FX International Payments
By Zack Andresen
A prior article explored import-export e-commerce trade growth in detail, but the gist is that e-commerce if growing at about three times the rate of retail sales in general,1 and cross-border e-commerce is expected to grow at twice the rate of domestic e-commerce through 2020.2 Of note, an early 2017 report from The American Association of Exporters and Importers (AAEI), produced in conjunction with Amber Road (a global trade management software provider), found that 75 percent of companies surveyed had already established online sales channels. And of the remainder, 65 percent assert that they will establish web sales soon.3
But to be clear, there’s a fundamental difference between dipping one’s toe in the import-export e-commerce trade pool and preparing for the tidal wave that’s beginning to sweep its way across global trade. That’s why the report also provides businesses with guidance on how to get ahead of potential import-export trade issues in order to maximize profits from global transactions and minimize disruptions to customer experience and brand reputation.
According to an analysis by website The Future of Customer Engagement and Commerce (sponsored by e-commerce business software provider SAP Hybris), as major e-commerce retailers like Amazon.com continue to redefine consumer convenience through programs like Prime and Amazon Now, all import-export trade businesses – B2B and B2C alike – need to improve customer experience.4 Changes can be felt most acutely in the retail sector, but the customer experience trend extends into all areas of cross-border e-commerce.
It’s no coincidence that Deloitte’s annual Global Powers of Retailing report for 2017 bears the subtitle, “The art and science of customers.” Despite the report’s strictly retail focus, the opening nicely summarizes a key message for all import-export trade businesses: “We are living in an era where customers are in the driver’s seat more than ever before and they are craving authenticity, newness, convenience, and creativity. We are living in the customer-driven economy.”5
It’s that “convenience” piece that can make or break businesses making the leap into import-export e-commerce. Consumers want access to products from around the globe and they expect fast, hassle-free fulfillment. That expectation puts the weight of managing the logistical nuances of global trade regulations square on the shoulders of the seller. And getting it right matters quite a bit.6
That means import-export businesses that want a piece of the proverbial e-commerce pie need to nail down their behind-the-scenes processes to create a seamless customer experience regardless of whether their customer sits 50 or 5,000 miles away.7
The AAEI report focuses on this point. It delves into the need for well-defined processes to enhance the customer experience, but also highlights the slim margins of profitability in import-export trade when businesses start making mistakes. Sixty-eight percent of survey respondents that move over 10,000 containers annually have an individual transaction price below $100. Pair that with the fact that 60 percent of respondents faced either regulatory penalties or shipping/transportation challenges, and one can see how thin the line is between profitability and loss in global trade.8
That’s why, according to the report, any business dealing in import-export transactions needs to focus on a few key areas in order to maximize profits and solidify brand reputation. First, is the ability to quickly and reliably classify goods using the International Harmonized System (HS) based on product classification and both the country of export and import. Customs require an HS code for cross-border trade to properly classify products. To provide the best customer experience, these should be available at the time of purchase.
Next, is accurate cost calculations for shipping costs (including taxes and duties) built directly into a business’s online store. Consumers want to know the total cost at the time of purchase - delayed or adjusted fees lead to a negative customer experience.
Import-export trade businesses will also want the ability to screen for any restricted items at the point of purchase. As products are moved on and off sanctioned party lists frequently, up-to-date alerts on compliance changes ensure products don’t get caught in Customs (and help businesses avoid the associated fines, too).
Finally, there’s real-time shipment tracking (from package preparation all the way through to delivery). Customers want the ability to track their purchase from the moment they place the order to the moment it arrives at their doorstep.9
E-commerce is changing the way businesses operate, including with regard to customer experience. With consumer demand for a top-notch customer experience at an all-time high and the margins of profitability fairly slim, experts recommend businesses dealing in import-export trade work to maximize the efficiency of their fulfillment processes to remain competitive.
Zack Andresen is a business technology writer based in Brooklyn, NY, whose work has focused primarily on Software-as-a-Service (SaaS) technology.
1.“Worldwide Retail Ecommerce Sales Will Reach $1.915 Trillion This Year,” eMarketer; https://www.emarketer.com/Article/Worldwide-Retail-Ecommerce-Sales-Will-Reach-1915-Trillion-This-Year/1014369
2.“Cross-border e-commerce is one of the fastest growth opportunities in retail, according to DHL report,” DHL; http://www.dhl.com/en/press/releases/releases_2017/all/express/cross_border_ecommerce_is_one_of_the_fastest_growth_opportunities_in_retail_according_to_dhl_report.html
3.2016 AAEI e-Commerce Benchmark Report: e-Commerce Impacts Global Trade, American Association of Exporters and Importers; http://info.amberroad.com/rl_WhitePaper_AAEIeCommerce2017BenchmarkReport_LandingPage.html
4.“The B2B e-commerce customer experience is not what you think,” The Future of Customer Engagement and Commerce; http://www.the-future-of-commerce.com/2017/05/08/the-b2b-e-commerce-customer-experience-is-not-what-you-think/
5.Global Powers of Retailing 2017: The art and science of customers, Deloitte; https://www2.deloitte.com/content/dam/Deloitte/global/Documents/consumer-industrial-products/gx-cip-2017-global-powers-of-retailing.pdf
6.2016 AAEI e-Commerce Benchmark Report: e-Commerce Impacts Global Trade, American Association of Exporters and Importers; http://info.amberroad.com/rl_WhitePaper_AAEIeCommerce2017BenchmarkReport_LandingPage.html