How can you improve your trading with those across international borders? Raj Subramaniam, Executive Vice President, Global Strategy and Marketing, FedEx, gives his six top tips for budding entrepreneurs and SMEs.
Online commerce currently represents over $1 trillion in sales per year and is forecast to nearly double in the next four years, according to Forrester research data. Consumers now have increased awareness of new e-shopping destinations – and are armed with multiple devices and payment methods to acquire unique products or cheaper deals not available in their own markets.
In 2015 UK businesses must tailor their online offerings to multiple consumer preferences – a ‘one size fits all’ approach will result in bust rather than boom. Based on the latest findings from “Seizing The Cross-Border Opportunity,” – a FedEx commissioned study conducted by Forrester Consulting which surveyed over 9,000 global online shoppers and 34 SMEs with cross-border eCommerce operations – the UK is one of the top three exporters of online purchases. To help your business take advantage of this opportunity, here are six tips from the study to enhance mission success when it comes to online cross-border trade.
1. Stand out from the crowd
SMEs are in a special position to provide hard-to-find products and personalised service – but they must differentiate themselves by highlighting the uniqueness of the items they offer. Shoppers are influenced by a variety of factors when making cross-border purchases, but the most influential reason cited in the report is that the item is not available in their home country, with 75% of respondents considering this ‘very influential’ or ‘influential’.
2. Time to go to market?
The majority of respondents in every country surveyed ranked major multi-brand online retailers or marketplaces as their first choice out of five business types for cross-border purchases. Independent SME retailers (i.e. those not affiliated with an online marketplace) ranked fourth, behind brand or manufacturer websites and brick-and-mortar retailers. The benefits of listing your products on an online market include global reach, language localisation, and active marketing in-country through search engine optimisation (SEO) and search engine marketing (SEM). Additionally, and very importantly, these marketplaces have reputation systems and often” buyer protection to build trust with shoppers.
3. Leverage logistics expertise
Many of the successful merchants interviewed work closely with at least one major logistics company. Such providers can provide global coverage, delivery speed/consistency, and competitive cost. What really distinguishes the preferred providers, though, is the service and support in calculating taxes and duties, filling out paperwork, allowing a merchant to bill upfront for duties, and simplifying cross-border returns.
4. Crunch those numbers!
Study your current international traffic and business. A large number of merchants interviewed started their cross-border business unintentionally, as international customers found them through easily accessible methods such as web search and online ads. Mine the traffic coming to your website to understand the natural demand for your goods and inform future priorities.
5. Target success
Decide whether to go broad or narrow. Are you going to try to serve many markets, or focus on a few? Does your merchandise have broad appeal or is it more attractive to certain countries? Are there logistics considerations that would make certain markets more difficult to serve or, for instance, process returns? If you are focusing on a few markets, consider whether it’s worth investing more in services such as website translations, web advertising, and broader payment offerings.
Identify the right resources based on your strategy and future needs. Think about services and offerings that will make a difference to the customers you want to reach. For instance, if you want to sell to China, you’ll need to consider a marketplace with penetration in that specific market. Similarly, if you want to be able to offer return services to your customers, you will need a logistics provider that can handle international returns smoothly and efficiently. Whether your customers find retailers through word of mouth, search engines, or ads, the best results will no doubt come from having a reliable logistics provider with global network expertise that excels in helping businesses go global from Day One.