Cross-border e-commerce heats up in Europe: Three things brands should know

Cross-border e-commerce now represents almost a third (25.5%) of all e-commerce transactions in Europe. That’s the key takeaway from the TOP 500 Cross-Border Retail Europe, an annual ranking of the 500 best cross-border online shops in Europe. Cross-border online sales in EU member countries generated 146 billion Euros in 2020--a 35% increase in revenue compared to 2019. The report states that the top driver of this explosion in cross-border e-commerce is the global pandemic. It’s not surprising, as continued lockdowns keep retail stores shuttered and disruptions to the retail supply chain continue. Just as U.S. consumers turned to overseas retailers last year to find the items they couldn’t get from domestic brands, the same trend is occurring globally. 

For brands that are ramping up their global expansion plans, this is an exciting time. With so much new traffic from cross-border consumers coming to your e-commerce store, it’s an opportunity to engage and retain new customers. But it all comes down to providing the most seamless customer experience possible. And that’s where it can get challenging. 

What do brands need to know about appealing to cross-border customers in the EU? Here are three important aspects to consider.

• Localization is Essential. If you’ve noticed a marked increase in cross-border web traffic, but it’s not resulting in increased conversions, it may be time to take a hard look at your brand’s localization strategy. An obvious place to start is with language translation. Our research shows that most global consumers are less likely to purchase from merchants that have not translated their sites, most importantly checkout, into the local language. However, localization goes beyond language to include all aspects of the online experience for international shoppers. Details such as displaying prices in the local currency, offering a mix of country-specific payment options, and localized advertising product feeds are all part of the equation. 
• Fast, inexpensive shipping is the expectation. To succeed in the EU, brands must create a cross-border shipping strategy that doesn’t force customers to pay too much or wait weeks to receive their goods. Long wait times and high costs are two of the biggest barriers for consumers when shopping with international brands. Brands also need to factor in any additional shipping surcharges depending on the country in which the customer resides. Remember, EU citizens reap the benefits of easy and cheap cross-border trade between member nations. Brands and retailers from outside the EU will need to be competitive. One strategy to consider is offering shipping tiers. Presenting multiple shipping options that optimize for speed and cost increases the likelihood that your shipping offering meets the local customer’s expectations.
• Consumers don’t like to be surprised by taxes and duties. Cross-border brands must be able to demonstrate to global shoppers that they are on top of taxes and duties especially when it comes to placing a cross-border purchase. Accomplishing this requires your e-commerce website to calculate accurate duties and taxes for purchases in each market. Brands need to be able to adjust how these fees are displayed depending on local preferences. Depending on geographic region, some shoppers prefer taxes and duties to be listed on the product page, while others want them itemized in the shopping cart, or in the checkout flow. That’s why A/B testing is so important. It can help you determine which display configuration increases conversion in each market. 
  

By partnering with Flow, brands and retailers can create a truly localized experience for customers in the EU. With seamless integration of local pricing and tax and duty calculation capabilities, Flow offers a modular solution for the many challenges of international expansion. Customers across the EU will enjoy fast, cost-effective delivery of their purchases thanks to Flow’s streamlined logistics model and last-mile carrier relationships. With Flow on your side, your brand can focus on creating great customer experiences that will keep EU shoppers coming back for more.

To learn more about our approach to cross-border e-commerce in the EU, contact a Flow international e-commerce expert today.