How to Effectively Sell Cross-Border in 2018
According to Ipsos PayPal Insights 2016, $6.7 billion was spent in global cross-border sales in 2016. As the U.S. continues to be the top export country for consumers from all over the world, it's important for U.S. merchants to make selling overseas a top priority for 2018.
Despite the tremendous growth opportunities in the global marketplace, there are still pitfalls that can interfere with a merchant’s global expansion plans. To prepare for selling cross-border, the following considerations and best practices will help position merchants for success.
Supply and Demand
As merchants look to sell cross-border, it’s important to research foreign shopping trends. While a product might be a “must have” in the U.S., it might not be a hit elsewhere. It’s important to understand local nuances and customs within countries when looking to sell overseas. Some of the top global categories for cross-border purchases include clothing/apparel, consumer electronics, travel and transportation, digital entertainment, and toys and hobbies. Consider references like PayPal PassPort, where merchants can gather market intelligence and find the right opportunity.
Local, Local, Local
When selling overseas, it’s important for U.S. merchants to customize their online shopping experience for their international customers. Key things to consider when building an international online store include website translation, localized secure payments and methods, pricing to reflect local market competition, and images that give consumers the opportunity to virtually interact with the product. A picture is worth more than words in e-commerce, especially when a consumer is shopping from overseas. Additionally, if you have the capabilities, look to offer an augmented reality view of your product to increase engagement and sales.
Online, Mobile, Multichannel
With a variety of channels to choose from, it's key for U.S. merchants to understand what platforms their customers are using to make purchases, as it can greatly improve their shopping experiences. Whether they're shopping from a phone, desktop or tablet, an online store should work seamlessly across platforms to ensure a smooth shopping experience.
In addition to creating a seamless online store, it's also important for merchants to streamline their payment options to ensure that there are limited barriers throughout the purchase process. When shopping cross-border, 72 percent of consumers would prefer a choice of whether to pay in local currency or in their own currency, according to the Ipsos PayPal Insights 2016. In fact, almost half (45 percent) of shoppers don't feel comfortable making a purchase in a foreign currency, and chose this as a top barrier to shopping cross-border.
Shipping and Returns
A major stumbling block for international consumers is the cost of shipping and returning an item. One way to stand out from the crowd is to offer free shipping. Survey results show 46 percent of cross-border shoppers chose free shipping as the No. 1 reason to shop on a global online store. If a merchant is unable to offer free shipping, it's key that it provide price ranges for shipping options, as they'll be rewarded for their honesty. Shipping costs and other fees are the main factors deterring consumers from shopping cross-border.
Taxes/Duties
Before a merchant starts selling and shipping overseas, it's important to recognize the differences in taxes and duty fees country by country. Customers appreciate it when a site is up front about all duties and taxes they should expect to incur with their order so they're not surprised when it arrives. Thirty percent of cross-border shoppers chose fees and taxes as a top barrier to shopping with an international retailer. The time investment of being up front will make a big difference in the back end, and shoppers will appreciate the honesty.
With 2018 around the corner, there's no better time to take advantage of the growth of cross-border sales and start selling internationally. With these helpful best practices, merchants are set up to see success in the new year. Good luck!
Melissa O'Malley is director, global initiatives, PayPal, an online payments service.
