Cross-border Strategy & Success Dr. Jesse Weltevreden, Sjoukje - PowerPoint PPT Presentation

Cross-border Strategy & Success Dr. Jesse Weltevreden, Sjoukje Goldman MSc, Julia Keuter BA 1

Cross-border Strategy & Success 1. Drivers & Barriers 2. Localisation & Performance 3. Desk-research 2 2

Confidence in domestic and cross-border online shopping among e-shoppers Domestic online shopping Cross-border online shopping _______________ _______________ _______________ ____ Source: GfK (2017) @ jweltevreden 3

Most important concerns when shopping online domestically and in other EU countries Cross-border intra-EU Domestic 1.High delivery costs 1. Misuse of personal data 2.High return shipping costs 2. Wrong or damaged products 3.Difficult to solve problems if 3. Theft of payment card details something goes wrong _________________________________________________ Source: GfK Belgium (2015) 4 4

Cross-border e-commerce 88% 77% 75% 55% 54% Cross-border selling Only after contact by e-mail/phone Domestic selling _________________________________________________ Source: Amsterdam University of Applied Sciences 5 5

Cross-border Web visitors 33% 31% 23% 20% 13% Cross border Web visitors Domestic Web visitors 6 6

Cross-border Web visitors Top 3 Top 3 Top 3 Top 3 Top 3 United States Netherlands Austria Belgium Belgium India France Switzerland Switzerland Germany France United Kingdom United States United States United States Cross border Web visitors Domestic Web visitors 7 7

Data Online survey among online shops in 31 European countries Response: 430 European online shops Respondent’s role in company Region Annual no. of Web visitors Cross-border or domestic Southern 1M or more Other Northern Europe Less than Europe 10,000 Domestic E-commerce 100,000 to Owner manager 1M Western Europe Cross-border Director Eastern 10,000 to Co-owner Europe 100,000 8 8

32% HELP! of the online shops that say only to We’ve got a foreign sell domestically, offer the customer! possibility to order from abroad 9 9

Drivers & Barriers 10

Drivers to further increase sales from foreign countries* 1. Growth opportunities 2. Foreign customer demand 3. Good past experiences with selling online to foreign countries _________________________________________________ * Only cross-border online shops are included 11 11

Barriers for (further) online expansion to other countries* Logistics Domestic agenda Limited recources Legal/Taxation Risk of fraud Foreign partners Foreign languages 1 4 7 Purely domestic online shop Cross-border online shop _________________________________________________ * 7- point scale, ranging from ‘Not at all’ to ‘Very much’ 12 12

Cross-border e-commerce strategies Growth orientation • Grow is necessary to succeed in the future • Company’s aims can only be achieved through further growth Foreign market orientation • Knowledge about how to market products to foreign markets • Online sales strategy considers differences between the home market and the foreign markets • Having people in the company with experience in foreign markets 13 13

Localization & Performance 14

Cross-border E-commerce Success Localization elements positively affect cross-border traffic! But, to what extent do localization elements boost cross- border online sales and other KPI’s? shop.co.uk shop.fr 15 15

5 KPI’s 1. Conversion ratio 2. Average basket value 3. Online turnover 4. No. of Returning customers 5. Average return rate 16 16

5 KPI’s Relative performance measures: Was the average conversion ratio of foreign customers higher or lower than the conversion ratio of customers from your home market in the past 12 months? 1 2 3 4 5 6 7 Much lower Equal Much higher 17 17

Effect of Language switch on cross-border performance compared to domestic performance 7,0 Much higher 6,0 5,0 Equal 4,0 3,0 2,0 Much lower 1,0 Conversion ratio Online turnover Average basket value No. of returning Average return rate customers No language switch Language switch 18 18

Effect of offering English language on cross-border performance compared to domestic performance 7,0 Much higher 6,0 5,0 Equal 4,0 3,0 2,0 Much lower 1,0 Conversion ratio Online turnover Average basket value No. of returning Average return rate customers No English language offered English language offered 19 19

