The city is broadening the reach of its 9% “amusement tax” to include streaming entertainment services like Netflix and Spotify.
Many online retailers already sell overseas, and many more are planning to do so.
Three-fourths of web retailers that responded to a recent Internet Retailer survey accept orders from outside the United States, and for some, international customers represent a significant part of their business. But relatively few offer features tailored to foreign consumers.
That may change in coming years, and lead to still-greater international sales for U.S. e-retailers, some experts say.
14.5% of the 75.2% of merchants selling internationally, which includes Canada, report that in 2009 more than 25% of their total web sales came from customers outside the United States, according to Internet Retailer’s new international e-commerce survey of 247 web-only retailers, chain retailers, catalogers and consumer brand manufacturers. 4.8% report 21% to 25% of sales came from outside the borders of the country, 7.0% report 16% to 20%, and 5.9% report 11% to 15%, the survey finds.
9.1% say 8% to 10% of 2009 sales were derived from international shoppers, 12.4% report 5% to 7%, 18.3% say 2% to 4%, and 28.0% report less than 2%.
Of the 24.8% not selling internationally, 60.3% are assessing the viability of selling to consumers outside of the United States; and of those merchants, 70.3% plan to start selling internationally within a year.
“There’s currently great interest in the international space, in part because of the pressures of the U.S. economy and the lack of growth, and that it simply is a new day and people are looking at things more globally,” says Bobby Frank, CEO of BorderJump LLC, a provider of international e-commerce technology and services. “And the survey shows the types of merchants and the products they sell cross all lines, so the action and interest is pretty universal.”
Visiting the U.S.
Whether they’re selling internationally or not, U.S. retailers are being visited in significant numbers by shoppers from foreign lands, according to the Internet Retailer survey of IRNewsLink e-newsletter readers conducted last month with e-mail marketing and survey firm Vovici Corp.
16.7% of merchants report more than 20% of their total web traffic stems from outside U.S. borders, the survey finds. 15.0% report 11% to 20%, 19.5% say 6% to 10%, 32.9% report 1% to 5%, and 15.9% say less than 1%.
Yet, relatively few of the merchants surveyed are catering to these shoppers on their U.S. sites by offering features and functions designed for international shoppers, or creating standalone e-commerce sites designed for individual countries. Nor are many of them working with vendors that specialize in globalizing e-commerce sites or that handle the logistics of delivering orders to consumers in other countries.
Only 17.9% of merchants selling internationally operate any e-commerce sites designed for other countries separate from the U.S. site. Of those merchants, 35.3% operate one such site, 20.6% two, 8.8% three, 5.9% four, and 29.4% five or more.
Consumers from other countries don’t always want to buy from sites tailored to their countries, says Frank of BorderJump.
BorderJump recently conducted a survey of 7,600 consumers in Latin America and the Caribbean. The majority of respondents said they prefer shopping U.S. e-commerce sites as opposed to sites specially crafted for their country.
“They want to get the same web shopping experience as in America; they just wish it was easier to pay for purchases,” Frank says. “The local site doesn’t have the same caché in certain markets that coming to the U.S. dot-com holds. There is not necessarily a right or wrong answer to this question, they are just different strategies.”
There is a growing number of companies that offer bundled services, from adding payments and shipping to the site and handling delivery, customs and taxes, to building native web sites. But the survey does not indicate a lot of interest in these companies.
28.5% of merchants selling internationally use a third-party provider to sell and service consumers outside of the United States. And of those that do not, only 14.4% are currently evaluating the use of a third-party provider.
That could change, some experts say, as more vendors, including larger ones, offer services aimed at servicing online shoppers from other countries.
“Behind the scenes is exciting because we have seen and talked to some pretty big companies that are willing to invest in this market to provide technology and services to retailers,” says Jim Okamura, senior partner at global retail consulting firm J.C. Williams Group Ltd. “It may not be a retailer’s highest priority to devote their in-house resources, but these outside solutions give more choice and improve upon customer-facing experience issues as well as behind the scenes operational matters. We are bullish, and know there is a lot of thinking going on among retailers; combine that with the international e-commerce companies coming to market and that will create some interesting partnerships.”
Key features and functions
Many retailers are indeed thinking international sales, but of those selling internationally, few have added to their U.S. e-commerce sites features and functions to aid foreign shoppers.
According to the Internet Retailer survey, 18.6% offer a currency converter, 15.4% show the fully landed cost of delivering an item to the consumer’s door in local currency, 15.4% offer product content in a local language, 15.0% feature customer service content in a local language, and 14.2% offer telephone support in a local language.
“The fact that fewer than 1 in 5 have a currency convertor, yet that is one of the most important features to have, shows how much upside there will be. If 14.5 % of retailers are doing in excess of 25% of their sales internationally and most have not done much to enhance the customer experience, the more they enhance the experience, like adding a currency convertor, the greater the opportunity for more sales,” Okamura says. “So whether it is currency conversion or fully landed cost, it’s telling in terms of how early it is.”
Retailers understand what they are offering to international shoppers is not up to par, Okamura says, adding that J.C. Williams Group expects adoption of key international shopping features and functions by U.S. retailers to rise rapidly during the next two years.