There’s been an explosion of businesses interested in expanding their online sales outside of their domestic markets, and the pandemic has played an important role in this shift.
In the wake of extended border shutdowns and the closure of brick-and-mortar channels, consumers turned to other geographies for their goods and services, and companies had no choice but to adapt.
“Everyone’s [including B2B and B2C sellers] go-to market strategy was disrupted by COVID, and because of that, all of those businesses began looking for other ways to get to market,” Digital River CEO Adam Coyle told PYMNTS in an interview. “What they found was the universal one, the one that always works: online.”
The U.S.-based company offers a single integrated solution for the back end of global eCommerce, providing brands looking to sell globally online with the capabilities and services they need to make that process as seamless as possible.
Coyle said Digital River has seen interest spike in recent months from businesses like consumer-packaged goods (CPG) companies, which relied exclusively on retail channels before the pandemic and would have never considered selling in a direct model.
Those companies are now putting a big focus behind selling directly to consumers online for convenience and out of necessity as they come to accept that consumers will look for products in places that “they’re comfortable looking for them and increasingly, that’s online,” he said.
As Coyle said, “It’s a really dynamic time to be in this business, helping businesses sell more online and particularly sell across borders.”
Regional Differences in Cross-Border eCommerce
Consumers might think their buying experience is somewhat universal, but Coyle said, depending on the region, customers have different expectations about how payments, fulfillment and delivery are supposed to work, as well as how fast money should be refunded when a product is returned.
“In many cases, [there are] regions in the world where banks are very trusted and [others] where banks are not,” he added as another difference in consumers’ attitudes.
He said all these nuances are tied to cultural differences, which companies involved in cross-border eCommerce must consider in order to avoid the risk of alienating new customers in a new country or region.
Europe is a good example of this given the “tremendous variance” in customer expectations across the different countries, Coyle said. For example, France and the U.K. have a more active credit culture when it comes to credit, whereas cash-centric German consumers will mostly stick to cash for their payments.
“In the United States, returns are [taken] to a UPS Store [or put] in the mail,” he added, “but in parts of Europe, the expectation is that if you return something, the merchant comes to your house and picks it up.”
He reiterated the need to work with partners specializing in cross-border commerce and understand the patterns that exist in different countries, regions and cultures to help navigate these regional complexities.
Localization is Personalization
This month, PYMNTS and Digital River partnered on a report called The Merchants’ Guide To Cross-Border Commerce, which examines the websites of retail merchants across six industries for a firsthand account of how quickly and easily international eCommerce shoppers can make cross-border purchases.
Read the report: The Merchant’s Guide To Cross-Border Commerce
The study revealed that 76% of merchants, up 11% from 2016, are using tools like IP recognition technology to localize the customer experience and sync languages, currencies and payment methods to their customers’ geographic locations.
Coyle said the rise of global logistics has contributed to this growth and “the fact that the experience that we’ve all become accustomed to domestically in the United States with Amazon, for example, can now be recreated around the world.”
In addition, it has become a lot easier for merchants in one country to accept the local payment methods in another, and consumers are getting used to making cross-border purchases outside their home geographies given the choice and flexibility they present.
The PYMNTS study also revealed that 100% of the top-performing participating merchants offer at least one interface personalization feature, highlighting consumers’ desire for a personalized experience that caters to their own shopping needs and preferences.
Coyle said that finding is enough to show that the future is not only in personalization but also in localization, whereby a consumer in Romania can have access to the payment type and delivery option that they’re comfortable with, all presented in a language familiar to them.
“All of those things which we generally love in the category of localization are really about personalization, [and] I think that is something we’re going to see more and more of as brands begin to grow this cross-border channel [and] realize it’s a great source of new customers and new sales,” he said.
However, not all merchants have caught on to the trend, and Coyle said it boils down to fear of the unknown and concerns around the complexity of selling across borders.
But there’s no good reason for businesses that want to sell across borders to have that concern anymore, he said, given the growing number of vendors and providers in the space equipped to help make processes easier.
He said clients who have managed to overcome that fear find that it is less costly to implement and less risky to sell across borders, and the gains are greater than they ever expected.
“Success breeds success, and as they see other players in their market begin to be successful in cross-border, all the ones who waited on the sidelines begin to jump into the game,” he said.
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