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How Cross-Border Merchants Can Optimize Customer Experiences

By: Ted Rogers
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Cross-border ecommerce is growing quickly as more shoppers are open to buying from overseas sellers than ever before. In fact, some experts predict global cross-border ecommerce will grow at an annual rate of nearly 15% until 2025 when total cross-border transaction values could reach $1.6 trillion. Despite this tremendous opportunity, some merchants are still missing out on key areas of optimization that could help them grow. In other words, there is low-hanging fruit for proactive brands ready and willing to optimize their digital ecommerce destinations.

To get a complete picture of what global brands are doing to boost cross-border performance, Digital River and our partners at examined the online checkout processes of 137 leading ecommerce sites across six countries to create comprehensive cross-border merchant optimization reports. The reports show that improved localization techniques, personalized payments strategies, increased transparency, and improved user interfaces, along with other strategies, can help increase cross-border sales. Here are just a few insights from that report that you can use to help your company achieve its strategic goals.

Download the full Merchant Optimization Index and Guide to Cross-Border Commerce reports to discover new ways to move your business forward.

Limiting friction in cross-border transactions

Comparing domestic and cross-border ecommerce transactions, it’s clear brands have work to do to close the gap in shopper experiences. Across the board, ecommerce merchants are less likely to provide the kinds of features that inspire trust in international shoppers, including feedback options, rewards programs, guarantees and refund policies. Because of these decisions, our analysis shows that cross-border ecommerce transactions currently have 11% more friction than domestic transactions.

Data also shows that many merchants are making progress to align domestic and cross-border experiences and limit friction. While some progress is being made, enterprising brands would do well to expedite these efforts. That’s because the most effective approach to cross-border ecommerce is to present your brand story in the most localized way possible. Help customers connect with your brand by localizing for preferred language, payments and promotions. Allow your team to focus on optimizing the customer experience by partnering with global back-end service providers to manage the ongoing complexities of payments, tax, compliance, and fraud management.

The cost to deliver premium experiences

U.S. merchants lead the world in streamlining the digital shopper experience. In an effort to speed up the checkout process and reduce the number of clicks consumers need to complete transactions, our research shows:

  • 89% of U.S. merchants provide site help lookup options
  • 91% allow cross-border customers to leave product ratings and reviews
  • 96% offer “shipping-address-same-as-billing” fields on checkout pages
  • 98% allow cross-border shoppers to checkout via a “buy” button

These conveniences can increase conversions but there could be a price to pay. Our report shows on average, U.S. merchants’ customers pay 43% more for cross-border purchases than for domestic transactions. While a premium shopper experience can account for some increase in cost, much of the additional costs are due to extra shipping fees, taxes and duties, which are largely out of brands’ control. The average merchant charges double to ship products across borders and overall, the average cross-border purchase costs 17% more than the average domestic purchase.

Checking out is shaping up

From a shopper experience standpoint, cross-border ecommerce is getting better. More companies are now offering the types of checkout features that customers demand and expect from their favorite brands. For example:

  • 59% of merchants now offer free shipping
  • 33% offer rewards programs
  • 27% use IP recognition to personalize checkout experiences based on location

Investing in these kinds of upgrades can help strengthen customer loyalty and provide the seamless experience modern consumers crave. However, as you work to optimize the customer experience, it’s also crucial to keep in mind back-office complexities such as landed cost, compliance, fulfillment and reverse logistics. An experience global partner can handle these complexities for you, so you can stay focused on optimizing the customer experience to boost sales and revenue.

Payments prove vital

Studies show that payment considerations are a major factor in driving conversions. To put it simply, if you don’t offer the payment methods shoppers want, they won’t buy from you. When operating on a global scale, this can get complex pretty quickly. But here again U.S. merchants are leading the way.

Overall, U.S. merchants offer 8% more payment methods and support 71 more currencies than the global average. For cross-border transactions specifically, U.S. merchants accept an average of 7.3 payment methods and support 19 currencies. This compares to 6.8 payment methods accepted and 11 currencies supported by the average merchant in our survey.

But simply offering more payment methods won’t guarantee increased conversions. You need to offer the right methods that customers in that market expect to see and prefer to use. That often requires significant research ahead of launch and continued social listening and other research to monitor changes in consumer payment preferences. It’s also critically important to offer pricing in the local currency as shoppers are more likely to abandon a purchase if pricing is only listed in USD.

Beyond customer-facing payment considerations, brands must also work to align back-end payment systems, focusing on dynamic routing, retry logic and limiting payment failures to create a complete payments strategy. By working with experts in this space, global brands can reduce the complexity of payments systems and provide the experiences customers demand to complete transactions.

Optimization is all about alignment

Our merchant indexes make it clear that successful brands are investing in improvements to the shopper experience in myriad ways. But to become a truly global brand, you need to do more than just polish front-end customer experiences. You also need to “look under the hood” and make sure your back-end operations are up to par for selling across borders. By taking a comprehensive approach to ecommerce optimization and aligning front-end experiences and back-office processes, merchants can create a digital shopping destination that keeps cross-border customers coming back time and again.

Want to learn more about optimizing your cross-border ecommerce experience? Connect with Digital River and be sure to download our Merchant Optimization Index and Guide to Cross-Border Commerce reports to unlock new insights and uncover new ways to drive your business forward.