Convert luxury fashion consumers | PYMNTS.com
The cross-border trade sector has been growing for 16 months. Global e-commerce sales are now expected to exceed $ 4.8 trillion by 2026, and the business-to-consumer (B2C) sector is expected to grow 27% over the next five years. In the United States alone, consumers spent an estimated $ 795 billion on products online last year, with cross-border purchases accounting for 34% of those transactions.
Logistics advancements have fueled much of the industry’s growth, but they’re not the only reason for the shift, according to Greg Spillane, CEO of Fancy, a New York-based e-commerce platform that sells clothing, accessories, art and gadgets from brands and artists. worldwide. He told PYMNTS that consumers want something different and are willing to shop from merchants and brands across borders to find exactly what they want.
“More and more brands are moving away from distribution to turn to supermarkets [and instead are] set up and build a direct relationship[-to-]consumer market, ”he said. “Fancy is really much closer to a social network, even in its e-commerce platform. It’s a place where people can share some really cool and interesting products around the world.
Fancy, founded in 2010, offers a selection of international fashion products and other products from an in-house purchasing team that searches the internet for distinctive styles and items. Spillane said the company also regularly receives arguments from designers, although less than 1% is withheld. Cross-border trade represents an important part of Fancy’s sales. Global merchants or brands sell 30 percent of the company’s products and 35 percent of purchases on the site are made outside of the United States
These international sales come with challenges, however. Quick and easy payment is essential for every ecommerce merchant, Spillane explained, and the goal is to remove barriers, such as setting up an account to close a sale. The acceptance of digital wallets, such as Apple Pay and PayPal, has saved customers the trouble of having to search for their cards when they want to make purchases.
Reduce shipping costs to curb cart abandonment
Cart abandonment is one of the biggest hurdles e-commerce sellers face, and this is also true for cross-border traders. Spillane said Fancy grapples with the issue on a daily basis due to costly global shipping charges, which can ultimately prevent customers from clicking “buy” and instead seeing them abandon their carts at checkout. He shared an example involving a Japan-based merchant on the site that offered unique products. While many of the items sold by the merchant have generated interest from customers, the products can take up to three weeks to arrive and a $ 10 item to ship costs $ 20. These fees can come as a big shock to customers who are used to paying little or no money for shipping their online purchases.
“One of the things Amazon has done, for better or for worse, is to train [consumers] that we don’t pay for shipping, ”he said. “Amazon can do it because of their scale. We can’t make it as cheap as Amazon.
Spillane said Fancy determined it was necessary to absorb at least part of the costs because that was what consumers were asking for. The company now offers free shipping for orders over $ 49 and a flat rate of $ 4.99 for all others, and it shares the costs with sellers. These measures are intended to help it address consumer concerns about cross-border shipping costs without these costs eating into its margins too much.
Facilitate the cross-border shopping experience
Simplifying payment and lowering shipping costs aren’t the only steps Fancy takes to facilitate cross-border trade. Spillane said the platform also accepts 135 currencies and the number is growing. Offering localized payment types and currencies can be crucial in closing sales, as even the slightest friction surrounding the process can direct customers to other merchants or platforms.
Another challenge is the fight against fraud. Fancy deploys a solution that helps it reject stolen credit card transactions while quickly and transparently approving transactions from legitimate customers. This allowed the company to reduce its fraud rate to less than 1%, Spillane said.
Merchants and e-commerce platforms are reassessing how they can streamline their cross-border operations as global purchases begin to account for a growing share of their total sales. It is becoming clear that several factors are critical to customer satisfaction in the age of international business. Brands need to be able to accept the types and methods of payment consumers prefer while maintaining low shipping costs and quick payment terms. Achieving this goal is no small feat, but it can help merchants continue to grow and retain customers over the long term.