Is cross-border commerce changing the retail landscape?
UK retailers have a huge opportunity to benefit from cross-border commerce, especially as the popularity of British brands abroad continues to rise. According to Barclays, a 7% premium is paid in the UK’s top export markets for a ‘made in Britain’ label. Retail brands including Burberry, Hackett and ASOS originated here and their reputation for quality and innovation has made them attractive to shoppers around the world.
In addition, the internet means retailers now have the ability to provide goods to customers in new markets without having a physical presence there. This means that they can grow their businesses rapidly, and with fewer overheads.
Best of British?
The popular British brand, coupled with the power of the internet, is a strong potion for cross-border commerce success. Global internet accessibility and the adoption of multiple connected devices means that consumers are no longer confined to shopping on their home territory. Dyn research found that globally, 70% of consumers have bought from retailers located in other countries within the last 12 months.
However, in tandem with the growth of ecommerce and the increase in opportunity, retailers are also facing a larger pool of competitors as a result of this borderless internet. The fact that brands can now provide online customer experiences from anywhere in the world means that UK retailers now have to compete with companies outside of the UK targeting their customers too. This is widening the goal posts for UK retailers.
With so much choice online, both at home and now abroad, how can brands ensure that they remain the top choice for consumers?
In today’s competitive environment, challenger brands will always be able to offer the same product, often for a cheaper price. Therefore the ‘brand experience’ and internet performance that retailers offer is their most valuable asset to differentiate themselves.
Investing in seamless and reliable online customer experiences is the key to staying on top of the competition. Over the next couple of years retailers will find that the capabilities of their technology to scale and provide ecommerce to shoppers overseas will determine their success. For example, 88% of people say that they would possibly or definitely purchase from retailers located in other countries, if the experience was faster and easier.
However, to compete in the global economy and deliver this experience, retailers need to focus on internet performance. They must ensure that their cloud service providers and end users are aligned, to provide the same online experience regardless of geographic location. Proximity does not necessarily equal performance. Just because a cloud provider has a data centre in a region doesn’t guarantee that performance needs will be met. Having visibility and insight into the providers that best serve each individual market and understanding how networks connect within the internet, retailers can ensure that they are selecting the best locations to run applications, bring content closer to customers, and connect with the best-performing internet/traffic routes so that globally they deliver an excellent experience. This helps them to maintain a good reputation and brand loyalty amongst customers, while securing the bottom line too.
Gone in three seconds
Brands today have a matter of seconds before a consumer will move to a competitor’s site. According to our survey, three seconds is actually the longest most consumers (64%) will wait for a shopping website to load. With such a small window of opportunity, retailers cannot afford to have a slow website, or functionality which isn’t intuitive. Retailers must monitor, control and optimise internet performance at scale to make the internet a competitive tool for their business globally. Because the internet is dynamic, retailers should be constantly monitoring performance to ensure that they’re keeping up.
In addition, the mobile channel now plays a key role in the wider journey to purchase across the world. In markets like China mobile is particularly important, as the fast adoption of 4G by the population has made it a truly mobile country. Mobile shopping habits mean that retailers need to offer the same experience on smartphones as a PC or laptop to meet consumer expectations.
However, many retailers are struggling to deliver this consistent experience. Retailer visions for consumer mobile shopping are not matching customer experiences, and according to Dyn's research, 60% of shoppers said they don’t make purchases on their phones or tablets because the experience isn’t good enough. Many shoppers do not believe shopping from their phones is secure enough, and prefer the perceived safety and security of the traditional online or in-store experience.
The mobile factor
Retailers must remember that many shopping experiences online start with a mobile website. Therefore, optimising web performance for mobile devices — delivering the right content and user experience to the right form factor — will be critical for retailers to instill the sense of reliability and trust necessary to make mobile shoppers into returning and loyal customers.
In addition, it’s inevitable that sometimes your site will be down for maintenance. However, retailers must have the ability to take any part of their infrastructure down and still stay in business. This is a controlled event and mitigations must be planned in advance. A business continuity plan is also critical because it protects revenue, brand reputation, and ensures a consistent customer experience. A contingency plan for both controlled and uncontrolled internet events is essential for retailers. This starts at the DNS layer and ensures that retailers can survive outages and traffic spikes without any subsequent loss of performance or revenue.
Overall, retailers cannot afford to ignore cross-border commerce. If they’re not going to use it to expand into new markets, other companies will, and hence the competition is set to increase. As a result, the online customer experiences retailers serve must be prioritised as key differentiators.
Only with the best and most reliable online performance in place across mobile and the web can retailers stand out amongst the competition and succeed in new markets. Finding the right partners that help provide seamless experiences and keep a brand’s site running smoothly is arguably as crucial component as any, whether fire-fighting the competition or making a play for new markets to an effort to be established as a 'global' player.
Paul Heywood is managing director and VP of EMEA for Dyn