The recent lockdown restrictions brought on by COVID-19 have been a challenge for non-essential retailers, who continue to face uncertainty following the closures of physical stores. As a result, this has led many to quickly pivot back to operating fully online.
Recent data from Global-e reveals that ecommerce was a ’lifeline’ for 69% of non-essential UK retailers, with half (51%) experiencing growth in their domestic sales since the outbreak of the pandemic. As shoppers move online, this shows that despite the pandemic, there has continued to be a demand for retail goods online. However, with the busy festive season now in full swing, retailers need to work harder to attract consumers shopping online. Indeed, 70% of British retailers believe that festive trading in Q4 is more important to their business this year than any year previously, with roughly two thirds (67%) admitting it will be vital to their survival and 62% expressing concerns that Q4 sales will not be enough to recover from the impact of COVID-19 on their business.
Rising international demand
The online demand for fashion and other non-essential goods continues to soar despite the pandemic and this is being led by demand in international markets. Many British retailers have already reaped the rewards of cross-border ecommerce, with nearly half (44%) of those retailers that do sell internationally seeing growth in different markets since the beginning of the pandemic. Only recently Boohoo, the pureplay online retailer, reported it has grown its international sales by 55% in the past year, with sales rocketing by 83% in the US.
The first IMRG and Global-e cross-border index that was published in September shows the constant growth in global demand in major ecommerce markets across Europe and the rest of the world, with increases in online sales since April and through the summer, emphasising signs of the much-discussed ‘new normal’ being established. Comparing the same business’ international sales in the first 8 months of 2020 versus the same period last year showed overall 21% YoY increase across all markets worldwide with Q2 2020 sales alone soaring by over 53% YoY. Indeed, with the surge we’ve seen in cross-border ecommerce trading this year, it is clear that it is a vital opportunity for revenue growth and has become a key to survive the decrease in domestic sales and the closure of physical stores.
Although many retailers and brands have already adapted their strategies to selling online to international markets, many of them are struggling to maximise their global online opportunity.
To benefit from the increased online demand in global markets and to compete with both domestic and other international merchants in the crowded global ecommerce market, retailers’ online experience needs to be tailored to individual markets. This is so that shopping in those markets is simple, hassle free and is in line with local shoppers’ preferences.
This involves offering pricing in local currencies, providing the option to pay via local and preferred payment methods as well as providing shoppers with the final cost, including any additional local duties and fees that may be added to their purchase. Offering an easy and simple delivery and returns process, has also become particularly important during the current pandemic - and these need to take into account delays, which should be communicated clearly to shoppers.
Every market is different, so it is important that retailers ensure they understand these markets and their consumers’ preferences on an individual basis. For example, it might be common for customers in the US to pay via American Express or Apple Pay, but in China, shoppers prefer to pay with local payment options such as Alipay and WeChat, whilst German consumers frequently use open invoice. Local tax and duty thresholds, which change constantly, means that retailers not only need to make sure the calculation they provide their shoppers with is accurate, but also consider how it is affecting their offering, based on their vertical and AOV. Moreover, to be competitive, the shipping proposition should be adjusted to the common rates and preferred delivery methods in every market. With the nearing of Brexit, these elements will become crucial for retailers that EU countries are among their key international markets.
Lockdown periods are huge challenges for non-essential brands and retailers, especially during the crucial holiday trading period. The busiest shopping event in China, Singles Day, that beat all records this year, emphasised the growing global online demand, as well as the potential in international online trading to help weather the slump in sales caused by limited in-store footfall and overall decreased domestic retail.
Implementing an international offering might sound simple, but ecommerce retailers must ensure that they are localising the whole experience to individual markets to make it successful and maximise their ROI. All online consumers - no matter where they are in the world - are looking for a hassle-free shopping experience. This means that retailers and brands must ensure that they are paying as much attention to their international offerings as they are domestically in order to reap the rewards and boost conversions.
Neil Kuschel, CEO Europe at Global-e