International Trade

Cracking the US ecommerce market as a British retailer

7 min read

30 January 2017

As Britain’s ecommerce market matures, many savvy retailers are looking internationally to drive sales and growth this year – and the US ecommerce market is on the radar.

A survey of British retail decision makers that we commissioned recently, revealed that over half (59 per cent) consider the US ecommerce market to be the most important outside the UK. Indeed, the US ecommerce market is the single most attractive overseas market for UK retailers right now.

There are many reasons for this. Firstly, the growing US ecommerce market represents a significant opportunity for UK retailers to boost sales.

Forrester predicts that online sales in the US will reach $523bn by the end of the decade, while research suggests that more than 30 per cent of the online shoppers from the United States have made at least one purchase online from retailers based overseas.

Secondly, changes made to US regulations last year have made it considerably cheaper, and in most cases tax-free, for US shoppers to purchase from foreign merchants online.

The introduction of significantly higher duty thresholds in March 2016 made it cheaper for US consumers to buy items up to $800 in value from retailers outside the US, has prompted shoppers to look overseas.

Coupled with the weaker pound following the Brexit vote, and with the high affinity for British brands, UK retailers are well positioned to boost sales to the US.

Clearly there is lots of opportunity for UK retailers to come up trumps by targeting US shoppers online, however our research suggests that there is room for improvement in terms of the quality of the shopping experience being offered to US consumers at present.

Our research findings found that almost half (48 per cent) of retailers that are targeting or planning to target US shoppers are doing so with their existing UK website offering – without any localisation. Furthermore, only 35 per cent are currently targeting, or plan to target US shoppers through a dedicated US offering.

Retailers must give thought to their expansion tactics, and specifically address the challenge of targeting this unique market, including the local competition offerings.

To harness the online opportunity and increase revenue, retailers need to consider how they can improve the online shopping experience for US customers.

Retailers can do this by offering local payment methods, a wider choice of delivery options and local returns, and more transparent pricing, with full delivery costs and tax included. In doing so, they are likely to see an increase in international sales and much more favourable conversion rates.

To crack the US ecommerce market in 2017, there five key things you must consider on the next page.

(1) Meet the high expectations of US consumers

The first rule of international retailing is, in order to be successful, customers should be able to enjoy a consistent online experience, regardless of where they are in the world. They should have the same shopping experience they would expect from domestic retailers.

British retailers must offer US customers the same, high quality experience that they provide to their UK customers, tailoring the offering where needed to meet the high expectation of a US shopper.

(2) List product prices in the US dollar

According to our data, 99 per cent of US customers prefer to pay in US dollars. It is therefore vital that retailers make shopping on their website as easy as possible by converting prices into the local currency.

In addition, it’s also worth adding additional payment methods like PayPal and American Express, which are widely used by American shoppers.

(3) Offer multiple shipping options at competitive rates

To give US shoppers that added incentive to buy, retailers must offer greater choice and competitive prices. This is especially important in the US, where most retailers offer a range of economy, express and free shipping options. Retailers should ensure that they have the logistics in place to meet the needs of their digital customers.

(4) Offer a transparent and local returns option

An easy returns policy is part of the buying decision for over 60 per cent of US shoppers buying cross-border, and an efficient returns process will be crucial to develop brand reputation in the competitive US ecommerce market.

It is therefore essential to have a straightforward and transparent returns policy in place, so if something goes wrong, shoppers are reassured that they can easily return items to a local US address.

(5) Remove hidden import duties costs

US shoppers will not be comfortable paying import duties or shipping handling fees. To avoid this becoming a stumbling block, retailers should keep pricing simple by factoring the import duties, taxes and fees into the product price.Customers will appreciate that there are no nasty surprises at checkout, creating greater trust and better brand perception.

British retailers cannot afford to ignore the cross-border ecommerce opportunity. It is clear that improving the customer experience and catering to a more discerning shopper on a local level is the key for British retailers targeting US consumers.

However, delivering a localised shopping experience does not have to require huge investment into a dedicated US website, or lengthy negotiations with the local supply chain.

Instead, a specialist global partner can provide this seamless international experience and offer American customers the level of service that is necessary in the competitive US ecommerce market.

Nir Debbi is CMO and co-founder at Global-e

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