Optimizing domestic operations can lead to successful international e-commerce

Unlocking cross-border business opportunities should start by optimizing domestic logistics and strategies in addressing legacy processes and technology. By adopting such an approach, businesses can witness a higher rate of growth than the average.

Managing legacy technology is a struggle

Many domestic retailers in the United States have to constantly struggle to free themselves from multiple constraints in handling legacy technology. Business processes, as well as margin risks, are complex, rendering the task difficult for them. According to Michael Griffiths, Vice President of the Marketing and Communications, Retail and Commerce Services for Pitney Bowes, more than 90% of CEOs affirm feeling paralyzed because of massive amounts of money being spent constantly on existing challenges. Subsequently, the financial resources left for growth and transformation becomes very much limited.

Post-purchase experience should not be ignored

Attaining success at international level, however, should start by having a solid foundation of optimized domestic operations. Today, most companies allocate most of their time and investment at the front end and pre-click part of the customer journey. Working on engagement, pricing, and merchandising are focal points while post-purchase experiences are often set aside. As a matter of fact, this end should be viewed as a new frontier for alluring new clients and make existing ones loyal. A research conducted by Pitney Bowes highlights that 47% of consumers surveyed stated feeling frustrated with the post-purchase experience.

This reflects a clear disconnection between the real challenge and the focus of retailers. One example of the post-purchase experience that is failing is shipping. 85% of companies use carrier-provided or single-carrier shipping systems. 91% of midsize merchants have not bothered to update their parcel shipping system in the last four years. This is clearly an unoptimized service. This is even more alarming because giants like Amazon have not hesitated to keep innovating. This should have pressurized merchants and retailers to innovate as well.

This passivity is reflected in the consumer end at international level. The latter has high expectations when making a purchase, just like domestic consumers. But high shipping costs do frustrate over 59% of global consumers. 40% of consumers surveyed also stated being dissatisfied with returns.

Cross-border e-commerce has its own load of hurdles

E-commerce is a great opportunity. However, it comes with its load of hurdles and complexities. Critical areas of concern are fraud, payments, compliance, and returns. Most of the time, they involve government agencies and regulations and laws varying from market to market. This is even more of a hassle because regulators keep changing their minds because of various challenges. To allow domestic business to flourish abroad, they should come with consistency in regulation.

Many companies are rushing to infiltrate the global market but the fact is that cross-border e-commerce is much more than a simple logistics challenge. Most retailers simply do not have the expertise in government relations or do not have a solid network of partners. Some do not even have the necessary data and scale to succeed. This is why having trustworthy and experienced partners in optimizing promotions, in local payment processing, in agency relationships, in landed cost calculations can considerably make processes less complex.

One of the key challenges in cross-border e-commerce is having a robust payment processing system. This is prerequisite for all companies in this sector. Payment methods and processing is a challenge that needs a tailored approach as the preferred payment mechanisms vary from market to market, country to country. It is, hence, vital to carry out a thorough research work about the potential market instead of making assumptions on the payment system to be offered. For instance, almost 100% of e-commerce payments in Spain are made through Visa, MasterCard or American Express. But such is not the case in France and in Germany where these cards account for 60% and 30% respectively.

Legal limitations to the sale are also to be taken into consideration. Every country has its own set of limitations and regulations. For instance, most countries consider transactions done by minors as unenforceable. However, the real issue is knowing the exact legal adulthood as it varies from country to country. Even if certain countries do not have specific requirements, others may have them in place. For instance, the country of a customer might mandate that all packaged food contains a list of ingredients, nutritional values, manufacturing and expiration date clearly printed on the label. Not meeting these regulations may amount to violating the laws of the customer’s country.

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