The new markets available today open up a world of possibilities for retailers, but not without some challenges. With many geographic borders coming down, how does this new global economy affect your business? Are consumers exploring these cross-border buying opportunities, or does “Made in America” still appeal to the masses?
Together with IPSOS, we surveyed American consumers about their attitudes toward global products, where they buy, and reasons why they may not buy. The results give retailers insights into expanding their businesses globally, how to prepare for increased competition from non-US companies, and marketing strategies that can have you selling skis to the Swedish in no time.
Strategies for Merchants and Marketers
If you’re a US retailer, now’s the time to prepare for increased competition. Three-quarters (77%) of US consumers are open to cross-border commerce. To defend against these potential poaching threats, focus on the reasons why consumers said they stray: unique merchandise (61%) and better pricing (55%).
“Buy local” is trending. And that can mean much more than the produce grown in your own backyard. Look for ways to exploit the advantages of the home territory to make buying locally more attractive. For instance, if you have brick-and-mortar locations, play up your assets and create marketing campaigns around opportunities to offer ‘buy online, return in-store’ options for added customer convenience.
The top three barriers to shopping globally, as identified by US consumers, were shipping costs, delivery time and distrust of online payment methods. So take heed! Ship quickly and cheaply, make sure your transactions are secure, and highlight these benefits loudly and early in all communications.
America’s Big Appetite for International ShoppingMore than three-quarters of Americans would consider purchasing online from another country, with 42% of US adults having already done so and another 35% open to the idea.
Who’s Reaching US Consumers Now?
While Americans seem open to the idea of international commerce, the research shows that merchants from most non-US countries have failed to tap into the large market potential. But China seems to be making inroads, with 56% of American purchasers having already bought from a Chinese retailer, followed closely by the UK (27%), Canada (20%) and Japan (19%).
This gap between those consumers open to purchasing from another country and those actually doing so represents a great opportunity for international retailers to gain market share and, at the same time, poses a potential threat for US retailers to lose consumers to other regions.
Opportunities for International Merchants
Identified by two-thirds of US consumers, the single greatest barrier to international commerce was shipping costs, followed by a host of other issues as outlined below. While this might be considered good news for US retailers, international merchants can put measures in place to overcome these barriers and encourage business with US customers, playing to their strengths of offering more choice and better prices.
According to most economic theory, the rising tide of globalization lifts all boats. But with cross-border commerce, the opportunities and challenges become more complex. The freedom of choice consumers now have means marketers must step up their game, whether you’re a retailer in the US looking to expand globally or a non-US merchant seeking to capitalize on American buying power.