Global business-to-consumer e-commerce is growing leaps and bounds. And the primary reasons for the booming growth include emerging markets where consumers often find it hard to access coveted products locally and are seeking the convenience of online shopping over brick-and mortar.
According to strategy and consulting firm, Accenture, global B2C cross-border e-commerce will balloon in size from $230 billion in 2014 to $1 trillion in 2020.
Most American small businesses, however, cannot always take full advantage of the surging market. Less than 1 percent of the 30 million American firms participate in cross-border sales, a figure lower than in many other industrialized nations. Managing cross-border sales is complex, expensive and risky if not properly executed, and small- to medium-size businesses (SMB) are underserved with fewer resources to handle the additional complexity.
This explosive growth has convinced many retailers to embrace e-commerce in order to fulfill the demands of consumers, who have all the power in today’s retail environment. However, global sales opportunities also present the challenge to deliver a positive customer experience while combating high shipping fees, hidden costs, inaccurate duties, import and export regulations, and product restrictions.
Last year, the U.S. Postal Service (USPS) published a report on cross-border e-commerce, identifying the “major challenges in global e-commerce centered on logistics, customs clearance, regulations, market visibility, security, and technology” and the organization’s inability to meet the expectations of international shippers. At that time, the USPS’s international business accounted for only about 1 percent of its total mail volume and scaling to grow with the e-commerce boom would not have been possible without technology investments.
Similarly, the International Post Corporation (IPC), the leading cooperative association for the global postal industry, released its 2016 Online Shopper Survey. This profound announcement from its Brussels headquarters clearly noted the need for postal organizations all over the world to improve technology in order to beat the prevailing private sector providers currently handling the bulk of international retail deliveries—DHL, FedEx, UPS and others.
For postal services to strengthen their competitive advantages in the cross-border e-commerce market, primary gaps must be addressed with a combination of technology, trade compliance knowledge and automation. On the highest level, postal services need these key building block capabilities to build out an e-commerce infrastructure:
• An ability to help retailers properly classify goods based on descriptions from their product catalogs and the desired country of import
• Screening tools to determine if a party to the transaction is on a sanctioned party list, or if the goods being shipped are prohibited or restricted in any way
• Automation tools for merchants to determine if their shipment qualifies for a low value shipment, or to calculate and support a deliver duty paid shipment model from a shopping cart
• Reliable, real-time order and logistics tracking systems for customers and customer support teams to monitor delivery to the final customer or door location
E-commerce is a chief driver for global economic growth for many companies, small and large alike. The ability of postal services to address this growth opportunity, beyond the meager 1 percent of total mail volume handled today, requires the implementation of global trade management technology that can put the posts on equal footing with competitive e-commerce delivery providers. For more on frictionless e-commerce see this Aberdeen Group report.
By Nathan Pieri, chief product officer, Amber Road