Retail’s Bright Spot - The Pandemic Propels Cross-Border E-Commerce Growth
Retail’s Bright Spot - The Pandemic Propels Cross-Border E-Commerce Growth
Retail’s Bright Spot - The Pandemic Propels Cross-Border E-Commerce Growth

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Sean Kernan in Mind Cafe

Retail’s Bright Spot: The Pandemic Propels Cross-Border E-Commerce Growth

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Retailers are unlikely to look back on 2020 fondly. Much of the industry saw dramatic declines as stores were forced to close, and consumers were kept at home. Customer spending, however, did not stop altogether.  As homebound shoppers turned to digital channels, the first eight months of 2020 generated $497 billion in online sales. [1] E-commerce digital buyer penetration worldwide is now predicted to reach 51% in 2021. [2]

Cross-border e-commerce was a particular bright spot for the industry. Closed borders and travel restrictions meant consumers were not only shopping more online, but they were doing so around the world. In 2018, cross-border e-commerce was a $175 billion market and was on track to grow to US$423 billion by 2023. It is now projected to make up 17% of e-commerce in 2023, with sales of US$736 billion globally. [3]

Many brands recognized that, in the face of global uncertainty, geographic diversity had become imperative to mitigate risk and maximize the addressable audience. Those who embraced cross-border e-commerce in 2020 or earlier saw impressive results as demand popped up in unexpected regions.

At ESW, we enable brands to create domestic-equivalent shopping experiences in multiple markets. Brands that offered a seamless shopping experience through ESW saw cross-border sales rise by an average of 82% year over year in 2020, demonstrating the sizable market opportunity available to globally optimized retailers. Some of the fastest growing markets in 2020 included The Philippines (+258%), Morocco (+215%), and Chile (+211%).

A recent ESW survey of more than 22,000 consumers across 11 countries revealed that more than half (52%) of respondents said they had made six or more cross-border purchases in the past year. The top reasons cited for purchasing internationally were lower cost (36%) and availability of products that couldn’t be found in the shopper’s own region (35%). Meanwhile, the biggest barriers to purchase were high shipping costs (31%) and concerns about having to wait too long for orders to be shipped (30%). 

Providing a consistent, fast, and safe shopping experience to customers regardless of their geography will be critical to reaping the benefits of widespread changes in shopper behavior. ESW CEO Tommy Kelly describes what this shopping experience should look like:

Thomas Kelly ESW
Thomas Kelly, ESW CEO

“At no time should consumers feel friction as they go through the browsing and purchase journey. They should be able to browse in their own language, view prices in the currency of their choice and clearly understand the final cost, with no surprises in the form of unexpected additional charges — whether in the checkout or at the point of delivery. From a delivery perspective, the order should arrive when it is supposed to — predictability is key. And consumers should also be able to return an item seamlessly when needed, while receiving a full, fast refund.”

ESW’s survey data has shown that younger, digitally native shoppers are more likely to shop cross-border, with Millennials accounting for nearly half (47%) of shoppers who spent more than $500 on international online purchases over the past year. Retailers who have not yet fully optimized their international experience will be losing out as younger generations grow increasingly accustomed to shopping online for their favorite brands, wherever in the world they are.

[1] Adobe analytics

[2] Statista

[3] Forrester

By Claire Jackson, US Marketing Manager, ESW

Tune in to Fashinnovation 4th Worldwide Talks going live today! Be a part of the action, and help drive change. Fashion is Now! 

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