The Largest 2020 Ecommerce Driver is Global Expansion
Ecommerce is now a staple in everyday life, so much so that Americans spent $154.5 billion online in the third quarter of 2019, according to a US Census estimate. Unfortunately, the COVID-19 pandemic has forced business for the near future to be almost completely online.
While this transition will take some getting used to, it also affords the opportunity to reach across conventional borders. We’ve moved beyond the novelty of being able to buy something online and receive it quickly. As we look to what the next 25 years have in store, continued success in the ecommerce world depends on superior customer experience — meeting customers where they are and when they need it most.
Businesses That Know No Borders
Ecommerce has virtually dissolved borders, enabling a consumer from one corner of the world to purchase goods and services from a seller thousands of miles away. Access to a wider customer base means brands that go global can see huge gains in growth. Research shows by 2023, global ecommerce is set to increase by 53%, worth an estimated $5.9 trillion. As the ability to send payments electronically becomes faster and cheaper, doing business globally has become table stakes.
Sounds easy, but going global comes with risk according to the International Trade News. Successfully expanding into new countries doesn’t mean just selling products in a new location. Retailers need to think local. That means becoming an expert in local customs, navigating a complex ecosystem of vendor contracts, fulfillment, as well as establishing local banking relationships, understanding preferred payment methods, maintaining compliance with local laws and regulations, taxes, fraud and more. Getting it right can take years of work, and it’s a huge investment without the right partners.
What’s more, consumers are becoming increasingly mindful of who is accessing, collecting, receiving, storing, and otherwise processing their personal data. Regulations like the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) are effectively changing the way business is conducted around the world, adding a layer of complexity for merchants with global storefronts.
Merchants can build a local experience right into their infrastructure, regardless of where the seller is based. One key to that is establishing relationships with local banks to avoid cross-border transactions. The largest brands might have the bandwidth to tackle that project in house, but even so, it’s a costly undertaking, both in time and money. There’s a greater likelihood of success partnering with a vendor that has the infrastructure and regional insight to manage payments and compliance properly in the countries in which merchants wish to do business.
The Mobile Movement
For brands looking to remain innovative, mobile commerce and personalization must be top of mind. While the importance of delivering a positive, consistent customer experience isn’t a new idea, it is something that brands still struggle with given the plethora of devices and channels that customers are using to shop. Consumers might be online, in a physical store, or both, so creating an experience that prioritizes convenience, trust, familiarity and efficiency is key to fostering loyalty.
Brands thinking big need to go small. By 2025, nearly three quarters of Internet users, equivalent to some 3.7 billion people worldwide, will access the web solely via their smartphones. Mobile commerce, or m-commerce, is expected to represent a vast majority of people who prefer experiencing the full spectrum of the buyer’s journey through smaller screens. Retailers who want to win and retain customers need to be agile, innovative, and able to touch consumers at all points within their buying journey, regardless of which channel they prefer.
For brands, the innovation imperative boils down to being customer-centric, and moving quickly within your infrastructure to take advantage of current technology as well as best-of-breed solutions. Between the growth of ecommerce and new digital technologies, one thing is for certain, and that’s the shift toward the omnichannel, mobile-first shopper experience.
Eric Christensen is VP of payments, fraud, and financial services at Digital River.