Effect of Currency switch on cross-border performance compared to domestic performance for specific KPI’s 7,0 Much higher 6,0 5,0 Equal 4,0 3,0 2,0 Much lower 1,0 Conversion ratio Online turnover Average basket value No. of returning Average return rate customers No currency switch Currency switch 20 20

Effect of Order information for foreign customers on cross-border performance compared to domestic performance 7,0 Much higher 6,0 5,0 Equal 4,0 3,0 2,0 Much lower 1,0 Conversion ratio Online turnover Average basket value No. of returning Average return rate customers No order information for foreign customers Order information for foreign customers 21 21

Effect of Return information for foreign customers on cross-border performance compared to domestic performance* 7,0 Much higher 6,0 5,0 Equal 4,0 3,0 Much lower 2,0 1,0 Conversion ratio Online turnover Average basket value No. of returning Average return rate customers No return information for foreign customers Return information for foreign customers _________________________________________________ * Results are indicative, due to limited number of cases. 22 22

Marketing activities by cross-border online shops to attract foreign customers Do not conduct specific marketing activities to attract foreign customers 23 23

Marketing activities by cross-border online shops to attract foreign customers Search Engine Optimization (SEO) 42% Search Engine Advertising (SEA) 29% Advertising on (inter)national price comparison websites 17% Bannering 15% Advertising on international online marketplaces like e-Bay or 14% Amazon.com Affiliate Marketing 13% Advertising in the foreign press and broadcasting media 3% 0% 10% 20% 30% 40% 50% 24 24

Effect of SEO for attracting foreign customers on cross-border performance compared to domestic performance 7,0 Much higher 6,0 5,0 Equal 4,0 3,0 2,0 Much lower 1,0 Conversion ratio Online turnover Average basket value No. of returning Average return rate customers No SEO SEO 25 25

Effect of Affiliate marketing for attracting foreign customers on cross-border performance compared to domestic performance 7,0 Much higher 6,0 5,0 Equal 4,0 3,0 2,0 Much lower 1,0 Conversion ratio Online turnover Average basket value No. of returning Average return rate customers No Affiliate marketing Affiliate marketing 26 26

Desk Research 27

One week challenge: Cross-border e-commerce Dimitri Arts – Under Armour Europe Erwin Hammers – Noppies Alvar Piepers - Paazl 28 28

Desk-research 1. Demand from the market 2. Supply to the market (competition analysis) 3. Online buying behaviour 4. Search Engine: keyword research 29 29

Advice to Under Armour about Lithuania 1. Transparency regarding return policies, product descriptions (the products are very innovative) and prices 2. Select the national postal service of Lithuania to partner with, to win the trust of Lithuanian people 3. Add delivery options: delivery at postal office and at parcel lockers 4. Add payment options: also cash-on-delivery 5. Offer free delivery 6. Use ratings from other e-shoppers, Lithuanian people like that 7. Promote the UA app: high rate of e-shoppers via smart phone 8. Focus on Facebook: 57% social media share in Lithuania 30 30

More need for cross-border e-commerce data from Europe? Make your own data selections using our free, interactive online dashboard! Cross-border e-commerce adoption Average cross-border traffic share Country of origin of cross-border traffic Localization features Drivers & Barriers Cross-border performance And more… www.cmihva.link/cross-border-EU @ jweltevreden 31

Lack of ‘professionalism’ among many ‘cross - border online shops’ Online shops that are successful in cross-border e-commerce employ localisation elements Limited resources, domestic agenda and language issues are import barriers among cross-border online shops to further expand internationally Cross-border e-commerce is serious business that requires good strategy & planning 32 32

Contact us for more information Sjoukje Goldman MSc Dr. Jesse Weltevreden Julia Keuter BA PhD Candidate Professor Digital Commerce Junior Researcher s.p.k.goldman@hva.nl j.w.j.weltevreden@hva.nl +31 (0)6 21 15 78 08 +31 (0)6 10 15 32 68 33 33

Thank you for your attention! 34