09 September 2022
Going global with your ecommerce fulfilment strategy: a quick guide
Driven by the convenience of quick deliveries and discount offers, consumers across the world are increasingly gravitating to online channels for their shopping needs. With more than 57% of internet users between the ages of 16 and 54 making a purchase online every week (Datareportal), the ecommerce sector has experienced accelerated growth worldwide. As a result, online sales are expected to represent close to a quarter of overall global retail sales by 2025, up from nearly 20% in 2021 (Statista).
While this shift to digital shopping channels has brought multiple challenges for brands, as they look to cater to a digital audience whose expectations around convenience and speed have been heightened, the rise of ecommerce has equally unlocked a spectrum of growth opportunities. Online commerce’s increasingly broad reach has opened the doors to international markets and audiences that had not been easily reachable before, paving the way for an easier and more seamless international expansion.
Planning the next steps of a multi-market expansion plan is an exciting and busy time for businesses; however, it can also lead to growing pains and unexpected challenges, especially when it comes to ecommerce fulfilment. Having stock available to cope with differing levels of demand across multiple locations, ensuring timely deliveries and communicating effectively on a multimarket, and often multilingual, scale can prove to be one of the most complex things to get right when developing a brand’s international presence.
If your brand is beginning to outline its global online journey, ensuring you put your ecommerce fulfilment strategy at the top of your priority list will open the doors to a smoother entry in new target markets. Continue reading to understand the key focus areas and top concerns when developing your global ecommerce fulfilment plan.
Why is ecommerce fulfilment important for effective growth?
While fulfilment might seem like a mere logistical issue, tied to things like inventory, warehouses and courier services, it is much more than that. A successful ecommerce fulfilment strategy is the backbone of solid brand growth and, more importantly, a vital piece of the online customer experience puzzle.
For example, in the UK, the convenience of home delivery, speed and ease of transactions and availability of a better range of products were the leading factors driving consumers to shop online rather than offline (UPS). Of these three, two (convenience of home delivery and availability of a better range of products) depend on the success and efficiency of your business’s ecommerce fulfilment strategy. This means that the right ecommerce fulfilment model, from deliveries to stock availability, is key in helping brands forge long-lasting customer relationships and essential in keeping your customers happy and coming back to your site for more.
While your brand may have its local fulfilment perfected down to the smallest detail, going global and catering to different audiences require a completely new and more carefully planned approach.
So where do you start?
Five tips to design a global ecommerce fulfilment strategy
1- Get to know your target market
Consumers’ needs and expectations vary widely around the world, as do social norms, customs and cultural conventions. Knowing your target consumer and truly understanding their specific wants and preferences will help you decide which areas of your fulfilment strategy you need to focus on.
For example, in a recent survey by PwC, only 10% of Japanese consumers said environmental factors such as commitment to reduce CO2 emissions or cutting down on plastic waste often or always affect their decision to pick a brand or product. Meanwhile, in India, this was a top concern for 44% of consumers.
Knowing these preferences in advance can help brands have a better grasp of the concerns driving consumer choices and pave the way for informed fulfilment decisions. For instance, investing in recycled and/or recyclable materials for packaging, carbon offsetting or alternative vehicles (such as electric cars or vans) for deliveries might be a good idea to attract Indian consumers, but it might not make as big a difference in the Japanese market.
In this sense, your fulfilment choices can make or break a purchase depending on the audience. Ask yourself key questions: are shipping costs a central issue for your target audience? How quickly do they expect to get their orders? A recent survey by McKinsey revealed that beauty consumers in the US usually expect to receive their orders in less than a day, while those purchasing electronics are happy to wait for slightly longer — less than two days.
However, expectations vary not only by segment but also, importantly, by location. For instance, UPS found in their Smart Ecommerce Report that, on average, 41% of European consumers said their online shopping experience had made them more likely to choose a retailer who uses a reputable delivery company. While this was a key concern across markets, it was not as critical to all of them: the proportion of respondents agreeing with this statement rose to 59% in Italy but dropped to 32% in Belgium. Knowing what sets your market apart from others, even those that share similar cultures, will help your brand understand what matters to your audiences and which areas of your fulfilment plan you need to prioritize.
And remember: while gathering this knowledge of the target locale might take considerable time and money, it’s one of the best things you can do for your growing brand. The information you collect about your prospective audience and market will not only inform your ecommerce fulfilment strategy but also a range of other key areas of your business, such as advertising and marketing, which are crucial for sustaining growth.
2- Choose the ecommerce fulfilment strategy to suit the stage of your business’s journey
An ecommerce brand’s expansion journey is made up of multiple steps and stages, and each has its specific set of needs and priorities that will shape the type of fulfilment strategy that works best for that particular moment.
For example, if your brand is just beginning to test the waters of international commerce, you are not ready to make a big investment and/or order volume is still on the low side, you might consider a cross-border fulfilment approach, with local warehouses and centers that ship to international locations. If your brand has the bandwidth and expertise to handle legal aspects such as duties, taxes and customs, you might think of doing it in-house and move to working with a larger logistics partner at a later stage, as demand grows.
