COVID-19 Has Made Cross-Border E-Commerce a Crucial Channel for Brands

If there has been one bright spot amid the retail gloom of the past few months, it’s cross-border e-commerce. The world watched in shock as companies that were heavily dependent on brick-and-mortar stores suffered during lockdowns. Even brands with strong e-commerce strategies experienced headwinds as unemployment and job insecurity drastically changed consumer behavior. However, U.S. brands that have been able to tap the right international markets during the pandemic have seen unprecedented growth in their cross-border digital sales. Even as retail stores across the U.S. begin to reopen, it’s important to heed the lessons from earlier this year.

The numbers have been impressive. Our recent data show that in the first two weeks of June, apparel sales by U.S. brands selling online to consumers in international markets grew a staggering 121 percent year-over-year. Footwear sales growth was even higher during the period, at 122 percent year-over-year. Overall, U.S. brands selling cross-border saw their digital sales rise by 106 percent in early June, according to our data.

Cross-border e-commerce provides U.S. brands not only with significant growth opportunities, but also with greater flexibility and security. Gaining access to new audiences in different geographies expands a brand’s potential customer base and mitigates risk, as economic, political and health factors, not to mention seasons and trends, differ by region. The key is identifying which markets represent the highest potential, quickly shifting inventory to them, and developing close, long-term relationships with customers in those regions.

In the past, a consumer who clicked on a link to a foreign brand was too often met with a confusing, unfamiliar shopping experience that failed to generate trust or result in conversion. Today, brands can plug a cross-border solution into their e-commerce site to ensure they provide an experience that's hyperlocalized, with familiar payment options, transparent and accurate pricing, fast delivery by a local shipper, and simple, local returns.

U.S. Brands Are Finding Growth and New Customers in Unexpected Places

Throughout the pandemic, consumers in markets around the world have been clamoring for access to U.S. products. Our data show that in April, during the peak of the U.S. retail shutdown, U.S. brands selling cross-border were able to find significant volume growth in other world markets, most notably Israel, where U.S. brands’ online sales volumes rose 178 percent year-over-year; Ireland, where they rose 173 percent; and New Zealand, where they rose 168 percent. In May, when physical retail stores were just starting to reopen, U.S. brands were able to boost cross-border e-commerce sales by 113 percent overall by focusing on selling into the Asian market. For example, U.S. brands selling online in Malaysia saw their sales rise an impressive 359 percent year-over-year in May, while those selling to consumers in Singapore saw 284 percent growth during the month.

A cross-border e-commerce partner can provide unique insight into the retail and cultural dynamics of different geographies to help brands identify and quickly enter the markets where demand for their products is already high. A strategic partner can also help identify which international markets are generating the highest sales for a particular brand, where their sales are growing the fastest, which markets the brand should target that it hadn’t previously considered, and where it should focus its promotional efforts.

Selling cross-border can also help brands diversify risk and manage inventory. Brands can leverage analytics to identify and open new direct-to-consumer channels for their excess inventory, so they can quickly move the right products to the right markets. As seasonal goods or particular fashion trends lose relevance in one region, for example, cross-border analytics can help brands quickly shift that merchandise to regions where the goods are more likely to sell.

Expect to See Continued Cross-Border E-Commerce Growth in Coming Months

Companies that double-down on their digital channels are likely to see continued strong cross-border e-commerce growth. Even with brick-and-mortar stores now reopening at staggered rates, consumer foot traffic isn't expected to return to normal levels in most markets any time soon due to newly enacted social-distancing rules and consumer concerns about health and safety.

To take full advantage of the cross-border opportunity in markets across the globe, brands need to integrate a cross-border solution into their existing e-commerce platform. While we hope there will not be subsequent waves of this global pandemic, we can be certain there will be other disruptions to the retail industry. That’s why brands should seek growth and resiliency through new channels and markets. A cross-border e-commerce strategy is the insurance policy all brands need to build in flexibility, security and future growth, no matter what risks the retail industry may face in the future.

Tommy Kelly is CEO of eShopWorld, an e-commerce solution whose technology plugs in to retailers’ and brands’ existing domestic infrastructure to enable them to quickly sell in any global market with a truly localized shopping experience.