Over the last few months, a surge in online shoppers has forced retailers to re-examine how they approach the intensely busy holiday season, especially as the Coronavirus disease (COVID-19) pandemic continues to restrict customers from making in-store purchases. As a result, global digital commerce is forecast to rise a staggering 30% year-on-year this holiday season – up from 8% in 2019. This has led cross-border online sales to jump 21% since January, with over 1 million – and counting – new sellers joining Amazon.
Disruption to global supply chains meant U.S. retailers were forced to slash orders for merchandisers by 9% at the height of the pandemic, when in fact, consumer spending increased by 6% year-over-year during the second quarter – leaving businesses scrambling for goods last minute. The unexpected increase in sales understandably left retailers with stock shortage issues, with some customers having to wait until 2021 to receive their purchase, as demand continues to heavily outweigh supply.
The fourth quarter, in particular, is always the busiest – with the holiday season kicking off. This is compounded by the 2.05 billion international shoppers expected to join the online shopping revolution this year. To take full advantage of this huge opportunity, sellers will need to focus on a global e-commerce strategy and tap into the growing cross-border market, which is expected to grow 27% to reach nearly $5 trillion by 2026. However, more disruption is likely to occur, and sellers will need to be agile and put the right systems in place now, or risk repeating the same mistakes made earlier in the year.
Sellers can make the most of the upcoming holiday season by adhering to these three key points below.
Start planning now
At the height of lockdown, suppliers were unable to handle the increase in online purchases. The boom of activity – usually reserved for the upcoming holiday season – saw an unprecedented number of both shoppers and sellers turn to online marketplaces. E-commerce sellers need to adapt and prepare – fast.
1. Track your inventory. Although this year has brought up many unforeseen experiences, the holiday season will always remain a permanent fixture, and sellers should avoid the risk of running out of products by tracking what is coming or going.
2. Build upon a solid foundation. Merchants can learn from the mistakes made in spring by analyzing what products performed best, and what customers will want in the holiday season.
3. Meet consumer needs. 63% of shopping journeys start online, and adapting to diverse consumer demands such as instant delivery with easy purchase options will be paramount.
4. Expect the unexpected. Disruptions will naturally occur and acknowledging shortcomings now will help sellers draw up a plan B, to ensure the end-to-end supply chain keeps running.
Diversify by exploring new markets
Inventory shortages during the first three quarters of the year forced sellers to assess and explore new sources after the pandemic crippled supply chains to stagnation. To alleviate future disruption, merchants should start both sourcing products, and selling, in fast-growing markets abroad that can offer the best opportunities for boosting revenues and profits.
1. There are more buyers. Cross-border businesses can expose their products to an audience of half a billion consumers around the world, and reach over 170 countries, with the right network.
2. Think global. Sellers preparing for the domestic holiday season should also consider opening up to international markets and can benefit from a localized supply chain. China will be celebrating the New Year in February and is sure to surpass Christmas in online spending.
3. Disruption should be temporary. Lockdown restrictions are naturally to be expected at different points across the world, and U.S. sellers – heavily reliant on Chinese imports – experienced stagnation during the first two quarters of this year with supply chains grinding to a halt. Overcome any future disruption by diversifying supplier networks across different markets.
Leverage interconnected tools
Understandably, expanding internationally without the right support or knowledge of the market can be costly, with unforeseen expenses, stock issues, long shipping times and time-consuming exchanges. Luckily, developments in technology are assisting e-commerce sellers to overcome hurdles when operating globally, by providing more transparency and efficiency. Certain value-added products can help merchants make beneficial choices and are particularly useful for businesses that lack the capability to nimbly assess situations themselves and risk falling behind competition.
1. Adopt cross-border payment providers. Global sellers are seeing the value in choosing multi-dimensional growth partners, that enable transactions to feel local in terms of ease, yet are flowing across borders. By partnering with the right specialist, merchants can mitigate the fees and long transfers often associated with foreign exchanges when trading globally, and importantly keep more of their hard-earned profits.
2. Smart inventory management. Artificial intelligence and machine learning software can be deployed to manage inventories, as well as for analysing market and searching trends, to help merchants maintain the right stock levels and strategize what they should be selling.
3. Stay connected with customers. Last year, just over half of shoppers surveyed said they prefer U.S. brands to contact them via email, and using a simple follow-up email can encourage customers to return.
4. There’s more than one marketplace. Sellers hesitant to use international marketplaces with limited access to North America can also use payment providers to provide a localized hub where each marketplace is based and open up new selling opportunities.