Unlock Your Global Customer Base

Alex Mathers, associate partner at OC&C Strategy Consultants, discusses key hurdles every retailer needs to overcome to unlock a further 60 per cent of their potential global customer base

Alex MathersToday, a third of people don’t see any major barriers to buying online from outside their own country. So it’s no surprise that eCommerce and the rise of mobile shopping is fundamentally changing the way retailers do business, opening the doors to whole new worlds of consumers in just a few clicks.

Recent research by OC&C, Google and PayPal found that eCommerce in the world’s four largest markets – the UK, the US, China and Germany – will have doubled in size to £640bn by 2018. What’s more, the UK is in a strong position to benefit – Britain is the most popular online overseas destination for German shoppers, and the second most popular shopping destination for consumers from China and the US. Many UK retailers, both pureplay and multichannel, and of varying shapes and sizes, are succeeding outside our home market.

However, although many British retailers are reaping the rewards, many others could do more to capitalise on the true size of the opportunity eCommerce can offer. So what steps to retailers need to take to unlock the true potential of their overseas customer base?

Lead the Growth of Mobile
Mobile shopping is growing fast in Germany, the US and particularly in China where two thirds of consumers now say they shop on their mobile devices. And with nearly 40 per cent of online shopping purchases in the UK taking place on mobiles, UK shoppers are at the vanguard of a trend that is sweeping the globe. This means that UK retailers are uniquely experienced and positioned to exploit the international growth in mobile retail.

Capturing shoppers via their mobiles relies on a tailored eCommerce offering – a mobile-responsive website or mobile-friendly payment system could now mean the difference between international customers choosing a British retailer over a local competitor.

Build Trust With Consumers in What Matters to Them
Our research revealed that concerns around the security of personal or financial details and product authenticity are the main barriers holding shoppers back from buying goods overseas.

The key is to understand the specific anxieties of customers in each market, how they differ, and what would make them choose a specific retailer over a local player. For example, our research showed that German customers are particularly wary of retailers who don’t offer great value for money – much more so than their US and Chinese counterparts; while in China, instilling trust in quality and genuine, authentic products is key to attracting customers and driving purchases.

Gathering and acting on insights such as these will help retailers decide which aspect of their proposition they should modify or invest more in.

Price Smart for Currency Movements
Currency remains an influencing factor for cross-border shoppers, especially in recent times for Chinese and Australian shoppers. There are many different ways of tackling this issue, with trade-offs to be made between clarity to consumers and operational complexity. Selfridges for example, offers delivery to over 60 countries, with prices entirely in British Pounds, simplifying price management and removing risk from currency fluctuation.

Conversely, online specialist iHerb offers 35 different currencies with prices floating with exchange rates – enabling customers to see the exact price they will pay when they see a product. Different again is the model adopted by Topshop, which has local prices in each currency – enabling it to benefit from a more premium positioning in the US.

Although there are different solutions which will be better suited to a specific retailer, the direction of travel is towards pricing in local currencies, with many players choosing to be more dynamic about managing currency movements to ensure their customers can shop in a currency that’s familiar to them.

Break Logistics Barriers
Naturally, many consumers worry that buying from a retailer based overseas will result in a serious headache should products need to be returned. Many retailers have focused on offering speedy delivery beyond their home market, but a clear, simple and low-cost returns offer is also a key part of removing barriers to cross-border purchasing. ASOS stands out in this area, focusing on being completely accessible anywhere in the world by partnering with local courier services to provide shoppers wherever they are with hassle-free returns.

In conclusion, for many UK retailers, success to date has come from skimming a large number of markets through international shipping and payment solutions, however the next wave of growth will require them to move from this ‘go broad strategy to one which enables them to go deep and become locally relevant in the worlds largest and fastest growing eCommerce markets. Our research estimates that companies tailoring their proposition further by addressing the barriers above around mobile, trust, pricing and logistics could unlock a further 60 per cent of potential customers who are currently holding back. Although care is advised, the multi-billion dollar incentive should be significant enough to convince even the most cautious of retailers.