Climb every mountain
Sarah Ward, Pitney Bowes’ Director for Global Business Development, considers how businesses can break through Ecommerce barriers to deliver a seamless customer experience. You would be forgiven if you hadn’t heard of the late Michael Aldrich, but his impact on our lives has been huge. Aldrich was a British IT expert who, by connecting a modified domestic television with a phone line, invented online shopping in 1979. To him at the time, he admitted, it felt like science fiction. To us now, it’s our chosen way to shop. Global Ecommerce sales reached $1.3 trillion in 2014, with 1 billion digitally-connected buyers purchasing physical goods online1. Ecommerce is booming, and is showing no sign of abating. All regions are showing a keen propensity to buy online. In fact, nearly 80% of Latin Americans shop online2, according to research.
There are a few key drivers behind the popularity of Ecommerce, including:
- Mobile Device take-up: we really can shop anywhere, at any time. In fact, in we’ve gone full circle because – as well as desktops, laptops, tablets and smartphones being used for online shopping – many of us have Internet-connected smart TVs, demonstrating Aldrich’s uncanny foresight.
- Increased internet access, speeds and skills: in 1995, less than 1% of the world had Internet access. Now, over 3 billion people, or 40% of the world’s population, has an internet connection3, and the skills to use it
- The global recession: times of austerity have driven consumers away from the physical to the digital, as shoppers shun the high street for the Internet, where many feel they’ll get better value and greater discounts
- A huge choice of online products and services available online: if people will buy it, you can sell it. The most unusual online purchases –available to online shoppers today! – include someone to queue on your behalf, and 1500 live ladybirds to keep bugs at bay
- Improved shipping capabilities: physical and digital technologies are converging to drive precise and accurate shipping
Online retailers are in an unprecedented position to take advantage of this opportunity, with a global market at their fingertips, and a storefront reaching billions of shoppers. Their optimism, drive and ambition reflects this: 64% of retailers in a recent survey plan to expand their capabilities, and 41% plan to launch capabilities to consumers outside their own country4. But how many are trading overseas in reality? But is it really a borderless world? And if not, how can businesses overcome the barriers to success?
The global ripple-effect and cross-cultural influence of the Internet is fascinating. Black Friday in the US? That sounds like fun – let’s introduce it in the UK! So they did, and online spending was up 37.5% year-on-year on just one day. Alibaba’s Singles Day in 2014 smashed previous records, with takings of $9 billion5 from Chinese and overseas buyers.
There’s no question that we’re in the age of the consumer. Unlike the regularly-tipping scales of the housing market (“It’s a buyer’s market!”;”It’s a seller’s market!”), consumers have never known it to be anything other than the age of the seller. Unless you were buying fruit in a European street market, or haggling for textiles in a Moroccan souk, the price was set – and the power was held – by the retailer. Consumers paid it, or moved their custom elsewhere. Across the globe, customers are in control, researching, reviewing, sharing, posting, influencing and shopping for the goods they want. Global customers expect the same experience as domestic buyers. Businesses that can meet these expectations can reap the rewards. But this places great pressure on business to respond, and those who cannot do so risk jeopardising their business. Even Ecommerce giant Amazon, despite seeing revenues of £56 billion in 2014, had losses of £153 million to contend with.
For digital consumers, the world is borderless. They expect to be able to view product information in their own language, and to pay for products in their own currency. They want:
- A choice of local and international shipping options with delivery times and costs clearly outlined at checkout
- An advanced level of service and shipping options for high cost items
- A selection of collection options as well as shipping options: click-and-collect, drop box
- Transparent shipping costs, taxes and surcharges – displayed in local currency
- A wide choice of fast and easy payment methods – both globally accepted, but also ‘locally’ preferred ways to transact
- An end-to-end view of the product’s journey through track and trace wherever possible
- Notification, in the channel of their choice (SMS, email), at milestones in the product journey – dispatch, for example, and when the product has arrived at the local courier’s depot
- A customer service department they can speak to in their own language, with access to precise, accurate data on the location of their order
- Swift, simple returns, ideally with pre-printed returns labels
For Ecommerce businesses, however, cross-border shipping can be complex, and there are some barriers in place that seem insurmountable. They need to understand the market, and any global regulations they must comply with. They have to be able to offer different currencies, and be fully up-to-speed with duties and taxes. They may be impacted by fraud, or undeliverable packages without the correct address data, or with data structured in the right format for efficient delivery. They may be guessing at shipping costs and losing money, or having to absorb the costs from packages retained by Customs, or refused by buyers who were not expecting additional taxes or levies. Returns can be complex, and having to provide local-language customer service representatives is costly.
This complexity can become overwhelming, and some Ecommerce businesses are beginning to stop serving global markets entirely as it becomes too expensive for them to continue. In the US, less than 5% of small businesses are exporting. If it continues, this complexity will inhibit small business growth, and it will have a knock-on effect on local economies, too – not such an issue for developed countries but for the developing regions which have red tape and other barriers to trade, this is significant.
To remove these barriers to growth and help businesses grasp the opportunities presented by the global Ecommerce marketplace, organisations need the following:
- Robust, accurate platforms, systems, technology and processes in place to remove guesswork, improve accuracy and boost the customer experience through accurate fully landed shipping costs
- Improved shipping and parcel collection points
- The ability to offer online payment methods whether credit card, PayPal or other “local” ways to settle an online transaction
- The ability to provide a ‘track and trace’ service to customers
- Access to intelligent data tools which ensure data quality, minimising the possibility of undeliverable items
- A pool of on-the-ground partners to help with language capabilities as and when necessary
Global online marketplaces such as eBay provide businesses with a low-risk introduction to global commerce. And it works: in fact, a report6 from eBay found that 90% of its small and medium-sized businesses used its platform to export in 2014.
Trade barriers are crumbling and a global market has opened up, but businesses need to arm themselves with the right technology to make the most of this unprecedented opportunity. Only then will Ecommerce reach its full potential in a borderless world, and only then will the empowered online consumer receive a truly seamless experience – which can often translate into repeat customers and one of the best marketing tools on the planet…..word of mouth.
Case Study: PlanetShoes
PlanetShoes is an online retailer offering unique, distinctive brands that cannot be found anywhere else. The business was finding that its international customers were not receiving the streamlined experience it had hoped for them. Orders were being refused when they arrived at their destination because customers were not aware of the in-country customs charges. There was also a lengthy internal process in place to ship the package internationally, resulting in deliveries taking longer than expected. The businesses adopted global shipping technology which enabled the visibility of duties and charges upfront, so there are no hidden surprises when the package arrives at the customer’s door. Overseas customers have clear visibility of their order and its costs, and delivery time has been reduced.
1 Source: eMarketer.com
2 Source: Research by ESET Latin America published in Latin Link
3 Source: Internetlivestats.com
4 Research by Pitney Bowes, 2014
5 Source: Reuters UK
6 Source: Ebay’s 2015 small business growth report