Overcoming doorstep refusal in global sales
By Craig Reed, GM Cross-Border at Avalara.
The world of e-commerce has long understood the frustrations of cart abandonment. It’s well-reported that the average cart abandonment rate sits at about 70% due to a range of factors from delivery costs and times, payments options and security, and long and confusing checkout processes. In addition to this well-established obstacle, there’s a new challenge for businesses to tackle – cart abandonment’s more problematic cousin, doorstep refusal, and it’s costing businesses dearly in both sales and customer loyalty.
The cross-border complexity challenge
As global trade has continued to accelerate and thrive, businesses have found more opportunities for growth overseas and larger, more diverse audiences to engage with. They’ve also found increased trade complexity and a more intricate maze of regulations to navigate, all while consumers have grown to expect a fast, seamless cross-border shopping experience as a bare minimum.
This new era of cross-border complexity is highlighted in research from Avalara: a staggering 8 in 10 businesses report that cross-border complexity influences their decision to enter new markets. The research also shows that the compliance challenges faced by businesses, such as shipping complications or assigning classification codes to goods, are directly translated to the consumer experience. Operational decisions, such as which form of shipping to use, can have big consequences – such as 49% of customers refusing deliveries once they’ve arrived at their destination.
The good news is that with technological innovations businesses can solve these challenges swiftly and easily. But it requires a mindset shift, from viewing cross-border compliance merely as a logistical nightmare, to seeing it as a key to unlocking customer satisfaction and loyalty.
Expectations vs reality
Year on year, international shopping is only growing more popular with consumers. Younger consumers especially are driving this trend, drawn to the expanded product range, quality and affordability offered by the global marketplace. Around two-thirds of those aged 16-34 made international purchases in the last year, compared with just 41% of those aged 55 and over.
But consumer expectations for a modern, seamless shopping experience do not match up with reality. 43% of consumers cite the absence of a transparent, all-inclusive final cost (including duties and taxes) at checkout as a primary reason for cart abandonment. This lack of clarity can lead to unpleasant surprises later in the purchase journey.
60% of consumers surveyed have experienced surprise costs due to customs duties charges upon delivery. Half of them said the costs were “shocking”, and three quarters would reconsider purchasing from the business again. Almost half (49%) said they would choose not to accept the package altogether.
The root cause? Despite consumers’ preference for transparency, 75% of businesses use Delivered at Place (DAP) shipping, leaving customers responsible for customs fees upon delivery. A third of businesses rely solely on this method.
These numbers tell an important story: tackling cross-border challenges is not just a matter of business efficiency or remaining compliant, it is central to customer experience, customer satisfaction and ultimately, the business’s international growth potential. Effectively navigating cross-border complexity might be the difference between a repeat sale and a lost customer.
Finding the solution
Thankfully for retailers, there has been a steady influx of innovative solutions designed to streamline compliance and other processes to reduce the risk of errors in recent years. These solutions address a manual-intensive but essential operational layer, automating routine processes to allow organisations and departments to focus on achieving the best outcomes for the business.
AI-powered tools can help identify potential compliance issues before they become problems. By automating compliance tasks, leadership teams also have more time to focus on operational excellence and personalised customer experience.
As an example, businesses can solve the customs duties calculation challenge through automation. This allows them to advertise shipping as DDP (Delivery Duty Paid). In this way, the customer knows exactly what they’re paying at checkout and won’t be met with any unwelcome surprises upon delivery.
Similarly, assigning the correct HS and tariff codes to your goods is both immensely important and potentially very complex – 41% of businesses highlight this as a key challenge. If the incorrect code is assigned to a shipment, this can lead to delays at customs, leading to unhappy customers. Using an automated solution, such as Avalara’s AI-driven Item Classification tool, alleviates this issue and any concerns over human error.
From back office to front door
The bottom line is that operational decisions ultimately impact the customer journey from purchase to doorstep delivery. Forward-thinking businesses are leveraging technology and customer-centric practices to turn cross-border challenges into opportunities. By doing so, they’re not just solving logistical issues – they’re opening new markets and cultivating global customer bases.
By aligning operations with customer expectations, these companies set new standards for global e-commerce, transforming potential obstacles into avenues for growth and customer satisfaction. The future of e-commerce is global, seamless, and transparent. Businesses that embrace this reality will be best positioned to thrive in the evolving digital marketplace.
To find out how Avalara can help your retail operation, you can visit them here or connect with them here.
