Home
Resource Hub
Blog
Blog Article
Blog Article

A guide to cross-border shipping in the effortless economy.

Written by:

FedEx

Related topics:

Cross-border Trade

Share this article:

 

Sparked by consumer demand for more convenience, and accelerated by the pandemic, we are living in an extraordinary new era of effortless, always-on global commerce. 

It’s a world rich with opportunity and choice, where consumers no longer need to ‘go shopping’ but simply ‘shop’, whenever, however and from whomever they choose. That could be from a shop down the road or, increasingly, a business thousands of miles away. And as diverse as these consumers are, they have one thing in common: the desire for a seamless shopping experience.

Here, we take a look at the new ecommerce era, the opportunities presented by cross-border shipping, and how to stand out and thrive on the global stage. 

An exciting new era for global ecommerce. 

Though Covid-19 hastened the pivoting of physical to digital retail, ecommerce was booming well before brick-and-mortar stores reluctantly shut their doors in 2020. 

The year before the lockdowns began, retail ecommerce sales were valued at $3.4 trillion, almost tripling from $1.8 trillion in 2016. By 2020, this figure had risen to $4.3 trillion, and though the pandemic shows signs of slowing down, e-commerce does not.

By the end of 2021, sales are expected to hit $4.9 trillion and this will have soared again to $6.4 trillion by 2024. Today, 84% of consumers say they rely more on online shopping than before the pandemic, and this behavioral shift is here to stay.

According to research conducted here at Linnworks, The Effortless Economy, three in four shoppers plan to continue shopping online in the wake of Covid-19. The main driver behind this trend? Convenience. 

Convenience and meeting consumer expectations in the effortless economy. 

Today’s shoppers want effortless online shopping followed by fast, low-cost and highly convenient delivery. Global logistics brands like FedEx Express have pivoted to introduce even more powerful services, specifically designed to meet the needs of ecommerce customers like FedEx International Connect Plus. Their aim? To reach customers faster, with more economical options and greater convenience — such as multiple pick-up and drop-off points.    

In our recent article Five ecommerce trends you need to know, featuring our latest research, not only do 76% cite convenience as their top priority when it comes to choosing an online retailer, but 78% say they value convenience more than they did before the pandemic. On top of this, a report from the National Retail Federation (NRF) found that 97% of consumers have abandoned a purchase if it was proving inconvenient.

So what exactly do today’s customers consider convenient? Here are three things survey respondents identified as creating a hassle-free shopping experience: 

  • A guest checkout option: the less forms they have to fill out, the happier they are and the more likely they are to complete the purchase
  • Cross-device shopping: they want to be able to start their journey on one device and finish it on another. According to the Global Ecommerce Playbook by digital marketing specialists Dentsu, there are now 7.6 touchpoints in the average ecommerce purchase
  • Data stored for future purchases – so purchasing is simpler, faster and more personalized

On top of consumer priority number one, convenience, Linnworks research identified another four must-know ecommerce trends. 

Customers want a seamless buying journey: 81% of shoppers are looking for a frictionless, multichannel, cross-device ecommerce experience. Two in three shoppers have given up on buying something because the search and checkout features were too complicated. 

Social and marketplace selling is key: more than four in five shoppers like shopping on social channels, with Facebook leading the way: 67% of social commerce purchases take place on the platform. 71% of people would rather complete a purchase on a social site than be redirected to a retail site. 

Shoppers make faster decisions when payments are smooth and flexible: almost nine in ten shoppers say seamless and flexible payment options speed up their buying decisions and 89% will make larger purchases if this is the case. 

Delivery options need to be convenient: 95% of shoppers cite convenient delivery options as a major factor in making a purchase. Consumers want to be able to choose a delivery option that suits their schedules and life style. This including safe deliveries at the door or access to retail pickups when consumers can’t be home. That’s why companies like FedEx offer recipients the ability to manage their deliveries to home or to a wide network of pick up and drop off locations while having full control and visibility of their shipment with FedEx Delivery Manager

Keeping up with evolving consumer trends like these is vital to success. And with more and more global consumers seeking out products from beyond their shores (55% of online shoppers have purchased from another country in the past 12 months), developing a comprehensive and agile cross-border ecommerce strategy could unleash huge rewards.

The rise of cross-border ecommerce.

Cross-border ecommerce is, as the name suggests, the process of selling products via an ecommerce site to people or businesses outside your borders. The market has been expanding for some time. In fact, according to Accenture, cross-border ecommerce is growing at double the rate of domestic ecommerce.

Despite a short lull for many markets at the height of the pandemic, for most regions the latter has only served to fuel its popularity. 

Global cross-border ecommerce sales grew 21% in 2020, compared to 2019, according to international online selling specialists, Global-e. The U.S. saw cross-border sales jump by 42% in May 2020. And similar surges and growth have taken place across the world. 

In Europe, cross-border ecommerce was up 35% in 2020 over 2019, constituting 25.5% of all European ecommerce. The Gulf region enjoyed growth of 214% from January to June 2020. And, like online shopping as a whole, this upward trend is set to continue. 

