5 Ways Technology Can Solve Cross-Border E-Commerce Barriers for Retailers
Over the past 16 months, consumers have increasingly discovered how easy it is to buy unique goods from international retailers. E-commerce websites saw unprecedented growth in traffic as home-bound shoppers turned to the internet for their most essential items when in-store shopping was no longer an option. And coming out of the pandemic, many consumers have continued to shop online. Because domestic retailers couldn't offer the selection consumers needed, they looked to cross-border e-commerce merchants for help.
As the world moves towards economic recovery, this is an opportune time for brands to go global. However, to win international consumers over and keep them coming back, brands must provide an easy, pain-free purchase experience. There are numerous points of friction for both the customer and the retailer in a cross-border transaction, and these can vary by region.
The good news is that e-commerce merchants have a number of options when it comes to investing in technology that helps them expand into new markets with ease. Here are the top five friction points for international shoppers, challenges that can be managed easily by leveraging a next-generation tech solution:
1. Localized Pricing and Currency
Price localization on an e-commerce website is a key factor when it comes to expanding into a global market. This includes displaying the correct local currency for a global consumer in a given market, and settling transactions in that local currency. For EU citizens, for example, a site with localized prices would display Euros compared to Yen in Japan or GBP in the U.K. Meanwhile, multichannel retailers that also work with wholesalers in certain regions will want to avoid undercutting the prices of their wholesale partners. Technology can allow retailers to manage multicurrency pricing with rounding rules, display the correct price in the local currency, and manage landed costs and margins.
2. Local Payment Options
From traditional credit cards to digital wallets, online payment methods vary from country to country. In China, for example, the top payment methods are Alipay and WeChat Pay; in Germany, consumers prefer to use SOFORT and bank transfers to pay for goods. Brands need to offer local payment methods to their customers, otherwise they might abandon their shopping carts. Technology can lend a hand by making dozens of local payment methods available and enabling retailers to choose which ones to display to consumers in different countries. A tech solution should also offer local acquiring to avoid fees related to cross-border payments and reduce any costs associated with foreign exchange rates.
3. Duties and Taxes
Inaccurately calculated duties and taxes can create confusion and frustration for cross-border shoppers, especially if these fees aren’t clearly communicated up front. Furthermore, consumers don’t want to pay additional fees upon order delivery, which often happens if a brand doesn't allow them to pay those fees up front at checkout. Technology solutions provide merchants with the tools to accurately calculate duties and taxes and manage customs documentation so that the end customer receives their order as if they shopped on a local retailer’s website.
4. Seamless Checkout
The checkout experience is one of the most crucial steps along the customer journey. Failure to localize checkout can result in an increase in shopping cart abandonment. This includes using the customer’s preferred language, clearly stating the total cost of the purchase, listing out any additional fees, offering local payment methods, and showing estimated delivery windows and shipping rates. For brands working with a third-party technology provider, it’s important to make sure the experience is localized, end-to-end.
5. Fast, Cost-Effective Shipping.
International shipping is one of the most challenging aspects of cross-border e-commerce. Consumers have high expectations when it comes to receiving their goods. They don’t want to wait, and they don’t want to pay high shipping rates. There are multiple facets to the shipping process, including managing last-mile carriers across each market, customs paperwork, compliance with any product restrictions in certain countries, and reverse logistics if a purchase is returned. Presenting more than one shipping option gives customers the ability to choose how they receive their goods. Technology can help brands offer the right shipping methods to consumers in different markets. And if there's any doubt, the right tech platform can help brands conduct A/B testing in each market to ensure the offered shipping methods meet consumer expectations and preferences.
These are the top five areas where technology can reduce friction in the cross-border experience, however, there are many others. As consumers continue to explore the possibilities of online shopping, expect to see even more demand for innovative technologies that help retailers master cross-border transactions.
Rob Keve is the co-founder and CEO of Flow Commerce, a global cross-border e-commerce platform that enables brands and retailers to sell their products to customers internationally by creating a localized shopping experience.