Across the world people found various ways of coping with strict pandemic lockdowns and for the vast majority, they started clicking. They clicked for food, they clicked for clothing, for cleaning supplies. And whether they were brick and mortar loyalists or avid online shoppers, lockdowns and the ongoing digital transformation changed consumption habits drastically. Today, e-commerce is bigger than ever. In the US, sales reached $257.62 billion USD in Q4 2021, up 9.2% compared to the same period in the prior year. With numbers like these, it's no wonder that e-commerce is the fastest-growing channel of the last decade. In fact, in Europe, e-commerce revenue is expected to reach over $569 billion USD in 2025 and the global market is set to expand by $1 trillion USD by 2025.
This boom in activity cuts both ways. On one hand, it creates tremendous growth opportunities for e-tailers ౼ both by reaching US customers but also by going global and reaching new markets abroad. This is especially true for B2C sales as some products can gain a competitive advantage by benefiting from tax and customs duty exemptions. On the flip side, this expansion introduced e-tailers to new challenges, generating the need for new international cross-border e-order logistics solutions.
Why are US e-tailers setting their sights and pinning their dreams across the pond? First of all, cross-border e-commerce offers impressive growth opportunities. For example, in 2019, international sales, which already accounted for 20% of total e-commerce, grew two times faster than overall e-commerce sales (Source: 2020 Global e-Commerce, Transport Intelligence). For these brands, the European market also opens the doors to some of the wealthiest nations and more than 450 million potential customers. On top of that, the European e-commerce market is far less saturated than it is in the US. American brands selling online directly to EU customers can also attract potential customers with the promise of customs duties exemptions, and thus a more attractive overall price.
"Did you know that consumers can avoid customs fees so long as the daily value of approved US products purchased online in EU countries remains under €150."
While there are clear benefits to cross-border and international e-commerce sales, potential challenges could give pause to US e-tailers, causing them to miss out on a significant potential market and growth opportunities.
One key challenge is fully meeting international customer expectations. Many expect a premium delivery service at an affordable price. That means:
If a company can’t make good on these points, they risk losing the sale and face cart abandonment issues as well.
While dealing with customer expectations, companies also face major supply chain and logistical challenges. Many, especially smaller brands that lack the administrative expertise or staff to handle the back end, often turn to marketplaces such as Amazon or eBay to deal with customs, exemptions, warehouse stock and shipping issues. However, the sales commissions of digital and physical middle men can amount to as much as 15% to 20% of the cost of product depending on what you are selling according to Applico. On top of monetary gains, brands that maintain a direct-to-consumer relationship can also retain control of shopper behavior, experience and forecasting, which can positively and exponentially impact their business.
Today, e-tailers that choose to go it on their own are faced with two options: expensive, high-quality delivery service such as DHL, UPS, FEDEX, or inexpensive services with long delivery times and often without tracking. Both solutions are largely DDU (Delivered Duty unpaid) and do not include destination customs clearance.
For brands to sell their product at an attractive price, guarantee an excellent user experience, and avoid missed sales, they need an end-to-end solid international solution.
So, what does it take for an e-tailer to reach new markets abroad and drive down cart abandonment? They need the price-time trade off of a premium DDP (Delivered Duty Paid) service that addresses the myriad of challenges that can slow down e-commerce business growth.
Success in the cross-border e-commerce world means having:
Both e-tailers and e-consumers are looking for a seamless e-commerce delivery experience. GEODIS MyParcel offers just the right balance between speed and cost at a transparent, all-in price. With this integrated solution, e-tailers can expand their business from the US to Europe and Canada at an attractive price, retain control of their marketing mix (including price), streamline internal processes by outsourcing customs compliance and global logistics network management, and above all, deliver a great customer experience.
The B2C cross-border small parcel shipping service guarantees delivery from the USA to 26 European countries in addition to the UK and Canada in 4 to 6 days. In short, it breaks new ground by offering e-commerce brands a simple way to go global with a plug-and-play solution.
Do you have a project to develop your e-commerce sales abroad?