Expanding your business across international borders can be enormously rewarding – and a huge challenge. It’s important to find ways to differentiate yourself from competitors, and to establish your brand values and service levels so that they are clear to potential customers.

An international returns policy has an important role to play in supporting cross-border expansion and could be crucial to achieving growth goals.

What is cross-border Ecommerce?

Cross-border Ecommerce is trade between two parties in different countries. That trade could be between a business and a consumer or two businesses, for example, or it could be transactions between two consumers, such as those made via eBay. Cross-border Ecommerce is a growing phenomenon across the world and represents opportunities for retailers in every country. For example, nearly half of French consumers now regularly buy from cross-border retailers and in Mexico the market for cross-border Ecommerce is growing by 21%. It’s estimated that by 2020, 60% of the target global population will be making more than 13% (source: Ecommerce Platforms) of their retail transactions online.

The benefits of cross-border Ecommerce

There are multiple benefits for consumers in shopping cross-border, including having access to a much wider range of products and being able to find those products at the best price. Local shoppers unimpressed with local retailers can go online and look elsewhere for a better option. This presents retailers who are willing to invest in cross-border Ecommerce with a range of very attractive advantages, including:

• Increasing the size of overall customer base.
• Accessing incredibly lucrative international markets – in China, for example, cross-border Ecommerce is worth $60 billion.
• Increasing revenue – although there are costs involved in cross-border Ecommerce the potential for exponentially increasing revenue is huge.
• Finding new buyers for existing products or services that domestic customers may not have been that interested in – older or less profitable lines could do incredibly well in new locations.
• Expanding brand awareness across borders, with the ultimate aim of creating a truly global brand.
• Improving business sustainability – successful cross-border expansion can make a business more resilient to the impact of events on domestic economies.
• Avoiding seasonal slumps. Global sales help to avoid the restrictions of the seasons on products that arise if they are sold only into the domestic market. For example, there will always be a demand for ski wear or swimwear somewhere in the world, even when it’s out of season locally.

Why you should offer returns to your cross-border customers

Successful cross-border retailers understand that establishing a foothold in a global market requires more than simply setting up a website and international shipping. Although customers in different locations have different preferences when it comes to customer service and delivery, the availability of returns is a consistent requirement. Customers are increasingly used to being able to make hassle free, low cost returns in their own countries and so expect international retailers to offer these too. These are just some of the reasons why you should offer returns to your cross-border customers:

• You could lose potential sales if you don’t offer cross-border returns. Around a third of cross-border transactions are estimated to be abandoned as a result of issues with returns and fees.
• Return policies have a clear impact on purchasing decisions and help to establish trust between consumer and brand.
• A solid returns policy is a great way to differentiate your brand from the competition. For example, in Asia just 36% of online customers were happy with their existing experience of return or exchange – that leaves a lot of room for improvement and an opportunity for brands with customer-friendly returns policies to win new business.
• Customers are much more likely to buy again from a brand after a positive returns experience – customer-friendly international returns can be an effective tool in converting a one time customer into a loyal, repeat buyer.

It’s important for retailers to recognise that shoppers take a much bigger risk when ordering from overseas. A transparent and easy to understand returns policy helps to establish peace of mind, build trust and positively impact purchasing decisions.

Sources: Ecommerce Platforms/Bloomberg/UPS/SDCExec

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