Visibility, reliability key to success in booming cross-border ecommerce

A good track and trace system, with IT that integrates well, is the biggest factor when online merchants select a parcel carrier partner to help expand their business across borders, according to new research from Triangle Management Services. The study – Cross-Border e-Commerce: Improving the Consumer Journey – shines a light on the explosive growth being seen in international ecommerce, as consumers become more confident with online shopping and begin to make purchases on websites outside their own national boundaries.

Revenues generated by online retailers selling internationally are predicted to almost treble by 2015, but the full potential for future growth is currently hindered by a number of key barriers.

The research looked at 1,209 merchants trading around the world, 56% of whom already ship cross border, with qualitative information provided by in-depth interviews carried out by Triangle’s multi-disciplinary team of consultants.

It found that shipping costs and the challenges of running returns were among the top five major barriers to selling across national boundaries.

In choosing their carriers, the study suggested that 41% of merchants prioritized those offering good visibility systems to track shipments going cross borders.

This was the top factor, even above service reliability (39% of merchants citing this as a factor) even above whether carriers offer the right geographical coverage (37%), a carrier’s loss or damage rate (28%) and the basic price or contract terms offered by a carrier.

The importance of knowing where shipments are in the supply chain was a key theme highlighted within the Triangle report. Looking at the provision of returns, for example, the study suggested that merchants were more concerned about getting good data about items coming back than the speed of delivery.

The comprehensive 130-page Triangle report brings in views from carriers, intermediaries and payment companies as well as online merchants themselves, to examine the crucial issues facing the important cross-border ecommerce market.

The study comes while European Commission officials assess the cross-border ecommerce market within the EU, holding out the prospect that new measures could be developed to help open up a truly single market in European Union ecommerce.

“Challenges”

Neil Jackson, the chief executive of Triangle Management Services, publisher of Post&Parcel, said: “It has become increasingly clear that consumer choice when shopping online is no longer restricted by national boundaries. Cross-border business to consumer sales are already close to $5bn for US merchants and $2bn for UK retailers, and is predicted to grow at three-figure rates over the next few years.

“But our research shows that some big challenges remain, which keeps consumers away and tempers the ambitions of online retailers to look at the potential of export markets,” added Jackson.

The new Triangle report looks at the entire cross-border supply chain, warning that to date, strategies have been largely reactive and short-term.

It shows how companies that have a serious cross-border ecommerce strategy can move beyond the confines of traditional thinking and fully understand the booming consumer online transaction space.

“The winners in this market will be those merchants that offer consumers a seamless experience, with easy access to the products they want, no surprise costs after the purchase and delivery within a reasonable time-frame,” said Jackson.

“The Triangle Cross-Border Ecommerce report gives merchants and their carriers a clear roadmap on how to develop their service so that every aspect is under control, every issue considered in what can otherwise prove a highly complex business that can damage brands and reputations for those who do not have the right approach to this market.”

For more information on the Triangle Cross-Border Ecommerce report, call Triangle research manager Helen Daniels on +44 (0) 1628 642910.