Five Common Challenges – Ecommerce

Businesses around the world are taking their products and services online and selling to global audiences. A DHL study found that cross-border e-commerce is expected to grow at twice the rate of domestic online retail throughout 2020. The benefits of taking your e-commerce business global are many, but selling across borders comes with challenges. Language barriers might be the most obvious issue online retailers struggle with. However, there are plenty of other common challenges that you may not consider before going global. 

Feature Photo by Porapak Apichodilok from Pexels

Here, we explore five of the most common obstacles to cross-border selling. 

Dealing With Local Currencies

Local markets deal in local currencies. Shoppers crave personalization and customization in their retail experiences. Some e-commerce sites display or accept just one type of currency. This forces customers to convert using exchange rates to figure out how much they will actually pay for your product. That burden can easily deter once eager customers. 

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According to recent research, 10% of shoppers who haven’t yet made a cross-border purchase cite the lack of local currency as a primary barrier. So, how do you cater to the locality of your cross-border customers? 

You must provide an online shopping experience in a variety of currencies. Shoppers must be able to browse products in their own currency. This avoids the reality of having to calculate final prices with exchange rates. This will remove any uncertainty or apprehension consumers may have when it comes to placing an order on a website. 

Software platforms are available to help global online retailers create a localized experience. These platforms can accept over a hundred currencies so consumers can see pricing that is familiar to them. Attention to the local currencies of your shoppers will help build their trust in you as a retailer

Managing Taxes And Duties

Navigating each market’s tax and duties requirements takes e-commerce complexity to a new level. There are various pitfalls here. First, shoppers need to see upfront what duties and taxes they can expect to pay.  In some markets, these costs are part of the price. In others, these are broken out and listed on the product page and at checkout.  

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In certain markets, customers prefer to pay these fees as part of the purchase experience.  In other markets, like India, customers prefer to remit payment of taxes upon product arrival. Tailoring the display of taxes and duties to fit customer context is important to creating a domestic shopping experience. 

A next-generation cross-border technology platform can help handle duties and taxes. The right technology will calculate and display accurate details for customers so there is no confusion about the total amount the shopper will have to pay. This feature eliminates surprises and reduces the chance of negative customer experience. 

Navigating Each Market’s Preferred Payment Methods

If you’re in the United States, you’re likely familiar with credit cards like Mastercard, Visa, American Express. As well as digital payment methods or wallets like PayPal, Google Pay, and Apple Pay. Outside the U.S., common payment methods vary and local consumers will prefer to use methods that are available to them domestically. 

If the customer can’t use their preferred payment method on a website, then the chance of completing a sale reduces dramatically. Consumers must sign up with an accepted payment method used by the e-commerce site, or they can’t place their order at all. This results in an abandoned shopping experience.

Additionally, though the customer’s payment method may be accepted, the consumer may be asked to complete additional steps to verify their payment method. Often, this involves redirecting them to another website. Understandably, this process can raise privacy and security concerns for the customer. All of these factors influence customers to abandon their cart. They may choose to go with a local retailer instead. Research has shown that 20% of online shoppers will abandon their shopping carts if their preferred payment method is not readily and easily available to them.

Prepared cross-border retailers leverage a technology platform that allows shoppers to check out using their payment method of choice.  Whether it’s AliPay, Union Pay, or WeChat in China, Boleto Bancario in Brazil, Carte Bancaire in France, or SOFORT in Germany, customers should be able to use whichever method they’re used to.

Better, Faster, Reliable International Shipping

International shipping is known for being slow and expensive. Over half of cross-border shoppers say they are deterred from shopping when shipping is too expensive or delivery is too slow. Customers don’t want to wonder where their orders are or when their products will arrive. 

Shoppers expect to receive their orders in a timely manner and within specific delivery windows. This is particularly true during periods of time when gifting is common. The user experience sours when shipping is slower than anticipated, delivery is unpredictable, and the overall cost is too high. If customers do not receive the package in time for a gifting holiday, it’s likely they won’t order from your website again.

Savvy cross-border retailers offer multiple shipping options for customers that optimize for speed and cost. In some markets where consumers are more tolerant of paying for shipping, brands may decide to offer a flat rate or a threshold for free shipping to offset consumer costs. 

Providing multiple shipping options with clearly communicated delivery windows and tracking capability is necessary for supporting your customers. The right e-commerce platform will help global retailers ship directly to end consumers. This avoids the use of a cross-dock, which wastes time, as well as giving brands the flexibility to offer the right shipping options for each market.

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Making Returns Easy And Simple

Never penalize a customer for making a return. Products purchased through e-commerce sites are up to three times more frequently returned than items purchased in stores. A study found that 41 percent of e-commerce apparel shoppers will purchase multiple sizes and colors with the intention of only keeping the ones that fit—referred to as “bracketing.” Returns will always be an inevitable challenge for global retailers, but the right software can help.

Often referred to as “reverse logistics,” the operation by which a customer returns an item to a business should be smooth, painless, and inexpensive. In fact, 69 percent of online shoppers are deterred from shopping on a particular e-commerce site if they have to pay for return shipping. This is no different for customers when they shop cross-border, which creates additional complexity. However, it is possible to streamline the reverse logistics process for the retailer and provide the customer with a positive experience. 

A cross-border e-commerce platform should enable retailers to give customers access to web-based return shipping labels. Also, by integrating with warehouses and 3PLs, the right software can help the retailer to manage which warehouse location the return should go to for processing. Looking for the right global e-commerce platform can be a challenge in and of itself. However, the benefits to your business far outweigh the complications to cross-border e-commerce without an adequate platform. With the right technology, global retailers can sail past these common challenges and take advantage of the growing cross-border e-commerce market.