The global ecommerce opportunity offers new customer bases, bigger revenues and unbridled growth for retailers who are ready to grasp it. Consumers all over the world are now so comfortable with online purchasing they’re increasingly buying from retailers outside of their home countries, with the result that cross-border ecommerce is now growing at twice the rate of domestic ecommerce.
With 2.26 billion digital buyers worldwide in 2020 alone, these figures bode well for any business engaged in selling online. But even though brands are eager to embrace this opportunity, their ability to go global could be hamstrung by ignoring localized operational considerations.
Offering an easy and frictionless consumer payment experience, no matter where in the world the consumer is, requires many moving parts. With cross-border payments growing so rapidly, the importance of offering localized payment methods and prices in the customer’s preferred currency cannot be stressed enough.
In the rush to stake their claim in the global ecommerce marketplace, many businesses lose sight of the fact that selling globally needs to be tailored locally. Consumers are not constricted by geographic borders in their purchasing decisions, but still many retailers are operating without fully optimizing their processes to take advantage of this.
Localization is a competitive stand-out for businesses
Around 70% of customers prefer prices to be displayed in their local currency, and 30% would leave a retailer’s site if it wasn’t available. If their preferred payment methods aren’t displayed, up to 50% of customers will leave the retailer’s website. How many retailers can afford to wave goodbye to that amount of lost sales, something which could have been easily implemented at checkout?
With the ecommerce landscape becoming more competitive every day, and businesses jostling for position, the retailer that offers the most frictionless payment experience will stand out from their rivals. That means offering localized payment methods, and optimal foreign currency exchange conversions.
Founded in Calgary in 2016, Reach is the premier partner for ambitious, forward-thinking online brands that want to connect with consumers around the world, expand their business, and increase global sales.
Fears over high currency conversion fees can make retailers hesitant to sell cross-border. Confusion over which payment methods to offer at checkout, and local regulatory considerations, bring added complexities, which some brands find difficult to overcome by themselves. Many payment providers promise access to a wide range of currencies, localized processing, and global payment methods to help retailers increase the number of international customers.
However, the only way retailers can access localized processing is to establish a physical presence in each market, and that requires large upfront and ongoing investment and resources. That’s not to mention the challenges of dealing with local taxes and regulations in each market. And when you add in the intricacies of managing currency and pricing strategies, and the need to continually monitor them to optimize currency conversion, many retailers find these obstacles insurmountable, resulting in them being forced to process transactions cross-border.
Cost-effective localization can be achieved
To benefit from full localization, the right Merchant of Record (MOR) provider will offer optimal direct-to-market currency rates, and take care of multiple payment methods with ease through intelligent payment technology platforms.
Through such solutions, there is no need for a retailer to establish a physical presence in each market they sell into, nor do they need to negotiate with different currency providers for the best rates. The right provider will manage these workloads on behalf of the retailer, leaving them free to focus on their customers – wherever they are buying from.
Ultimately, the retailer enjoys higher conversion rates, lower risks, reduced business costs, and a simplified customer payment experience. These are strengths that will underpin any retailer’s growth strategy, and set them on the path to even bigger success in the future.
A veteran of the payments industry, Matthew arrived at Reach six years ago, bringing with him more than a decade of experience across some of the world’s leading brands, including Global Collect (now Worldline).
His understanding of the global complexities in the payments arena provides Reach with unparalleled insight into worldwide marketplaces and hyperlocal territories.