The Global Ecommerce Roadmap:

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1 WHITE PAPER

2 Abstract A few years ago, a lot of U.S. retailers were asking themselves, Should I go global? Today, that conversation has changed dramatically. Most U.S. merchants are now focused on what international markets they should go into and how they can best get there. Early entrants into international ecommerce have found no single, optimal expansion strategy that can be readily applied by all retailers. Instead, they have shown that individual retailers must arrive at the right strategies for their businesses. To uncover the best approach for your business and provide a positive, profitable buying experience for your customers, consider these three important steps: Assess demand for your products across different, specific international markets Test the waters using low-risk, low-cost go-to-market options Help ensure that your ultimate ecommerce solutions provide costeffective quality service The key lies in pinpointing profitable opportunities for your own product line and choosing reliable, cost-effective delivery options that fit the needs of your business and its customers. 2

3 The shift is on. Ecommerce is changing the shape of retailing worldwide, and retailers need to move swiftly to stake their claims in this fast growing marketplace. The biggest growth opportunities are overseas Globally, ecommerce sales are growing at more than one-anda-half times the rate of U.S. retail sales (11.8% vs. 18.3% projected for 2014). Asia-Pacific is expected to surpass North America to become the world s No. 1 market for B2C ecommerce sales this year. 1 Global opportunities have proven so substantial that early adopters are starting to consider supply-chain realignments to better support their worldwide customer base. So, how do you maximize your international strategy? Our research and data shows that international buyers usually go for the following top 10 categories: apparel, footwear, leather, jewelry, electronics, home goods, clocks and watches, carpet and fabrics, computers and cosmetics. As a rule of thumb, consumers will first purchase low-consideration items, adding a broader selection of online purchases as they become more comfortable with the process. Keeping this in mind can help you select where to focus your initial international ecommerce efforts. With this in mind, let s review the three key considerations that U.S. retailers should take into account to help successfully optimize their international strategies and customer buying experiences. Step One: Assess demand for your products U.S. retailers need to make sure they have a full understanding of what they are selling today and the current demand. Should you focus on certain international markets? Should you offer your full product line or focus on specific products that are particularly profitable or in particularly high demand? There is no single answer to this question. It really depends on a U.S. retailer s brand awareness, products, and price points and most importantly, buyer demand. Start by looking at the typical profile of your buyers, your product catalogue, and global web traffic. This will help you understand what sells. It will provide insight into what consumers are looking for on your current site, and where those consumers are located. It will also help you to optimize what you are selling and provide the best buying experience for international consumers. You ll also want to examine competition within countries you wish to target. Often international ecommerce is driven by demand for products that consumers cannot buy locally. However, other factors, such as extraordinarily high local costs, can also drive consumers to ecommerce in droves. For example, in Brazil, consumers find that there are many products that they can buy less expensively online than through their local stores and ecommerce is booming. Step Two: Test the waters Before you dive in, you may wish to consider low-risk, low-cost ways to test global demand for your wares and become better prepared to navigate the logistical challenges of international ecommerce. A number of retailers have set up storefronts on online marketplaces, launching a subset of their catalogues there to see who shops, who buys and which products are in greatest demand. This approach enables them to gain considerable insight into both opportunities and processes. If you need to build international awareness, want a clearer measure of market demand, or just want to get to market quickly, these types of solutions may provide you with an easier entry into international markets. This can help you shape a strategy to meet the needs of your business. Step Three: Help ensure cost-effective, quality service Online consumers can be price sensitive. Our research shows that the majority cite price as the most important factor in purchasing products online, and high shipping costs as the most common obstacle to completing a purchase online. Therefore, it s critical to find cost-effective shipping options. Consumers expect online shopping to be simple. Products should be easy to find. Pricing, including shipping costs, taxes and duties, need to be fully spelled out. Delivery-date estimates should be accurate. The process for returns and after-sales service should be clear and easy to understand. Offering consumers different shipping options with different 1 June 27,

4 price points lets them choose the speed of delivery they re willing to pay for. Consumers appreciate the control this gives them, and it s an excellent way to manage delivery expectations. At the same time, consumers want service that s reliable. Since delivery issues can clog your call centers and potentially damage your brand, you do too. The true challenge in international delivery is in finding and managing the best options for each destination. Local postal administrators establish rules in each country that dictate how shipments must be addressed and prepared. Each country has its own import and export laws. There are even specific laws within different countries when it comes to what can and cannot be shipped. For example, Brazil excludes canes and umbrellas, Sri Lanka prohibits leather goods, Italy bans bells, clocks and playing cards, and China prohibits walkie-talkies, wrist watches, cameras, bicycles and sewing machines. Taxes, duties and tariffs; size, weight and value limits also impact shipping and costs. considerations include handling payments in the currency preferred by shoppers, and offering a clear, easy-tounderstand process for returns and after-sales service. The benefits of working with a global ecommerce solutions provider are three-fold: International ecommerce solutions and cross-border parcel services providers can minimize upfront investment for the retailer, delivering the necessary technology and services on a revenue-share basis These providers offer a level of established expertise across countries and carriers and built-in processes to help ensure that they stay up-to-date on the latest changes and challenges in parcel shipping to as many as 200 different countries and territories These solutions help to increase speed-to-market, lower costs and create online shopping experiences that encourage international consumers to shop time and time again By using a global ecommerce solutions provider with international shipping solutions, U.S. retailers can ship packages and parcels to centralized facilities within the U.S. The third-party providers take it from there, shipping packages cost-efficiently to their destinations around the globe. Retailers can benefit from streamlined shipping processes and gain a partner that can help them avoid the pitfalls inherent in international shipping. From keeping up-to-date on restricted products, to managing import/export compliance, to providing full track-and-trace capabilities for shipments worldwide, global ecommerce solutions providers can help make international buying and shipping run smoothly. Some retailers turn to a single high-cost carrier who provides door-to-door service. Others try to manage the different import and export rules, regulations and requirements on their own by building in-house capabilities. But, increasingly, U.S. retailers are turning to global ecommerce solutions providers to help them create a seamless online purchasing and shipping experience for consumers, reduce the challenges associated with international ecommerce, and grow their businesses. This includes helping to calculate shipping costs, taxes and duties up-front during the online checkout process to provide clarity to consumers on what they are paying for. Displaying fully-landed costs upfront helps ensure there are no surprises for buyers with additional fees at the time of delivery. Also, offering reasonable shipping costs and providing accurate estimates on delivery dates are important. Other The time is now The shift is on. Ecommerce is changing the shape of retailing worldwide, and retailers need to move swiftly to stake their claims in this fast growing marketplace. Along the ecommerce continuum, most U.S. retailers have already decided if they want to be global or not. For those who have decided to go global, knowing their product catalogue, having the right solutions and services in place to expand into international markets, and providing the best international online shopping experience for consumers will help lead the way to the right road to travel on for global ecommerce success. For more information, visit 4

5 For more information Call: 855-PB-ECOMM or visit us online: pb.com/ecommerce 2014 Pitney Bowes Inc. All Rights Reserved. An equal opportunity employer. Pitney Bowes and the Corporate logo are trademarks of Pitney Bowes Inc. or a subsidiary. All other trademarks are the property of their respective owners. 14_PBS_05064