The internet economy continues to grow apace, with analysts predicting that by 2016 the online market will be worth $4.2 trillion dollars in the G20 economies.[1] The internet and the growth of ecommerce are giving online retailers a clear opportunity to expand their customer base across the world.
However, with this larger prospect audience comes a greater demand for delivery flexibility, and retailers need to adjust accordingly. Previously, offering a sole, standard delivery service may have been feasible. Now, other options such as trackable and express deliveries are required to ensure that the company appeals to a global audience.
For example, our research shows that over a third (35.4%) of UK consumers paid for faster or tracked delivery when they last purchased an item from outside of the UK. Clearly, consumers have different delivery requirements when purchasing an item from somewhere other than their resident country. Since the delivery has to cover a greater distance and therefore may take longer, the customer is likely to foresee greater scope for error or delay.
The research also reveals that the tendency to pay extra for these services is more prevalent amongst younger buyers. The percentage that paid for faster or tracked delivery was highest among the 25-34 age bracket (49.5%), closely followed by 18-24 year olds (48.3%). Retailers must be sure to understand their customer base – including the particular requirements of their target audience.
The territories that a retailer is looking to target will also impact the delivery solutions offered, since consumers in different territories can have vastly different expectations. For example, unlike in the UK where pick up points are only just becoming widespread, in France almost a third (28%) of products ordered at distance are delivered to pick up points.[2]
As well as the actual delivery options offered, the ‘back office’ processes will also need to be reviewed to ensure they accommodate the preferences of international customers. In Germany, for instance, confirmation emails following an online purchase are seen to be particularly important. In December 2011, almost 40 percent of online shoppers in Germany rated them as important, closely followed in terms of significance by timely deliveries.[3]
Payment processes also vary from country to country. In Brazil, consumers are used to a variety of payment options including boletos bancarrios; vouchers that can be printed from an e-commerce site by a consumer, which are taken to the bank in order to pay for their products. The consumer then goes back online to complete the process. This provides security-conscious consumers an additional payment method through a secure source.[4]
The lesson for retailers is to have a good understanding of the markets and demographics they are looking to target, before they expand. Engaging an expert partner can be valuable here. A company with a proven track record will have the necessary global knowledge, contacts and expertise. There’s no doubt the e-commerce phenomenon gives businesses an amazing opportunity to expand globally, but doing so successfully requires planning and research. Rushing into global growth without the necessary preparation can backfire and become costly.
Paul Galpin is Managing Director of P2P Mailing
[1] BCG Perspectives by the Boston Consulting Group, ‘The Internet Economy in the G20’, 19 March 2012 [2] INRETS, ‘An evaluation of recent pick up point experiments in European cities: The rise of two competing models?’, July 2007 [3] yStats.com, ‘Global E-commerce Delivery Report 2012’, November 2012 [4] IMRG, B2C Global e-Commerce Overview 2012
