With inflation and the cost-of-living crisis taking its toll across the globe, the combination of macroeconomic conditions and access to a growing eCommerce market has acted as a catalyst for cross-border growth. According to a recent survey, consumers are now making regular international purchases, driven by their search for better value. In fact, around half of consumers shop outside of their domestic markets regularly. Younger buyers are leading the charge as the category most likely to shop beyond borders. 71% of Millennials do so up to several times a year, followed by 60% of Gen Z shoppers. Additional reports claim that a third (33%) of global eCommerce will be cross-border by 2028.
With consumers more willing to look further afield for the best deal, competition online is growing increasingly fierce. Many customers who once felt a strong loyalty to local brands have to put their sentiments aside as disposable incomes get tighter. That said, as cross-border shopping accelerates, these same brands have the opportunity to capture alternative audiences from across the world while new brands entering the global market have the chance to engage with UK shoppers.
Being in the position to reap the rewards that cross-border retail has to offer can require significant groundwork. Investing in such a capability can be a daunting concept in an uncertain economic landscape. Cross-border expansion requires a well-thought-out strategy geared for growth and underpinned by flexible operations that provide ultimate agility.
Taking a strategic approach to reflect demand
As brands and retailers seek to grow their business, expanding cross-border eCommerce into international markets is critical in today’s global economy. However, supporting the unique requirements of selling internationally and localizing operations to different markets is not a simple task. Identifying levels of demand and establishing which stage of international expansion your brand currently sits at is an important starting point. From here a strategic approach can be built to support and grow your presence.
As brands expand internationally, they need to adopt a more localized approach to fulfill an increasing number of international orders. This includes website localization, streamlined payments, and efficient order processing. Global brands may benefit from setting up multi-node fulfillment centers for quick international deliveries.
Solutions that scale
A multi-node fulfillment network spreads out inventory across multiple distribution centers, providing a contingency plan if an unexpected event occurs at one location. When combined with a Distributed Order Management (DOM) solution, orders can be routed to the appropriate DC based on the final delivery destination.
Pop-up DCs are one way brands can advance their international expansion goals. Brands can use these facilities to distribute inventory to different regions for faster last-mile delivery, reducing costs and delivery time while enabling them to test new markets. Brands can also use these DCs as additional relief to a primary fulfillment center in response to growth. Pop-up DCs can be deployed within a store’s stockroom, a dark store, or a traditional warehouse setting. With omnichannel order-picking tech, brands can fulfill online orders using existing store inventory, enabling a hybrid store model.
Navigating cross-border eCommerce complexity
Processing international orders requires fulfilling complex VAT reporting requirements, which causes hesitation for brands looking to expand across Europe. Despite Brexit being in the past, managing VAT tax requirements for European eCommerce fulfillment remains a challenging task.
Implementing a Merchant of Record (MoR) via a third-party logistics provider (3PL) can relieve retailers of VAT challenges. The MoR purchases the product from the retailer after the customer clicks ‘buy now’, transferring ownership and tax responsibilities. This eliminates the need for retailers to register for VAT in multiple countries and removes the headache of VAT administration.
A qualified 3PL should be able to help brands overcome barriers to international customer reach. Whether that be within Europe, North America or beyond. Going global is certainly no mean feat, but with the right strategy, infrastructures, and expert partners behind you – the opportunities are endless.