As U.S. merchants enter the peak holiday shopping season, many are looking at international sales to drive revenue. From large retailers to small business owners, there is a tremendous opportunity to find new customers with cross-border selling.
To help merchants uncover new selling opportunities, we recently unveiled our third annual
global cross-border commerce report, which polled more than 28,000 consumers from across 32 countries about how and why they shop online. The report revealed three key trends for U.S. merchants:
- Despite concerns stemming from Brexit, U.K. cross-border shopping only dropped slightly vs. 2015 (33 percent of U.K. online shoppers claimed they had shopped cross-border in 2016, vs 36 percent in 2015). The U.S. is the largest beneficiary, with an estimated $2.2 billion in cross-border shopping being spent in America by British shoppers in 2016.
- China represents a tremendous opportunity for U.S. merchants, as it is estimated that more than 11 billion will be spent on goods from U.S. merchants by Chinese customers in 2016.
- Eastern European consumers are less likely to prefer large ‘global’ stores when purchasing from other countries than other regions, representing a unique opportunity for small merchants in America.
For merchants looking to increase sales and help grow their business internationally, here are some top tips from the findings:
Transparency is key
Shipping costs, fees and concerns about getting what they have paid for are the main factors deterring consumers from shopping cross-border. It all comes down to merchant transparency: shipping costs, the number one reason cited in the study as a barrier to shopping cross-border, should be affordable and easy to find on a merchant’s site. Customers also don’t want to have to go through the entire checkout process to see that customs, duties and taxes are not calculated in the final price. To turn a transactional shopper into a long term customer, merchants need to put customers at ease with this information upfront.
What motivates cross-border shoppers
Cross-border shoppers are looking for a good deal. Seventy-six percent of cross-border shoppers polled cited better prices as a reason for shopping on websites from another country. Gaining access to items not available in their own country also ranked high (65 percent) as a motivator for shopping internationally.
The reasons change, however, when it comes to the factors that would make online shoppers more likely to buy from a website in another country. Free shipping (selected by 46 percent of global online shoppers) and a secure way to pay (44 percent) are the top factors that could drive more cross-border shopping. The distinction between these insights is important for merchants – to retain a current cross-border shopper, better pricing is key. But to motivate a shopper who may have never shopped cross-border before, free shipping and a secure way to pay are paramount in converting them.
Understanding U.S. cross-border shoppers
Beyond having an opportunity to increase their own cross-border transactions, U.S. merchants have a chance to retain more domestic customers by understanding the nuances of this marketplace. For instance, toys and hobbies as well as jewelry/watches were the second and fourth ranked categories for U.S shoppers to buy from other countries, but did not make the top five for overall online shopping (i.e. shopping domestically in the U.S. or abroad). This showcases a great opportunity for U.S. merchants selling these product categories to gain and keep new domestic customers with better pricing and product offerings.
In the U.S. PayPal was the most commonly used payment method in the past year, both for domestic and cross-border transactions, with 64 percent of American domestic online shoppers surveyed having used PayPal for domestic purchases and 52 percent of cross-border online shoppers having used PayPal for cross-border purchases. U.S. respondents who preferred PayPal for both U.S. domestic and cross-border shopper payment methods rated higher for factors influencing payment choice, including key parameters such as security, convenience, and trust.
Seize the opportunity
Understanding how consumers are engaging with your brand, what they are looking for, as well as how their country of origin affects their path to purchase, will enable merchants to customize the shopping experience for each consumer. This approach will lead to greater cross-border customer acquisition and retention. The full report, including technical details about the survey, can be accessed
here. For more tips on selling internationally, visit
PayPal PassPort.
There’s a world of customers… go find them!