Competition from local sellers: it can be a pain for cross-border sellers all over the world. Unless you have a unique product, which almost doesn’t exist, you have to deal with local competition. How do you cope with competitive shipping rates and, more important, competitive delivery times?
Henning Heesen, Chief Product Developer at Salesupply, talks to us about the importance of international fulfilment and how the Salesupply Fulfilment Solution was created to provide cross-border merchants with the possibility to fulfil internationally at a local level.
Delivery Experience as key driver to online sales
These days, it is essential to focus on a perfect customer experience, and this includes a perfect delivery experience. Customers have been spoiled with faster and faster deliveries and now they are demanding it. A couple of years ago, it was common sense that you had to wait for two or three days for something ordered online. These days, the cut-off and delivery time makes or breaks the conversion. Big online players like Amazon have raised the bar to a very high level - Amazon Prime made sure any product would be delivered the next day, Amazon Prime-Now tops even that. Consumers can schedule their own delivery, the same day.
“This immense pressure on the delivery experience will kill cross-border merchants who deliver internationally in the future. For obvious reasons, local merchants deliver faster; there is no way international retailers can compete with these expectations,” Heesen notes.
The battle of the cut-off time
The acceptable time between customers’ demands and getting the product is decreasing massively. Logically, the alternative is to go to the city and get the product yourself right away. However, that comes with the hassle of driving, parking and even the possibility that the product is not available.
“In a couple of years,” says Heesen, “this latter problem will be solved when retail stores on a big scale start connecting their checkout systems to local city marketplaces. But for now e-commerce retailers can and should have the answer for that.”
Henning Heesen strongly believes the answer lies in the cut-off time; the latest time a customer can order for a next day, same day or time scheduled delivery: “This battle between retailers that is already going on and will continue in the next couple of years, will be that of the cut-off time to fulfil customer’s need of getting the product as fast as possible to the demand,” he states.
“In the Netherlands this is already happening. Large players like Bol.com, Wehkamp and Coolblue offer customers a next day delivery when ordering before 23:59h. As this is a standard offer, a standard service, this is the benchmark for all retailers, including international players.”
The need to stay on top of the game
The Salesupply Fulfilment Solution is an answer to remain competitive, but also international. “In the last two years, we have set up a network of warehouses in eight countries. With hubs in the USA, the United Kingdom, China, Germany, France, Italy, the Netherlands and Spain, we make it possible for international merchants to store their product internationally on a local level.”
This service comes with multiple strategic advantages for cross-border selling merchants:
• Faster delivery: having local stock offers the possibility to deliver faster.
• Lower shipping costs: in general, you can save money sending from a local hub to a local customer. Domestic shipping in Germany and France is somewhere from around €3. Cross-border deliveries in Europe demand a line haul that will raise those prices up to €5 - € 9. Big
• Lower return costs: local returns are cheaper than shipping them cross-border. Return handling can be quicker as well.
• Lower costs in customer service: shorter delivery and returns refunding time will decrease customer service inquiries as there is a smaller time frame to ask them.
According to Henning Heesen, these advantages have one very important thing in common for cross-border activities: cross-border fulfilment is creating a growing and competitive business model for the future. “Cross-border fulfilment is nothing more than a better customer experience. We call this the Delivery Experience, accompanied with lower costs. Salesupply developed a technology platform that makes it possible to get connected with our multiple warehouses. Integrating a new warehouse is often very difficult, so we created the technology to make this a fairly easy process, accessible for any merchant.”
What does the future hold? “The fulfilment program will be optimised and our warehouse density in the current markets we offer this solution for will be higher. A commonly trend is that 50% of American retailers are already using more than two warehouses to provide a next-day delivery service in high-density regions. The next step will be the data development part, so we can provide our customers with more information regarding fast- and slow movers and what stock to put where.”