Logistics service provider
Internationalization as an opportunity
E-commerce is in a state of flux. Changes in purchasing behavior and procurement problems are keeping e-commerce retailers busy. Logistics plays a decisive role in the overall online shopping experience. A guest article by Markus Reckling, Managing Director DHL Express Germany.
After the coronavirus pandemic boosted e-commerce and gave it a significant boost, the current crises are once again causing changes and new challenges. This article will shed light on how consumer purchasing behaviour has changed, what this means for retailers in combination with procurement problems and why the opportunity for companies in this situation lies in internationalization.
Buying behavior has changed
Consumer purchasing behavior has changed significantly in recent months - reasons for this include the outbreak of war in Ukraine at the beginning of 2022 and the impact of inflation. Rising prices and the generally uncertain situation are making consumers reluctant to spend. Purchases in the fashion sector in particular, but also spontaneous impulse purchases, have therefore become rarer. As a result of these changes, many companies are experiencing a decline in sales.
Internationalization of the product range
Procurement problems and shrinking markets due to the war in Ukraine are also hindering companies from achieving further sales growth. The low availability of goods means that consumers are increasingly looking for the products they want online, including abroad. This is because consumers have learned during the pandemic that online retail offers them a better overview of products and added value thanks to the greater choice. The opportunity for companies in this time of crisis therefore lies in opening up new markets, either by developing new product ranges or - and this is the less risky route - by internationalizing their existing product range. The success of internationalization can be measured by figures and findings from the first year of the pandemic: Growth in cross-border e-commerce rose by 35 percent in 2020, significantly faster than the overall e-commerce market in Europe at 24 percent. In addition, international shopping baskets are two to three times larger than national ones with only half as many returns.
It all depends on the logistics service provider
In the current market situation, internationalization through e-commerce is the best way to test and open up new markets. Basically, it doesn't take much: an English website, the right payment providers and marketing aimed at the new markets for international traffic. However, the right logistics service provider plays an important role in a few key points.
The focus here is on customer satisfaction, as 97% of consumers will continue to shop with a retailer that offers them a positive customer experience. In order to make shipping across national borders convenient for the consumer, the logistics service provider must be able to keep delivery times as short as possible and comparable to domestic deliveries - worldwide. This is a particular challenge when logistics is organized centrally rather than locally, which is particularly advisable for more expensive, higher-value items. Central storage saves companies expensive investments in warehouses.
Digitalization is positive for online shopping
The rapid progress in digitalization, driven by the coronavirus pandemic, is having a positive impact on e-commerce and the logistics behind it. The best example is customs, which usually complicates orders outside the EU. Digitalization helps in two areas here. Firstly, logistics service providers can use online tools to ensure transparency regarding additional customs costs so that consumers can factor them in at an early stage. Secondly, logistics service providers such as DHL offer a service where the customer can hand over the goods to DHL with customs clearance already paid, so that consumers do not have to worry about this and experience a better shopping experience.
In cases where customs duties are still due, a service developed by DHL Express during the pandemic ensures that consumers can conveniently pay customs duties online in advance using the respective country-specific payment services. This offers all the advantages of a shipment tailored to the customer's needs, such as the determination of a drop-off location or delivery to a neighbor. In addition, there is no need to pay with cash on delivery. DHL's customs service, Advanced Duty Collection (ADC), had a usage rate of 70 percent after just three months. The increased digitization rates have also increased the acceptance of such online services. This confirms that targeted investments in new systems and thus in the customer experience really pay off.
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