Saturday February 24, 2024

Trust and transparency are key in trillion-dollar cross-border market, delivery experts say

DHL eCommerce workers in a Dutch warehouse
DHL eCommerce workers in a Dutch warehouse

Trust, transparency and accuracy are key to success when trying to conquer the fast-growing trillion-dollar cross-border e-commerce market, experts stressed at The Delivery Conference in London this week.

“Cross border e-commerce is a huge market,” said Ryan Hunter, SVP of Global Sales at DHL eCommerce, in a panel discussion. “And currently it is growing faster than domestic e-commerce. To be successful in this sector from a delivery perspective, it is important to create trust with brands and consumers.

“It is all about matching the right expectations with the right service – whatever your customer is expecting, you need to deliver that. Learning from data can help here,” he added.

A growing market

According to figures from Statista, the global B2C cross-border e-commerce market is expected to reach a value of US$7.9 trillion by the year 2030.

Max O'Brien. Regional Sales Director at cross border platform Global-e, which works with more than 1,500 brands to enable DTC global e-commerce, said: “Don’t wait for the right time to enter this fast-growing market – now is the right time.”

Highlighting the challenges that need to be considered when operating in the cross-border space, he continued: “There are nearly 200 countries around the world to sell into. It’s important to remember that one size does not fit all. Customers require different service levels in different countries and there are various tax and customs regulations that need to be considered – compliance can be tough.”

Speaking from a retailers’ perspective, Carolyn Park, Vice President of Supply Chain Optimisation at RS Components – a global provider of industrial and electronic solutions, noted that despite these challenges, carriers need to help brands “make selling internationally as simple as selling domestically.”

She added: “Consumers shouldn’t even know goods are crossing borders. Accuracy is one of the important things to get right if you want to achieve this. And data can help with this – goods can flow smoother if we get the data right.”

Park also said that retailers need more support from carriers to help them be successful in the “challenging cross border market.”

Getting comfortable with cross border

DHL eCommerce’s Hunter noted how more and more consumers globally are buying cross border with the firm’s recent Global Online Shopper Survey 2023 revealing that on average, 55% of the world’s shoppers are now happy to buy cross-border.

The survey also revealed that customers in MENA are the most adventurous, with 67% shopping abroad. And in Europe, shoppers in Poland, Austria and Sweden are more likely to buy cross border than shoppers in other European countries.

“This survey helps us understand how shoppers are behaving,” he said. “Last year it revealed that an increasing number of people around the world are getting comfortable with cross border.”

DHL eCommerce investments

To capitalise on the market’s growth and support retailers, DHL eCommerce is investing in its infrastructure, service quality, capacity, sustainability and efficiency, Hunter noted. “We are also investing in new products, hubs and technologies. For example, our new hub in Coventry, UK, will help us optimise the UK network and improve capacity and efficiency,” he said.

Construction of the new 25,000m² Coventry hub, is expected to be completed in summer 2024. It will have the capacity to handle well over 500,000 items per day and will feature secure bonded storage and customs capabilities to support international e-commerce.

“We have also just opened our new international logistics center in Poland,” Hunter explained. “Poland is a great country to serve European customers from due to its location. This hub enables us to access networks much further downstream, which improves efficiency.

“We are also investing in PUDOs and lockers – this is a mega trend burning like wildfire currently. We had 100,000 locations at the end of 2023, and this will grow to 120,000 by the end of this year. Overall, we are spending a lot of money to make sure we get cross border delivery right,” he concluded.

Returns and sustainability

Other key considerations when shipping cross border, according to Hunter, include returns, sustainability and personalisation. For the former, a free and simple returns policy would encourage 49% of those surveyed in the Global Online Shopper Survey 2023 to buy cross border.

“Returns are a complex issue and can be a major pain point,” said Hunter. “To be a successful brand in cross border, you need a clear returns policy.”

In terms of personalisation, Hunter noted that AI could help drive this and augmented and virtual reality could also help brands and carriers to better connect with the consumer to build trust.

And finally, sustainability is an increasing concern for consumers shopping cross border. DHL eCommerce is working to reduce its impact on the environment internationally. The firm aims to be carbon neutral by 2050 and will be investing €7 billion in directly reducing carbon emissions by 2030.

“We are also investing heavily in sustainable aviation fuel, as our aviation network emits 90% of our total emissions,” explained Hunter. “Also, our last mile fleet will be 60% electric by 2030 and we have even purchased 12 electric aircraft, which are currently being tested and are due to enter service in 2027,” he concluded.

SourceThe Delivery Conference, DHL eCommerce, Global-e, RS Components, CEP-Research

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