According to fintech research specialists, Kaleido Intelligence, global online shoppers will spend over $1 trillion on international shopping websites and digital services in 2022. And Statista predicts that in the same year, cross-border ecommerce will make up 22% of ecommerce shipments of physical products – up from 15% in 2016.

As a consequence, things are looking good for the international logistics market. According to a report by the intelligence experts Infiniti Research Limited, the global cross border ecommerce logistics market will grow by $44.61 billion from now until 2025, progressing at a CAGR of 11%. 

 Why are customers choosing to shop from international sellers?

 

There are a number of reasons why more and more consumers are searching for products further afield, but commonly cited are greater variety and choice, products not available locally, little difference in delivery times compared to domestic sellers, and lower prices. 

According to Chris Hodge, Ecommerce Marketing Manager at FedEx Express Europe, “consumers are looking across borders for both lower prices and unique goods not found in their home markets”. And the figures back this up. In a recent international survey, 60% of respondents cited an inability to buy a product locally as their reason for shopping from overseas, and 64% said they were looking for cheaper prices and/or cost savings. 

And just as cross-border buying offers benefits to consumers, it has huge advantages for ecommerce businesses. Hodge describes cross-border ecommerce as a “growth area for SMEs given the tremendous shift from traditional channels to online sales witnessed throughout the pandemic”. 

By embracing international ecommerce – while of course providing the seamless shopping experience expected in the effortless economy – ambitious ecommerce businesses can gain more customers, boost their brand awareness, and ultimately increase their revenues.

Cross-border shipping: the definition and the benefits.

Cross-border shipping is the process by which you store all of your stock in your own country, rather than in warehouses in your target markets, and then ship it to international customers from wherever your business is based. In the Ultimate Guide to Cross-Border shipping, FedEx highlights three advantages to this method: 

Cost-effectiveness: it’s expensive setting up operations and storing products in other countries

Faster reaction times: if supply chain issues arise, you are able to deal with them more quickly knowing they’re happening in one place 

More effective management: having stock, staff and infrastructure in one place is simpler than managing multiple sites. 

Tips on cross-border ecommerce success.

Of course cross-border shipping can be tricky, from understanding regional trends and expectations to navigating often complicated local payment systems or customs rules. However, by conducting research on your markets and reading around the subject, such as in this article we recently published on international shipping strategy, you can overcome these challenges and unlock huge opportunity. Here are some key ways you can maximize your chance of success. 

 

  1. Localize your ecommerce site: shoppers want to browse, buy and reach out to the brand in their own language, using local payment methods and currencies. According to Global-e, localizing the customer journey sees an average uplift of 58% in conversion rates across all international markets, with leading markets realizing increases of 250%. A huge 98% of shoppers prefer to browse and pay in their local currency.
  2. Sell through an online marketplace or local ecommerce platform: partnering with a popular local platform, such as Alibaba in China, or a trusted social marketplace could help you reach a wider pool of shoppers and expedite your growth, particularly when you’re first entering the market. As our research uncovered, one in three consumers has purchased an item while on a social platform.
  3. Get your pricing right and be transparent about costs: research what your competitors in your target regions are charging to ensure you’re not over or underpricing your own. You also need to be aware of international shipping costs, and decide on your returns policy, making sure you’re clear at the start of your customer’s shopping journey about all costs, including delivery and tariffs. A surprise charge often leads to a lost sale.
  4. Create an international marketing calendar: boost your sales by being prepared for peak shopping periods, from carnivals and religious holidays to unique events like Single’s Day in China, during which Chinese shoppers spent a whopping $117.2 billion last year.
  5. Automate to increase revenue faster: automation can simplify and streamline everything from your supply chain to marketing, boosting efficiency which in turn fuels growth. Automating all your commerce, for example, by partnering with Linnworks will allow you to scale up much more quickly, and meet growing customer demand for omnichannel experiences. The Linnworks FedEx integration speeds up processes with delivery automation, giving users access to the full suite of FedEx services for use within Linnworks.
  6. Choose an experienced cross-border shipper that can meet customer expectations: you need to offer seamless delivery, with fast and low-cost options, as well as being transparent about delivery times: 62% of customers in our survey say they are more loyal to a retailer that is honest about delivery costs and the time it takes to deliver. FedEx has been shipping cross-border for over 50 years, and can help expedite your success in a number of valuable ways – from meeting customer needs for convenience with FedEx Delivery Manager to delivering on low-cost and fast shipping with economy and express services. FedEx can also help you navigate international customs procedures with simple-to-use customs tools and experienced personnel. 

 
 

As more and more of the global population is going online to buy – setting their sights on international products – it’s never been a better time to take your business to the world. Embrace the trends of the effortless economy and get cross-border shipping right, and you will unlock untold opportunities for your business. 

Grow your e-commerce business cross-border with FedEx. Open a FedEx account and start shipping.


Download our whitepaper on the effortless economy.

Related articles

Subscribe now

Get the knowledge you need to grow your business, straight to your inbox.

Now commerce connects

Find out how Linnworks can help grow your business.

Speak to us to find out how Linnworks can connect and automate your commerce operations so you can capture every revenue opportunity.

Book a demo