reviews. Yet another plus is a clear and fair policy, protecting the customer’s privacy and ensuring a safe and secure shopping experience.
The fear of fraud is the major reason, why potential cross-border customers refrain from completing an order, as the PayPal study finds. Potential consumers need to feel safe on the merchant’s website. This safety can on the one hand be conveyed by the use of the customers’ language. When aiming to reach out to a number of markets, a multi-language website and customer service are an advantage. For smaller or inexperienced companies, this could also be organized in cooperation with a service provider, who acts as a proxy on the trader’s behalf.
On the other hand, offering the preferred payment options of the targeted market, e.g. paying by invoice in Germany, can also boost the sales. For a broader overview of the various payment favorites in European countries, visit the Hermes Supply Chain Blog.
Keep your costs transparent
A lack of transparency relating to import duties and taxes is yet another concern that complicates the flow of cross-border shopping. Nobody likes to be left in the dark. For 38% of the customers surveyed, it is relevant that the costs are transparently shown, and that the payment is possible in the local currency. Here, Hermes BorderGuru can assist you and make the shopping experience for your customers as easy as a domestic one. With our ‘shipping client’ implemented into your online shop, your customers are always informed about the incurred costs, and possible customs fees can be displayed in various currencies. Moreover, your customers can comfortably track the delivery status of the parcel.