All signs point to the continuation of recent cross-border e-commerce trends as consumers are now accustomed to the convenience and added options it provides. Today, it is imperative brands consider implementing cross-border e-commerce into their operations to meet demand. First, it is critical retailers know the top factors they should take into account before beginning international shipping to ensure a smooth operation.
Strike Proper Balance Between Cost and Speed
International customers want a premium service, meaning fast delivery, at an affordable rate. In fact, 25% of international customers cited a long delivery time as the top issue related to cross-border e-commerce. While consumers are accustomed to delivery times within one to two days domestically, today a competitive speed for international delivery is within four to six days.
International shoppers expect fast transit times, and e-commerce brands can leverage shipping partners to manage costs to strike the proper balance between price and speed. As our industry continues to experience supply chain challenges as a result of the COVID-19 pandemic, it is more important than ever to create transparency throughout the shipping process to ensure a satisfactory experience. Reliable carriers can ensure transparency at each stage of the delivery journey with on-time shipments to foster long-term customer loyalty.
For e-commerce brands beginning the process of shipping internationally, keep in mind costs can be balanced with today’s demands for fast delivery in a tight market as long as they partner with the right international carrier. Brands should look out for carriers with parcel and e-commerce expertise, insight into the global customs clearance process and the latest integrated technology.
Implement VAT and Duty at the Shopping Cart Level
The brand experience for e-commerce shoppers begins long before the product is delivered to their doorstep. A seamless online shopping experience can make or break their experience with the product before it even arrives. International e-commerce customers expect cost transparency upfront that includes charges for tax, duties and other compliance measures that are added when products cross the border. If not, e-commerce brands can expect a key hurdle with selling internationally — cart abandonment. A top reason for cart abandonment includes hidden costs like taxes, duties, and other fees.
By calculating value-added tax (VAT) and duties upfront in your e-commerce checkout interface, retailers can reduce cart abandonment and shopper dissatisfaction. The benefits of doing so can be remarkable, with an estimated $260 billion worth of lost orders identified as being recoverable simply through a better checkout design and process flow.
Additionally, a key factor to consider is leveraging the Delivery Duty Paid (DDP) parcel shipment method at the shopping cart level. DDP requires e-commerce brands to pay relevant VAT and duties upfront. This allows the brand to calculate the total landed cost of the item in the international customer’s online shopping cart, which provides transparent pricing. By contrast, Delivery Duty Unpaid (DDU) is used when the e-commerce brand does not pay the VAT and duties and instead requires the customer to pay those fees when the shipment arrives. DDP is a top strategy for lowering cart abandonment, creating a more transparent buying experience and a favorable solution to comply with recent EU VAT changes.
Leverage New Technology to Streamline Operations and Create Transparency
Incorporating new technology into international e-commerce operations is increasingly vital from both the brand and customer perspective. From the e-commerce retailer perspective, automation can expedite the compliance process by leveraging technology with natural language processing and machine learning. Smarter systems mean e-commerce brands can speed up once time-intensive processes like classifying SKUs. In the past, companies had to classify each SKU in their product library for each country they were selling in. Today, new technology allows brands to select the specific SKUs they are exporting to a certain country resulting in massive time savings. Thanks to evolving technology, shifting operations to a digital platform is a seamless process that can be completed in less than a week.
It is also increasingly important to incorporate visibility technology into the shipping process to ensure transparency for both international e-shoppers and e-commerce brands. Sophisticated visibility technology includes validating end-customer addresses, navigating customs hurdles, managing transit tracking to provide real-time updates and ensuring delivery in a timely manner. Visibility platforms can provide a 360-degree view of data across multiple facets of the supply chain. Historically in the supply chain industry, companies have utilized different platforms to view inventory, access shipment data and track resources across multiple distribution centers, which created a disconnect in information flow and led to decreased productivity. Today, new technology can bring the data together in a single view to enable more intelligent decision making, smarter use of resources and, ultimately, a more efficient and productive supply chain.
With no end in sight for current cross-border e-commerce trends, it is vital brands today consider international shipping to remain competitive. By working with a trusted carrier who can help balance fast shipments with low shipping fees, communicate accurate total landed costs upfront, and leverage the latest technology, brands will be best equipped to successfully begin internationally shipping.
Manoj Pankaj is the Vice President of Cross-border e-commerce | B2C Shipping at GEODIS in Americas. Pankaj is a product owner on the GEODIS MyParcel team, which is GEODIS’ small parcel shipping service that currently ships to 27 European countries, Great Britain and Canada. For more information, please contact marketing.americas@geodis.com.
