What do you remember from 1995? Toy Story hit the theaters, the San Francisco 49ers won the Super Bowl and the popular haircut was the Rachel from Friends. Also, a site called AuctionWeb launched. We now know it as eBay.
In 1995, the internet was still a new innovation for consumers. Fast forward to today and pure-play online marketplaces are not only a favorite shopping destination for U.S. consumers, they have sky-rocketed in popularity with online shoppers around the world. Our 2015 Global Online Shopping Study showed that 66 percent of international consumers chose online marketplaces when they were asked what types of online sites they would consider purchasing from, while 62 percent selected retailers’ web sites.
During the last few years, more online marketplaces have been emerging globally, offering retailers even more avenues to sell products, compete and expand their footprint internationally. Also, according to eMarketer, retail ecommerce sales will more than double to reach $3.578 trillion by 2019. As ecommerce continues to grow globally, in conjunction with a new generation of consumers coming online, marketplaces as a destination will continue to expand along with cross-border shopping. For example, in China marketplaces are the de facto way that consumers shop with retailers driving. Approximately 90 percent of online business-to-consumer sales in China are generated on marketplaces, according to eMarketer.
This demand is being driven by consumers’ desire for accessing products that they can’t buy in their own market, the convenience of having a variety of products to choose from in one place, costs, and a frictionless service experience.
Startup peer-to-peer platforms and large brick-and-mortars are also changing the global ecommerce landscape, giving consumers even more options to shop and simplifying the selling experience for even the most novice seller. In addition, social media sites are continuing to experiment with buy buttons and exploring making videos shoppable in the U.S.
Going back to 1995, less than one percent of the world was on the internet. Today, it is over 40 percent, and this number grew by the billions over the last few years. To reach new consumers, retailers need to continue to innovate and improve the overall shopping experience. By offering a consistent shopping experience across channels, focusing on what consumers want and how they like to shop, U.S. retailers can tap into the booming global ecommerce opportunity.
To remain competitive in this changing landscape, there are three key considerations that U.S. retailers should take into account to help successfully optimize their international strategy and provide a positive shopping experience for consumers:
Test the waters
Setting up storefronts on online marketplaces is a low-risk, low-cost way that U.S. retailers can test global demand for their products and better prepare to navigate the logistical challenges of international ecommerce. Retailers can set up online shops – and in some countries with partners – to launch a subset of their catalogues to see who shops, who buys and which products are in greatest demand. This approach can help retailers gain significant insight into both opportunities and processes.
Use international data to identify buying trends
Once retailers have a better understanding of what products sell in certain markets, they can glean these buying behavior data to expand business on their own online site. For instance, if the data shows sales are strong for a certain designer handbag in red with shoppers in China, but the same bag is not selling in blue in the same market, they can update inventory in their product catalog to reflect this and create promotions to further help sales. Gleaning data can also help identify average price points that are selling the most in certain international markets.
Meet consumers where they are
Today, many retailers choose to sell both via online marketplaces and their traditional online sites. To determine the right mix, retailers should assess how consumers in each country search for products and what types of sites they are most likely to buy them from. Our study shows that only 44 percent of international consumers are searching for products directly on retailer websites. Instead, the majority (62 percent) are using search engines to find products, and that number is even more pronounced in Japan and the UK at 70 percent. In terms of purchase behavior, consumers in Russia (78 percent) and China (76 percent) prefer shopping on marketplaces. However, consumers in Australia, Brazil, Japan and Canada have a stronger preference for shopping directly from retailers’ sites.
Megan Higgins is Vice President, Global Business Development and Partnerships, Global Ecommerce, Pitney Bowes.