This article appeared in the Fall 2018 International Issue.
Online shopping has dramatically transformed the retail industry. The days of brick and mortar stores are dwindling, as retailers are emphasizing e-commerce to reach a larger customer base. No longer can retailers solely focus on creating unique shopping experiences for customers across the nation – it is time to think global.
In today’s retail environment, the location of a retailer around the globe makes little to no difference to shoppers. According to PayPal’s 2018 Cross-Border Consumer Research Report, customers are shopping globally due to better prices, access to items not available in their own countries, and to discover new and interesting products. Because of this, it is vital that retailers begin to emphasize international shipping and create shipping strategies that provide great customer experiences across all corners of the globe.
Benefits of International Shipping
While international shipping can be intimidating, the benefits are endless. Not only will expanding shipping capabilities to a global level aid business growth, it can increase company margins by selling in more markets. This new, expanded customer base will also create more demand for products and minimize domestic competition, as few retailers are ready to push their products worldwide.
The starting point for retailers exploring international shipping is typically the United Kingdom, due to its similarities to the United States. The English-speaking market has been exposed – and also responds well – to American advertising, promotional activities, and product aesthetics. The UK market is also ranked number three in the world in overall e-commerce attractiveness, making it one of the best markets to enter and try a new global shipping strategy.
International Shipping Barriers
Not all markets will share such close comparisons as the US and UK. Before entering other global markets, it is important to understand the most common operational barriers retailers experience with global shipping.
- Shipping Costs: Shipping costs are the number one reason for foreign shopping cart abandonment. In PayPal’s report, 25% of respondents said delivery shipping costs are a reason they choose not to order from international retailers.
- Limited Tracking and Fulfillment Concern: Scams are a major deterrent, andcustomers who have fallen victim to such unfortunate incidents become far less comfortable ordering from international retailers. There is also limited tracking information available for global shipments, which is not conducive to a quality customer experience.
- Customs, Duties, Fees, and Taxes: These extra fees have proven problematic for international retail growth. The likelihood of a repeat customer decreases exponentially after international shoppers receive notice that they can’t receive their order until they pay more in fees, which is often the case if you send your shipments as Deliver Duty Unpaid (DDU).
- Slow Delivery Time: Due to Amazon Prime’s popular two-day shipping, today’s customers expect fast delivery. This is an issue as international shipping has been known to take weeks for an order to finally arrive on a customer’s doorstep.
Conquer Cross-Border Shipping
Identifying the common barriers to cross-border shipping is the first step. However, how well a retailer addresses and overcomes these issues will determine the success of its international shipping strategy. To conquer cross-border shipping barriers, retailers need to ask the following questions:
- What is the average time it takes to ship a package cross-border?
- Does our shipping software have international tracking capabilities?
- What is our average cost for shipping a package cross-border?
- What is our strategy for tax and duty collection? Is the customer responsible for paying?
- Are there multiple shipping options available for global customers?
Only once these questions have been answered can a retailer begin to develop and implement a shipping strategy. Like domestic shipping, it is important to offer customers a wide-range of shipping options. Customers want choices, and this is the best way to make both domestic and international customers feel involved in the shipping experience.
Next, it is important to identify which global shipping software will be used and the features it offers. Does this system offer tracking capabilities or insurance? Will it create an accurate custom shipping label for international orders? Can it get orders to international customers within four to seven days? The more capabilities shipping software offers, the more streamlined the global shipping will be. And don’t forget about reverse logistics – especially for international shipments in which orders can return back to the warehouse in a timely and efficient manner.
Shipping is already a complicated and sometimes thankless job for retailers. Customers only remember the bad delivery issues as they expect an easy shipping experience. In order to take your business to the next level and reach and retain an entire world of customers, be sure you have a strong cross-border shipping strategy to meet these expectations. Not only will this improve your domestic shipping methods, but the world will now become your market.
Matt Mullen is Senior Vice President and Managing Director at ProShip, Inc., a Neopost company, and a global provider of logistics software and product solutions, including enterprise-wide, multi-carrier shipping and manifesting software, automated packing solutions, and intelligent parcel lockers. For more information, please visit .