Ecommerce growth in 2023 is unlikely to match the record-breaking levels of the past few years. Several factors are driving this softer growth, including the cost-of-living crisis, ongoing supply chain disruptions and the return of in-store shopping.
However, ecommerce growth is still expected to be positive in 2023, following on from slightly negative growth in 2022. And steady growth in ecommerce is predicted over the next few years, with an expected increase of more than $1.8tn by 2026. It’s a good time for ecommerce companies to find new pockets of revenue and areas of expansion.
Cross-border opportunities
Cross-border sales are one option that more firms should explore. “When you’re starving for revenue, cross-border ecommerce is really a good place to start looking [for it],” says Chris Hodge, ecommerce marketing manager at FedEx Express. “The shopping cart values are higher, as people are usually willing to pay more for each product and they buy more of them. Usually, they are also somewhat willing to pay a slightly higher shipping cost or accept a higher free shipping threshold.”
Today almost half of EU shoppers buy cross-border. In fact, one recent study found that cross-border ecommerce in Europe was worth €179.4bn in 2022 – an increase of 4.8% compared to a year earlier. Tapping into this huge market may be easier than many ecommerce firms realise, especially given the number of partners that can help them expand internationally.
Buyers get really nervous when it [shipping] goes beyond two or three days
Companies like BigCommerce, Zonos, eShopWorld and ZigZag – as well as FedEx itself – help ecommerce firms with everything from calculating customs duties to handling international deliveries and returns. Indeed, given all the help that’s available, Hodge advises online businesses to decide on a few different countries they want to target initially and just “activate a few markets, monitor performance and learn as you go.”
FedEx, which delivers to over 220 countries and territories, has the global network, local presence and shipping expertise to support the kind of fast international deliveries that cross-border customers want today. “Buyers get really nervous when it [shipping] goes beyond two or three days,” Hodge explains. “Beyond that, they start to think their goods aren’t going to show up.”
FedEx enables its customers to ship from nearly anywhere in Europe to US East Coast business centres next day, which could help UK ecommerce firms to tap into US cross-border sales. Free-of-charge tools like FedEx Electronic Trade Documents (ETD) also allow ecommerce firms to transmit customs documentation electronically for international shipments. This can save time and minimise the risk of customs delays thanks to early notification of potential errors, helping to turn one-time customers into repeat ones.
Adapting to different markets
Despite the wealth of help available, ecommerce firms still need to take a strategic approach to cross-border expansion. They should think carefully about which sales channels are best suited to the new market they’re targeting, and craft their marketing efforts around them. For example, rising smartphone ownership is fuelling ecommerce growth in emerging markets. Furthermore, some markets are more familiar with ecommerce marketplaces or social commerce platforms, whereas others are more traditional, with retailers and brands largely selling through their own websites.
There is plenty of easily accessible data that ecommerce firms can tap into to support their search for pockets of growth. “If you’re in the UK, a lot of the traffic coming to your website is probably already cross-border traffic,” says Hodge. “There are free services you can use to see where it’s coming from.” UK firms may find it easier to move into English-speaking markets initially, as the shared language reduces the effort involved in establishing cross-border commerce. “If you’re a UK seller, you don’t have to worry about the localisation of product descriptions,” Hodge explains.
Cross-border sales to non-English speaking markets are slightly more complicated to engineer, but it can be worth the effort. Indeed, some of the fastest-growing ecommerce markets are large emerging ones such as Brazil, India and Turkey.
Regardless of which country or region ecommerce firms want to expand into, they’ll need to adapt their processes to market norms to maximise the chances of significant growth. For example, there may also be local payment methods in different markets that retailers need to provide. “In Belgium, Bancontact [a Belgian payments company] is really a must-have. In the US it might be American Express,” says Hodge.
Impressing new customers
Wherever businesses operate, flexible delivery options are a consistent driver of conversion. New research from Metapack found that 84% of consumers are likely to abandon their cart due to a lack of delivery options at checkout. “Customers expect tracking – it’s just table stakes. What you layer over that is better delivery time windows,” says Hodge. “We use big data to predict exactly when throughout the day the package is going to arrive. That way, if you’re not home, you can use FedEx Delivery Manager and take an action, such as pick up from a retail point or delivery the next day.”
Customers expect tracking – it’s just table stakes. What you layer over that is better delivery time windows
Features such as free shipping above a certain threshold and an openly communicated and easy-to-use returns process are also vital for attracting new customers, both cross-border and domestic. In fact, a great returns process can keep them coming back to a store time and time again. FedEx has recently partnered with ZigZag to help organisations manage returns efficiently without compromising customer experience.
Many customers check return policies before making a purchase and may abandon their basket if they don’t like what they see, so it’s crucial businesses clearly communicate their policy and ensure it meets customer expectations. “If the returns process looks easy, they’re probably going to go ahead and buy. If it doesn’t look easy they won’t, because they can probably find it [the item] somewhere else,” says Hodge.
During peak seasons, such as the upcoming summer sales and back-to-school period, customers often make purchases with the intent to return some of them. Maintaining a smooth delivery and returns experience during these busy times can help to convert a one-off sale into a long-term customer. Metapack’s research found that 78% of consumers might dismiss a brand after a negative delivery experience. It’s therefore vital that ecommerce firms prepare for these peaks in advance – for instance, by ensuring they have a shipping and logistics partner that can handle spikes in deliveries and returns.
“Work with a provider you can trust and who’s not going to overheat if you do have success,” Hodge advises. “You don’t want to have to go back and retool your supply chain because your provider can’t handle things.”
To find out more, visit fedex.com/en-gb/shipping/industry-solutions/ecommerce.html
