Author: Gregg Zegras, Senior Vice President of Pitney Bowes
For ambitious European eCommerce companies looking to grow their businesses overseas, the US is viewed as the land of opportunity. The economy continues to grow, household spending is higher than that of households in the UK, France and Germany1, and average disposable income is $3,258 a month – 10% higher than disposable income for consumers in the UK, 14% higher than those in Germany and 18% higher than those in France2. But are the streets really paved with gold?
Fortnum and Mason, Net a Porter, Reiss and Joseph are just a few European brands that have had success with their eCommerce penetration into the US market, taking advantage of the borderless world of commerce to expand their footprints and drive new revenues. Their success doesn’t really come as a surprise: after all, the US tops the global table when it comes to online spending, generating the highest average eCommerce revenue per online shopper than any other country in the world3. Selling to US shoppers and benefiting from the strong US dollar is a savvy business decision, negating concerns about a weaker pound or Euro in home markets.
But these companies aren’t just cashing in on strong currencies, their luxury status or their popular brand image: they are shaping their online experience around the customer, and how he or she wants to shop. Successful eCommerce companies expanding overseas need to think like their customers. They need to map out the entire customer journey. And they don’t need to be a major high-end brand to do this.
Here are our top ten golden rules for successful eCommerce expansion to the US:
- Source insight on your target market: whether you’re considering a purely digital entry into the US market, or are considering opening physical stores, intelligence on it is critical; advanced forecasting tools can help you anticipate buying behaviours, mitigate risk and remove the guesswork.
- Location, location, location: software can help you identify a ‘heat map’ showing exactly where your target demographics are located; the US is a hugely diverse country, and sourcing analytics to understand geographic and cultural differences will pay off. Identifying where your customers are likely to be located can help you plan your customer support strategy, to make sure you can support your customers across different US time zones.
- Consider partners: finding partners who can help promote you in your target markets to find consumers is critical. The right partners can help identify opportunities, create messaging and promotions and then help retailers capitalise on it.
- Find out how your prospects shop: 29% of US respondents in a survey4 state mobile as their preferred choice. Make sure your website is optimised for mobile, or you’ll risk losing over a quarter of your potential customers at the earliest stages of their customer journey.
- Localise: although English is the most widely-spoken language in the US, there are differences within the language, in meaning and in spelling. If you want to deliver a personalised approach, you’ll need to factor this in to your planning.
- Understand payment preferences: you need to make the payment process as precise, accurate, swift and streamlined as possible. As well as being able to support US dollars, your business needs to offer payment options which may be preferred by US shoppers, perhaps via PayPal or American Express.
- Be transparent: get to grips with taxes and duties, and integrate tools on your website so you can be completely transparent on shipping costs, taxes, duties and timings. Customers want to know the fully-landed costs – and so do you.
- Identify barriers to trade: importing restrictions and different trade regulations can result in long delays at customs, which will affect your customers’ experience and your reputation.
- Make sure your delivery and returns policies are clear: offer different delivery options, and outline your returns policy so it’s clearly visible to shoppers before they check-out; you might need to consider on-the-ground customer support from a local partner, or rent warehouse space for returns.
- Consider online marketplaces: research has found that 76% of consumers are likely to purchase products from online marketplaces5. For eCommerce firms branching out to the US, this is a great way to sense the appetite for your business and minimise risk.
There is currently a great appetite for European eCommerce firms and their goods, with the UK and Germany considered the most desirable e-destinations for consumers to purchase goods online outside their own country6. This desire for European products and services, combined with the strength of the US dollar, the accuracy of advanced shipping platforms and the accessibility of in-depth analytics, presents an unprecedented opportunity for growth.
1 - World Bank
2 - Infographic from Movehub, Average disposable income: US $3,258, UK $2960, France $2761 Germany $2851
3 - Statista.com
4,5,6 - Pitney Bowes Global Online Shopping Survey 2015