A survey of 250 British retail decision-makers released today by Global-e, the cross-border e-commerce specialist, reveals that the majority (59%) of British retailers consider the US to be the most important retail e-commerce market. However, less than half (44%) of UK retailers currently sell to shoppers in the US and relatively few have plans to do so in the future. Just 13% of British retailers are currently planning to start selling to shoppers in the US.
The US is one of the largest and most sophisticated e-commerce markets in the world. Online sales reached $341.7 billion in 2015 – a 14.6% increase on 2014’s $298.3 billion – and this growth is only set to continue over the next three years. By 2019, the North American e-commerce market will soar by 59% to $579.9 billion, making it bigger than the e-commerce markets of Europe, the Middle East and Africa combined, and second only to Asia Pacific in global rankings.
The US has become all the more attractive to overseas retailers since a new bill was introduced earlier this year to raise the level at which import taxes are applied from $200 to $800. It is now considerably cheaper, and in most cases tax-free, for US shoppers to purchase from foreign merchants online. Coupled with the pound at an all-time low in the wake Brexit and the dollar performing so well against other currencies, now is the optimum time for British retailers to target US consumers.
The Global-e study has found that British retailers appreciate the US opportunity – of all British retailers that are either targeting or intend to target US shoppers, over half (51%) are motivated by the opportunity to grow sales for their business. Worryingly, however, almost half (48%) of the retailers that are targeting or planning to target US shoppers, are doing so with their existing UK offering with no localisation whatsoever. It’s no surprise, then, that retailers who have launched e-commerce activity in the US have faced difficulties in doing so. For instance, two fifths of retailers pointed to shipping and customs issues as a difficulty (42%). Over a quarter of UK retailers experienced in catering to the US market said that they had faced difficulty with laws and regulation complexity (state vs federal) when selling to US shoppers (28%). Retailers also point to vary shipping options (49%), taxes and duties calculated in final price (39%), local returns (32%) and local currency (28%) as improvements to their US site they would like to address.
Nir Debbi, CMO and co-founder of Global-e, said: “Now is an opportune time for British retailers to do business in the United States. US consumers’ appetite for cross-border shopping is growing rapidly. Following the new rules, they can now buy more for the same price from abroad which is great news for foreign retailers selling into the US. Particularly for British retailers, where post-Brexit shock has caused the American dollar to surge against the British pound.”
As online shopping becomes quicker, safer and more convenient than ever before, North America’s growing e-commerce market represents a significant opportunity for trusted international retailers to boost sales. Indeed, American consumers are increasingly shopping across borders, with over half (54%) of frequent online shoppers have bought at least one item online from a retailer based outside of the United States according to research conducted by Comscore.
Although there is no language barrier to contend with, US shoppers often feel unconfident about making a purchase if the online store doesn’t offer prices in US dollars, provide local returns, multiple shipping options at attractive rates, and guarantee no additional taxes or costs upon delivery. According to Global-e’s data, 99% of US customers prefer to pay in US dollars, when given the option by a foreign retailer and conversion rates are increasing to over 90% with a localised offering.
“Retailers should take into consideration the local competition and remove major barriers in order to realise the full potential of the US e-commerce market.Most retailers fail to offer overseas customers their local payment methods, localised pricing or multiple shipping options at attractive rates and local return options – which impacts conversions abroad. Retailers must streamline the customer experience by providing localisation, this needn’t mean building a standalone website from the outset or negotiating deals in every market. Retailers can achieve this high standard without investing heavy time and money into the process by working with specialist partners to achieve the personalisation the consumer expects,” said Debbi.
Global-e is the leading European provider of cross-border solutions for e-commerce retailers. The company, headquartered in Farringdon, London, enables retailers to provide a fully localised e-commerce offering to customers in more than 200 destinations worldwide. Global-e is working with a growing number of leading retailers, including Crabtree and Evelyn, Astley Clarke, Illamasqua, Golf Support and Griffin Technology.