A recent survey conducted by Flow Commerce, a company which facilitates e-commerce brands to expand into international markets, revealed that across the 8 top global markets, 76 percent of online consumers said they have placed an order on a site outside their own country, with Gen Z shoppers skewing even higher. Apparel and accessories were the number one item shopped outside of a brand’s home country. FashionUnited talks to Flow Commerce’s CEO Rob Keve to understand what mistakes brands make when it comes to capturing the overseas consumer and how to leverage next-generation technology to amass a global footprint, especially among Gen Z shoppers.
Flow was launched in 2015 by Keve and Mike Bryzek, who had founded fashion e-commerce giant Gilt, when they met at a running track and realized that they shared a vision of the future of e-commerce. According to the Flow Commerce website some brands have seen a 400% increase in their international sales using its cross-border solution. Clients include Ulla Johnson, Good American by Khloe Kardashian, PAIGE, Rowing Blazers and Universal Standard.
Pandemic drives cross-border sales
“The increase in traffic and the increase in sales for cross-border has really gone ballistic in the last eighteen months,” says Keve. Consumers in lockdown unable to visit physical stores began buying internationally like never before and, with ongoing pandemic surges and new variants emerging around the globe, there is no indication that this will change. Companies, however, need to change their behavior so as not to undermine the consumer experience.
“Brands are very focused on customer experience excellence, but that tends to be domestically,” he says. “If 20 percent of site traffic comes from overseas, brands think it will be easy revenue, but it tends to fall apart.” The most common failings are easy to point to. For one, price point. “Are prices nicely rounded and displayed in local currency?” asks Keve. Payment methods are also important. “Are you just offering cards and PayPal because, if so, that’s not a thoughtful checkout experience for consumers in many countries who do not have international cards and don’t use PayPal,” says Keve.
Shipping is another area of unnecessary consumer disappointment. It may not end up being free and certainly may not be next day. Duties and taxes are also complicated to get right. “They vary by product and by country and it’s the most awful shopping experience to have a carrier arrive on your doorstep with the product you ordered two weeks ago demanding 50 dollars to cover the duties and taxes you weren’t aware of.”
Countries which take the lead in international retail
“If you looked at the ranking of countries that consumers are buying from, it’s vacillated so much in the past 18 months,” says Keve. “That’s largely in line with which countries were in lockdown, and unemployment rates.” Prior to Covid, the ranking was reasonably static and the top countries for a US merchant were Canada, UK, and Australia, followed by some combination of high-GDP countries like France, Germany, Korea, Japan, or Hong Kong. But the order and ranking has since changed which has revealed one of the most interesting takeaways to come out of the pandemic for merchants: the importance of diversifying. “There is such a thing as geographic risk, not just economic risk,” says Keve. “If the US is in high lockdown, and other countries are in a different situation, a diversified retailer can capture that overseas revenue.”
According to Flow’s data the more unique products are the ones in highest international demand. Haus Labs, Lady Gaga’s beauty brand, is one of Flow Commerce’s clients. “It’s not available in your average store, so if you are a fan, you’ll be purchasing from her site regardless of where you are in the world.” He says people are willing to shop internationally for more expensive items that aren’t readily available at multiple outlets. “High fashion, handbags, jewelry and beauty have done particularly well.”
Determining how much revenue can be generated overseas is a tangible thing as all brands have to do is look at their site traffic and the ip addresses. But Keve says more often than not brands don’t realize how much potential for international growth exists within their business already. “You could be boosting your revenue by 10-20 percent overnight simply by making sure the customer experience is good. That’s low hanging fruit.”
Finally, understanding that consumers internationally all behave differently, that it’s not one homogenous market but 200 different countries with different expectations, is key. He advises brands to identify the top 30-40 countries which will probably deliver 80 percent of the volume. This represents enormous potential for the brand to keep expanding without additional structure or a dedicated team.
Fashion editor Jackie Mallon is also an educator and author of Silk for the Feed Dogs, a novel set in the international fashion industry