Amid economic volatility, brands across the globe are asking themselves: How can we consistently increase revenue during inconsistent times?
Looking at the variety of potential solutions, many prominent merchants and e-commerce providers are opting to increase investment in their international online retail presence. Walmart, for instance, is charting a five-year plan to double its gross revenue from foreign markets, following similar announcements by leading global brands such as Adidas and others in the past.
Why are so many brands investing in their international online retail sales as a core revenue-generating strategy?
Low Investment, Big Returns
In a challenging economy, brands are actively seeking the path of least resistance — one that maximizes revenue while effectively managing costs. Retailers need quick returns on their investments and quick time to market on what they implement if they want to stay competitive.
The global B2C cross-border market is expected to reach a staggering $7.9 trillion by 2030. This burgeoning opportunity offers a dual advantage of both boosting sales and establishing additional revenue streams. Even more importantly, substantial infrastructure investments aren’t necessary, meaning international e-commerce offers retailers a lower risk and less resource-intensive way of reaching new customers across the world.
By embracing international e-commerce, retailers can optimize their resources and minimize the financial burden associated with loans and capital investments, ensuring a prudent approach to sustainable growth.
The ‘Influencer’ Effect
International e-commerce is not only appealing due to being “resource light.” Quite often, retailers have already made a substantial investment into increasing their brand’s global appeal, even if that wasn’t their original intention, thanks to their investment in social marketing.
Consumers around the world now have unprecedented exposure to the most alluring trends, brands and products, regardless of their geographic location, thanks to social media. In fact, our global survey of thousands of e-commerce shoppers across nine markets showed that an astounding 75 percent of respondents purchased a product from an international brand after engaging with it on at least one social network.
Moreover, countless brands have invested heavily in recruiting social media influencers to promote their products, thereby tapping into these influencers’ global fan bases in the process.
Simply put, brands have already made the marketing investment to garner international demand — if companies can convert these potentially interested shoppers into customers, they instantly open up a whole new world of revenue.
Easier Said Than Done
However, such international expansion through online retail doesn’t come without its challenges.
The “international market” isn’t a singular entity; rather it’s an amalgamation of hundreds of markets. Each is characterized by its own “flavor” of highly specific consumer preferences that together create the consumer experience. To succeed across borders, brands need to adapt to local market preferences, rather than expect their global customers to bend to their local culture of operations.
This means that when targeting different markets, brands should hyperlocalize — tweaking their offering to meet the preferences of any respective region or else risk failing to compete with local alternatives.
The Next Frontier
The internet and the advent of social media has facilitated the expansion of industries beyond borders, allowing businesses to connect directly with potential customers globally. As such, it should come as no surprise that international e-commerce is retail’s next frontier, as brands apply the lessons learned from domestic e-commerce to generate growth with less resources, boost sales, and capitalize on existing brand equity.
Selling directly to shoppers grants retailers more control over pricing strategies, sales and marketing efforts, thus enabling them to capture a larger share of the revenue generated from each sale with fewer intermediaries. But even more importantly, they can interact directly with customers and leverage the vast volumes of data that are created by these interactions to offer personalized experiences to increase retention and, ultimately, build a highly loyal global customer base.
In this era of unprecedented digital connectivity, the future of retail lies in the hands of those who can effectively harness the power of international e-commerce to forge stronger connections with customers, create exceptional experiences for shoppers located all around the globe, and, most importantly, leverage international demand and convert buzz into consistent revenue.
Matthew Merrilees is CEO, North America of Global-e, a platform to enable and accelerate global, direct-to-consumer cross-border e-commerce growth.
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