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GUEST COMMENT Going global: the key to ecommerce business success in the UK

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Shopping habits have changed dramatically in the past decade. With the advent of new technologies, such as smartphones and social media, new payment systems are continuously joining the consumer retail experience.

It’s becoming increasingly difficult to achieve profitable growth in the current retail landscape, one that is characterised by a significant rise in online shopping. Although consumers continue to shop in-store, the number of customers shopping online is growing daily. The trend we are seeing is a more integrated on and offline retail experience. For businesses that want to take their growth to the next level, they must shift their focus beyond their own borders. The whole world has become the marketplace and retailers must find a way to adapt and evolve their business to continue to engage with digitally empowered, global consumers.

Experts predict that around 85.4% of the UK population shops online and 69% of consumers use credit cards as their primary method of payment. According to an Accenture study on European cross-border e-commerce, UK shoppers are forecasted to spend £52.25 billion online in 2015. In contrast to the UK, many countries throughout Europe such as Belgium and the Netherlands use debit and credit cards much less frequently. For example, 60% of transactions are made with iDEAL in the Netherlands and in Belgium, only 30% pay with Bancontact/Mistercash.

Clearly, the online retail market in the UK is on the rise. To put it in perspective, 74% of all British adults bought goods or services online with almost half of them purchasing clothing in 2014. Whilst consumers continue to do much of their online shopping using laptops and home computers, a growing number of the population are now using mobile devices for online shopping, with a reported 36% of all e-Retail purchases coming from a mobile device in the second quarter of 2014 (IMRG Capgemini e-Retail Quarterly Benchmarking Report).

According to a 2014 study on ecommerce conducted by IMRG (the UK’s industry association for online retail), there was a 16% growth in e-commerce in 2013 bringing annual sales in the UK up to £91bn (excluding travel).

Given these figures and upward trend of e-retailing over the last couple of years, retailers will need to capitalise on the multi-channel opportunity both domestically and internationally if they want to expand their business.

Will it be easier for retailers to operate in a cross-border market? And what kinds of things should businesses consider when adopting a multi-channel strategy?

As retailers begin to grapple with these questions, they will need to tackle both the opportunities and challenges that accompany a new, multichannel cross-border retail landscape – one which we live in right now.

Payment methods mapping

Firstly, retailers will need to engage with payment methods mapping and establish which countries and regions they want to target. Once retailers identify their international expansion strategy, they can then determine their target markets. For example, companies like Wiggle, a UK-based online retailer for sporting goods, have localised their payment options based upon their target audience’s retail needs. They have adapted their payment page, domain, texts and language options as well as payment options to suit the needs of their consumers, in 14 countries around the world. For example, customers in Germany have the ability to pay using their local currency and access the site in their native language.

Executing a multi-currency option and accepting local currencies for local markets are two smart strategies for expanding e-commerce businesses across borders. As there are a huge range of payment methods out there, it’s important for retailers to identify which ones are most relevant to their market.

Collect services

Secondly, retailers should aim to work with payment service providers (PSP) that offer collect services on local and international payment methods via a single contract, making the process far easier. . A single contract enables retailers to expand quickly and to accept all kinds of payment methods. For example, Ingenico Payment Services act as a one-stop shop where merchants are contracted with Ingenico e-Commerce Solutions and Ingenico Financial Solutions which delivers collect services using its own acquiring service. Funds are then collected on behalf of the retailer and paid out according to the agreed terms and conditions. Without this service, merchants would need to open their own bank account and legal entities internationally before they can start selling. With Ingenico’s collect services, they avoid this administrative hassle, and can therefore expand quickly.

Specialist insight

It is estimated that 60% of all online cross-border transactions are not completed because merchant traders do not provide adequate payment methods for international payment. Retailers need to choose a PSP that provides consultancy – the specialist knowledge on local and international payment methods. This process of localisation is an essential component for cross-border e-commerce success.

Whilst the UK market is maturing, online sales are set to continue to grow in western continental Europe. It is estimated that 40% of European Union customers shop online; and sales in the 13 largest online markets in the EU are estimated to be 200 billion euros, growing at just under 20% per annum. Online sales are forecasted to grow by 16.2% in the UK, while sales across Europe are tipped to grow by 18.4% in 2015, according to research commissioned by RetailMeNot.

It is increasingly important for UK retailers to think ‘outside of the credit card box’ and to expand their businesses across borders if they want to see future growth. Cross-border ecommerce will lead to increased revenues for UK online retailers and is arguably the best strategy for success in 2015 and the future.

Julian Wallis is head of sales UK and Ireland at Ingenico Payment Services

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