The e-commerce industry has, since its inception in the early 1990s, shown remarkable growth, with no signs of slowing down anytime soon. If anything, the next few years should see the industry kick into even higher gear as more businesses join the world of e-commerce. That means more competition for online vendors, who will have to up their game to fend off newcomers and get ahead of the curve.
Staying on top of the latest trends within e-commerce is a great way of doing just that. Here are five easy trends you can follow and adopt to reach new customers, drive sales and prosper in a global market.
1. New geographical areas
For years retailers have been scouring Asia in the hunt for suppliers to cater to the needs of their western online customers. Today, more and more companies are looking to countries like China and India for new sales markets. Asia in general and China in particular are huge markets influenced by the convenience of online shopping and the demand for high-quality Scandinavian goods.
Say you succeed in one of the Chinese mega cities like Chongqing, home of tongue-burning hot pot, scorching summers and, not least, an astonishing 31 million people. That city alone has more potential customers than the entire Nordic region, says Kristoffer Jansell, senior sales manager at Nordea Markets. He stresses that doing business in Asia – or abroad in general – isn’t a straight path to fame and glory. There are things to remember when you are doing business with the likes of China. See some of them here.
Tapping into new markets can undoubtedly be risky business, but the potential is there, and that is why many e-commerce vendors are starting to explore new territories, says the senior sales manager.
2. Sustainable online shopping on the rise
The front page news of melting icebergs, Nordic heatwaves and raging forest fires are rapidly changing the way we purchase goods – both when we shop in brick-and-mortar stores and online. Consumers are becoming more and more aware of the environmental footprint they leave when shopping. From sustainable trade to product packaging, consumers are rewarding conventional retailers and e-commerce vendors who are taking steps to avoid harming the environment.
The environmental and ethical online shopping patterns of 2019 are just the beginning of a new form of consumerism. That is why incorporating sustainability throughout the supply chain is no longer just a nice-to-have but a need-to-have, says Nordea’s Deputy Head of Group Sustainable Finance Anders Langworth.
Looking to simplify?
If you want to simplify the process of offering prices and payments in local currency, why not automate it by using an API? It takes the hassle out of always having to get quotes and FX prices, and you can get rates that last for a full day or even a weekend. That way, your customer will not have to worry about currency fluctuations and hidden fees, and you know exactly what your business will be paid. Not to mention you’ll free up time spent on manual pricing and FX handling for more value-adding activities.
To learn more about such APIs, take a look at Nordea’s FX-Listed Rates API.
3. Local currency
In the early stages of online shopping, many e-commerce sellers priced their products in only USD and EUR to drive international business. Some 25 years later, many e-commerce vendors still use that illogical tactic.
Earlier this year Shopify, one of the largest e-commerce platforms, conducted a survey interviewing 30,000 online shoppers about their online shopping habits. The survey revealed that more than 92% preferred prices to be quoted in their local currency, and if this service wasn’t on offer, one-third would leave the store without making a purchase.
Today’s e-commerce front-runners have for some time been using local languages as well as pricing their products in local currency. Maybe it is time to follow suit?
According to Jansell, pricing products and services will increase your chances of securing a sale. What’s more, it can also increase your margins as you keep your FX trading in-house rather than (unknowingly) outsource it to the credit card issuing company or third party payment service provider.
If you, for example, run a Swedish online store and sell goods to a Danish customer, an external vendor will handle the FX trade connected with the cross-border sale. In general, external vendors have an FX margin higher than 2%. By pricing your goods in local currency, you protect your customers from a “fee” often exceeding 2%, says Jansell.
4. A convenient truth: Local payment methods
One way to increase sales conversions is to offer different payment solutions – not only card payments. This is a trend that many front-runners in the e-commerce space have already jumped on. However, it isn’t enough to just offer different payment solutions to stay ahead of the game. You also have to offer local solutions that fit the habits of your customers, according to Jansell. As a global e-commerce player, it is important to understand the needs of your local customers, not only when promoting your brand and products but also at check-out. Payment methods as well as currencies differ from market to market, he explains.
The preferred method of payment globally is (still) card payments, but there are big cultural and geographical discrepancies to consider when becoming a successful e-commerce player. Take the Nordics as an example. In Norway and Denmark, debit or credit card has the most traction, while Swedes prefer invoices and the Finns direct payment via bank account transfer. In addition, mobile payments are skyrocketing. Around 70 percent of the Swedish population uses Swish for their daily money transfers and purchases, placing a high degree of trust in the service.
As payment methods differ from country to country, use a payment strategy that fits with the preferred payment method of the local market you want to do business in, says Jansell. Contact your bank to get an overview of payment methods in your preferred markets, and, together with your adviser, make a payment strategy.
5. Automated processes and governance
Dreamy imagery, compelling product descriptions, complementary products and content marketing pieces are the fundamentals when running a successful e-commerce business. These elements equip potential buyers with the information they need before making the final decision to buy, drive organic traffic to your online store and increase your chances of making a sale.
Maintaining and providing imagery, videos, product descriptions, names, stock availability, size range, brand logos and pricing for all products available for purchase is, not surprisingly, a time-consuming task.
Taking that into account, one of the biggest trends within e-commerce is adding artificial intelligence solutions that can automate the creation, optimisation, classification, translation and syndication of product content.
Yet putting computers to work isn’t only a big trend when it comes to automating product content. More and more companies are also looking into automating their FX trading in order to avoid the negative effects of currency fluctuations, free up time and avoid human error, says Patrik Holmberg, FX automation & digitalisation specialist at Nordea Markets.
Get more insights on Nordea Markets’ own FX automation and digitalisation specialist, Patrik Holmberg, and why automation is the new kid on the FX block here.
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