However, there’s also key market-related factors to consider. Cross-border shipping times can be long: is your target audience ready to wait for more than just two or three days for their order to arrive? How will you manage the added costs of international delivery? Likewise, think about your product: how often do customers return their orders? Returns may not be as simple with a cross-border approach, so having a good idea of what the return rate beforehand is key. For example, according to a survey Statista, clothing was the online category with the most frequent returns in the US, with 88% of respondents reporting having returned items in this segment. Conversely, only 11% of respondents said they had sent back baby products.
Once your brand is more established in the global ecommerce game, with broader international audiences, and wants to scale at speed, a localized fulfilment approach, with multiple warehouses and fulfilment centers in different locations, can be a good choice to amplify reach, shorten shipping times and make returns easier. It can also be a suitable solution for audiences who want to be able to choose from a range of delivery options and costs, don’t feel comfortable making cross-border purchases or are averse to longer shipping times.
Oftentimes, this localized model will mean a considerable investment in time and money, and finding the right logistics partner, who can take care of everything from legal concerns to fiscal duties, is crucial for the success of the approach and the expansion journey.
3- Invest in ecommerce fulfilment technology to boost efficiency
No matter at what stage of your global development your brand is, efficiency is always a core objective and a key step to achieving sustained growth, and investing in the right technology — or partnering with a tech-oriented third-party provider — can be a game-changer.
Ensuring you have a solid inventory analytics tool, that can help you understand your inventory ebb and flow and shed light on things like carrying costs, inventory shrinkage and backorder rate, is key to effective planning. It will not only help your brand have a more in-depth understanding of the state of your business but also enable you to manage fulfilment costs and timeframes with confidence, especially as your brand gains international momentum. More importantly, it will help you gauge the effectiveness of your ecommerce fulfilment strategy.
Likewise, warehouse automation is another key area to keep your fulfilment processes running smoothly. The right automation tools, such as FIR/ST, THG Ingenuity’s warehouse automation solution, can reduce warehouse footprint while maximizing the inventory capacity and efficiency to ship more stock. Automated warehousing solutions that use advanced robotics can help your business become more resilient and flexible, enabling it to weather the rise and fall of demand more easily, as they can quickly adapt to peaks and troughs.
As the warehouse automation sector grows (it is expected to be valued at $51 billion by 2030, according to McKinsey), new services and models are being developed and refined constantly, so make sure you understand what your business’s needs are and in what ways these solutions can support them.
4- Optimize the global customer experience
Typically, when fulfilment is discussed, warehouses and deliveries are the first few things that come to mind. However, fulfilment is not just about getting a parcel from point A to point B: it’s also about building a complete and positive shopping and delivery experience for your customer from the minute they click on ‘buy’ to the moment they receive their order at home.
Bridging the gap between the moment of purchase and the actual delivery is crucial for this. Customers are usually eager to receive their parcels and knowing the details of their order’s journey out of the warehouse and to their doorstep can help ease the wait. Sending them branded and personalized updates on where their order is and giving them the possibility to track it is key to keeping them engaged with your brand while they wait.
Keeping buyers up to date with their order can be a relatively simple task when your operations are local and work with just a handful of delivery partners. However, in a global scenario, where buyers are located across markets, this can become a more complex job. Your brand will need to have not only a reliable tracking solution that allows you to contact customers in different locations with information about their orders, but also one that has the capacity to do so in multiple languages, depending on where your brand operates.
Likewise, should your global customers have an issue with their order, such as needing to cancel the purchase or reschedule a delivery, they need to be able to reach out to your brand in the way that is most comfortable and convenient to them. Having a customer service tool that provides support across multiple channels and in the language of your customers is vital not only to complete a seamless fulfilment journey but also, and most importantly, for an optimal customer experience that will make shoppers feel comfortable and safe talking to and buying from your brand. Ensuring all your customer service communications are localized will help you to not only minimize the number of customer care interactions needed to resolve any potential issues but also foster longer-term customer relationships: according to research by CSA Research, three quarters of online consumers said they are more likely to purchase from the same brand again if customer care is in their language.
5- Partner with ecommerce fulfilment experts
Whether your international expansion journey is just beginning or has reached a more mature stage, choosing an ecommerce fulfilment partner that has the expertise and experience you need to power your growth is key.
For the past 18 years, at THG Ingenuity we’ve been helping brands of all shapes and sizes meet their global ecommerce fulfilment needs with our end-to-end solution, whose range of modules cover the complete fulfilment journey — from first click to doorstep. With everything from warehousing management and automation to courier management and customer service, we remove the hassle of having to pick different partners for the different areas of fulfilment, simplifying your brand’s global journey by offering the complete spectrum of fulfilment services under one roof.
Thinking about going global with your brand and don't know where to start? Don’t miss our blog with the five key things you need to consider when entering a new market.
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