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E-commerce creates new customers around the world

A woman holding a credit card talks on the phone.

Retail has gone global. The dynamics of the retail landscape are shifting as consumers around the world leverage the power of e-commerce to buy from online international retailers.

Almost half, or 47 percent, of U.S. online shoppers reported that they made a purchase from an international retailer within the past year, according to the 2017 UPS Pulse of the Online Shopper, a survey of 5,000-plus avid online shoppers about their purchasing behaviors. That's an increase of4 percentage points from 2016.

And the internet is the game changer. E-commerce is leveling the playing field, making many retailers well-positioned to move beyond a brick-and-mortar presence to sell nationally--and internationally. "Shoppers are becoming more comfortable purchasing from international retailers and are willing to test the waters with less-familiar brands in their search for unique products and lower prices," the study reports.

Not only are U.S. shoppers purchasing globally, but shoppers around the world are doing the same. In the 2015 UPS global study, 24 percent of all purchases made by shoppers worldwide were with retailers outside of their own country. Leading the way in these international purchases: U.S. retail sites.

"Shopping online globally is as easy these days as shopping from a retailer up the street. The challenge for retailers is to be found online by global shoppers and then to have an easy, in-language customer experience," says Louis Dejianne, marketing director at UPS.

While this shift creates an ever-growing market for U.S. retailers, it also fosters international competition that is putting pressure on prices around the globe. According to the survey, U.S. retailers can capitalize on these trends by combining competitive pricing with personalized shopping experiences--keys to gaining shoppers worldwide.

Testing the waters

Global e-marketplaces, where retailers are aggregated into one website, are helping to blur international borders. By providing credibility and access to established customers, these online marketplaces offer retailers an opportunity to expand their reach and tap into new markets. In fact, the number of online shoppers making marketplace purchases rose 12 points last year, reaching an almost universal penetration rate of 97 percent in the U.S., according to the 2017 UPS survey.

What's driving this trend? Among those surveyed, 37 percent of Millennials and 39 percent of those who purchase by smartphone expect to increase their researching and buying of products on e-marketplaces. And as shoppers make these diverse and specialty destinations their go-tos, today's retailers have an unprecedented opportunity to interact with and engage consumers from around the world.

"The lines that separate domestic and international retailers continue to disappear," says Alan Gershenhorn, chief commercial officer at UPS. "Retailers are now competing across the globe."

Secrets to (retailer) success

As e-commerce growth stretches worldwide, U.S. retailer success hinges on adapting to and delivering on changing consumer expectations. Retailers must provide personalized shopping experiences at every point of engagement. That means, for example, connecting in a customer's native language throughout the online shopping experience. And at checkout, all pricing should be clearly stated, including duty and shipping costs, with all prices in the consumer's home currency.

Also, retailers should recognize the growing strength of e-marketplaces and explore selling products via these online channels--as almost 40 percent of shoppers start their searches there, according to the survey. They should also consider providing free or discounted shipping options, because the survey indicates that's a key consideration for customers purchasing from a marketplace versus a brick-and-mortar store. Interestingly, 1 in 6 online shoppers reported making a purchase in the U.S., then shipping it internationally.

Ultimately, e-commerce is a doorway to global growth for retailers. By listening to the demands of online shoppers, retailers have an opportunity to usher international customers across the threshold, opening the way to new marketplaces and sales.

To gain more insight into how evolving consumer behaviors are influencing the international retailer landscape, download the 2017 UPS Pulse of the Online Shopper study.

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