How to Have a Successful Holiday Season: Be Cross-Border Ready
Summer is the perfect time to analyze your DTC cross-border readiness to make the most out of the holiday season.
While recent consumer demand has lagged peak Covid growth levels, quarterly e-commerce sales have continued to grow. In the post-Covid world, cross-border purchasing has exploded with markets like Latin America and India expected to grow in excess of 25 percent annually and UK e-commerce spending anticipated to increase by a whopping 45 percent over 2019 levels, according to data from Statista.
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The prospect of tackling cross-border challenges can seem like a daunting task. But there are a number of new solutions, including end-to end, fully outsourced options that can help get you up to speed in weeks, not months or years. Here, we look at some of the benefits and key considerations of an appropriate strategy.
Benefits beyond Incremental GMV
Cross-border e-commerce has become a crucial initiative for most brands—with early adopters reaping the largest rewards.
It’s no secret that expanding into new global markets can increase sales and brand reach, but there’s also tremendous value in the diversification of demand. This diversification helps reduce dependence on a single market and mitigates risks associated with economic fluctuations or market saturation.
Additionally, cross-border e-commerce allows brands to tap into different seasonal patterns across countries and regions. While a particular product may experience a lull in demand during one country’s off-season, it might be in high demand elsewhere. This seasonal variation enables retailers to optimize their sales throughout the year and maintain a consistent revenue stream.
Key Considerations
Deciding which countries to enter is typically one of the first decisions you need to make and your own analytics data is usually the best place to start. Countries already visiting or buying from you are the low-hanging fruit, versus building new demand into new markets. Your top three-to-five international markets will generally drive the largest share of your cross-border GMV opportunity. If you’re already receiving substantial international traffic and/or sales and you’re not well optimized, or even available, in those markets, you can expect to see high double-digit percentage increases once you eliminate key friction points.
International traffic percentage benchmarks vary by vertical, and an easy way to gauge yourself would be against peer/competitor brands through a quick check on a tool like Similarweb, where you can get a high-level evaluation of any competitors.
DIY vs. DIFM
Another one of the first steps brand needs to consider is whether a do-it-yourself (DIY) or do-it-for-me (DIFM) approach is best. While there’s no rule of thumb, it really comes down to available resources and what aligns best with the longer-term strategic goals.
A DIY approach gives brands more control, flexibility, and potentially lower costs, but requires substantial, resources and time investment. For instance, just launching one new international market can mean multiple commercial agreements and integrations to partner with international payment gateways, tax and duties calculations or new payment methods.
Third-party, DIFM solutions, such as ESW (formery eShopworld), Global-e, and more recently, Glopal, which also ads marketing localization, have gained popularity. These solutions offer speed to market, and specialized expertise in navigating cross-border complexities, but may come with some reduced control and margin impact as most offerings base fees as a percentage of total checkout.
Other key DIY/DIFM retailer considerations include assessing their own internal capabilities, understanding the nuances of those target markets, total cost of ownership, and assessing the need for how deeply localized their specific customer experiences need to be.
For some brands, a hybrid approach often makes sense, whereby a retailer may continue to run their top markets and bring in a third-party solution provider who can help access the longtail opportunity with better efficiency and speed. For others just getting started in cross-border DTC, it might be easier to have a third party get them up and running quickly.
E-commerce Platforms
Platforms play a considerable part in determining a retailers options. Shopify, for instance, has made significant investments in cross-border with their “Markets” offering with built-in tools for small and larger retailers alike, albeit with some added costs, that make it easier to access buyers from around the globe.
Understanding Potential Uplift
When retail leaders are crafting their internal business case, collaborating with an experienced consultant can help construct a robust business plan. Leveraging existing analytics allows for a general uplift assessment. Typically, projecting improvements in conversion rates hinges on benchmark uplifts linked to specific localization elements, and the sum of these improvements can be significant.
This coming holiday season holds great potential for retailers seeking to expand their reach and secure a larger portion of international demand, while building more resilient customer-centric business models.
The current landscape presents a wealth of options suitable for businesses of all sizes. Retailers who make well-informed cross-border investments today are poised to transform their holiday sales strategies into delightful success stories.
David Romeo is a business executive with expertise in e-commerce sales, leadership and strategic partnerships, spanning more than 16 years. Romeo has held key positions at eBay, IAC, eShopworld (ESW), and Global-e, making significant contributions to their growth and accomplishments. He runs Winborne Consulting, where he collaborates with top online retailers and technology providers, enabling transformative growth strategies.
