The global cross-border market size reached an all-time high with a $28.5 trillion value in 2021. Still, many potential buyers keep resisting the international shopping craze.
With saturated domestic markets, e-commerce sellers need to diversify into new markets. Logically, the more countries you ship your products to, the more potential there is to grow your brand. But not only. The average order value of an international sale is 17% higher than an average domestic sale, meaning that going after international shoppers can skyrocket your revenue.
There are two pivotal elements to winning cross-border sales: trust and customer experience. To help you offer the best journey to your international shoppers and trigger the purchase, we give you 6 reasons why consumers do not buy cross-border, and how to overcome them.
1 Returns are more complicated
When buying online, shoppers cannot see, touch, or interact with the item as they could in a brick-and-mortar shop. That is why online shoppers feel more at risk of misjudging an item’s appearance, and they need to be sure they can easily return the package if it happens. According to Parcll, over 60% of consumers read through a return policy before making a purchase. On the other hand, 84% of online shoppers would turn their back on a retailer after a bad e-commerce return experience. When it comes to cross-border returns, matters are even worse. An outstanding 73% of consumers believe that product returns are more difficult with cross-border purchases, which prevents them from buying abroad.
In order not to deter international shoppers from buying on your website, you need to make sure you can handle international returns seamlessly, and that shoppers are aware of it. First of all, you can review and improve your pick, pack, and check processes, as well as consider labeling, warehousing issues, or barcode scanning. Then, you should make sure that your return policy is accessible and clear. Before considering buying your items, customers want to know how long they have to return it, who pays for return shipping, how quickly returns are processed, or how money is refunded.
2 Delivery charges are higher for international orders
A key reason why shoppers buy cross-border is that the item is cheaper than in their home country. If price is the main driver, international customers are therefore very sensitive to delivery charges. They will abandon their cart at checkout if the shipment charges are higher than their expectations. Not only can shoppers abandon their carts, but they can also refuse to consider buying abroad. 69% of connsumers believe that delivery charges will be higher for international orders. While you can’t spare your customers the duties and taxes associated with international shopping, you can consider reviewing your delivery charges to reduce the overall price.
Since there is no point in you losing money on international deliveries, the first step is to check your shipping costs. You can compare different shipping options compared to your volumes and the type of items you sent. If you send many parcels, you may find that a courier will be able to provide special rates to reflect the volume of items you are sending. For bulk items, you might also consider sending them by rail or by ship as a cost-effective alternative. Once you efficiently cut your costs, you can consider a free international shipping option under certain conditions, over a certain price point, or only on specific products.
3 Cross-border purchases do not arrive on time
Customers tend not to trust the cross-border supply chain efficiency. 66% of online shoppers believe that international purchases will arrive later than promised. However, this distrust doesn’t come out of the blue if we look at the figures. A recent survey showed that 99% of retail respondents admitted they failed deliveries across some portion of their online orders. Another 24% said more than one in 10 orders weren’t delivered on the first attempt. Even though delays can happen for various reasons, according to a study, 41% of consumer respondents place the blame for late deliveries on retailers.
When we talk about cross-border delivery delays, one of the most common reasons is incomplete or missing paperwork, leading to customs clearance delays. To avoid such issues, you need to make sure you can provide the correct HS codes, product descriptions, value, and that you know what documents are needed in each country you trade with. If you do not have the resources and knowledge to deal with such processes, it’s essential to adopt a platform that can help move your goods through customs and avoid delays at scale. Solutions like Eurora allow this by making sure your parcels are compliant with international laws and that all taxes are paid upfront.
4 Additional fees or duties not made clear at checkout
There is nothing worse for a customer than feeling swindled by an online shop because additional fees were not shown in their shopping cart. For e-commerce companies selling across borders, this problem is particularly acute. International shipments are subject to duties and taxes to be paid by the importer, meaning your customer. Even though you are not compelled to show duties and taxes at checkout, it is key to building trust and offering a transparent shopping experience. Unclear prices raise anxiety as customers have no idea how much duties and fees they will need to pay when their order crosses borders. As a consequence, 59% of online shoppers are reluctant to buy cross-border because they expect to pay additional fees or duties not made clear at checkout.
If you want to significantly improve your checkout experience by displaying duties and taxes, you need to be sure you can show the correct rates overwise your efforts will be in vain. When you think that each country applies its own rates and rules, using a duty and tax calculator like Eurora’s Duty & Tax calculation service is key. It displays the applicable VAT and duty rates in the shopping cart in real-time for more than 160 countries and in any currency. Besides, customers prefer to make a single payment including all taxes, instead of having to pay for it once the goods reach their country. You can collect the EU VAT from your EU customers at checkout with Eurora’s IOSS service.
5 No tolerance for foreign companies making mistakes with orders
In a world where a seamless shopping experience is standard, customers tend to abandon their shopping cart at the first friction encountered in their journey. If they face a bad experience with a business on the other side of the world, they are all the more ruthless. 59% of consumers agree that they are less likely to give a foreign company a second chance if a mistake is made with their order. Besides, 74% of consumers are at least somewhat likely to buy based on experiences alone, and 61% will pay at least 5% more if they know they’ll get a good customer experience. This shows that customer experience not only impacts today’s purchases but affects future purchase decisions, too. Especially when it comes to brands that are unknown in the consumers’ domestic market.
In the tumultuous cross-border supply chain, you can’t prevent all delays or issues from happening. What makes a difference for your international customers is the way you manage them. We are in the age of speed and digital, so consumers expect their questions to be answered when and where they want. It is key to provide them with accurate and timely information about their order deliveries at any time. You can consider improving your customer service by offering a self-service option in your live chat so your customers can reach out 24/7, offering shipment tracking and notifications, or improving your response time.
6 Items are more likely to be damaged in transit
One of the main reasons for returning items is because they arrive damaged. A recent survey of over 7,000 consumers found that 67% of customers returned their orders because they were damaged. When a package has to travel around the globe, cross the sea, or pass through many hands, online shoppers are likely to think twice before ordering. In fact, 47% of consumers tend not to buy cross-border because they believe that items are more likely to be damaged in transit.
Having control of your package once it leaves your warehouse is challenging because your delivery carrier plays a big role in this part. Yet, there are extra steps you can take to minimize the chances of damage when the item is being shipped. The key is to be aware of all the checkpoints your package will pass through, so you will be able to better anticipate. To reduce the risk of damage during transport, you can also consider tracking and insuring your packages.
A single platform to grow your business internationally
Improving your customer experience is key, but it doesn’t mean you have to manage everything yourself. Retailers do not need to be tax and compliance experts to successfully run their sales around the globe. Partnering with a cross-border compliance professional like Eurora will take away all your pain while bringing success, scalability, and time to focus on your core expertise.
By using Eurora’s cross-border compliance platform, you can:
- Assign HS codes: Get the correct HS/HTS code for your goods in real-time. We support up to 10 digits HS codes and country-specific nomenclatures.
- Calculate Duty & Tax: display the applicable VAT and duty rates in real-time at checkout. We support any currency and more than 160 countries.
- Put your EU tax compliance on autopilot: Eurora’s fully automated IOSS service offers a secure way to take care of your VAT registration and reporting when shipping goods to the EU.
- Check for restrictions: check if your items are subject to any import/export restrictions, and make sure your customer is not on any denied parties` list. Our database covers most countries in the world.
Are you a UK business looking to reconnect with EU customers post-Brexit? We even have a free guide for you that shows you the process step by step. Download it here!