Reminiscent of how quickly internet shopping emerged to transform the retail scene, cross-border shopping is now creating tremendous opportunities for sales growth while creating new operational challenges that can threaten the bottom line.
According to a recent study sponsored by Flow Commerce Inc., a provider of a turnkey platform for ecommerce companies going global, two-thirds of ecommerce shoppers said they purchase from retailers outside their home country. And a study by conversion consultants Invesp predicts cross-border shopping will become a trillion-dollar business by 2020, up from $304 billion in 2015.
Enticed by that opportunity, Culver City, Calif.-based Outerknown, a coastal lifestyle brand rooted in sustainable fashion and co-founded by professional surfer Kelly Slater, expanded into cross-border shopping in 2015.
About two years after launching the ecommerce site, Chief Financial and Operating Officer Travis Heard says management decided they needed to “re-platform our business and reevaluate our technology partners.
“We wanted to put a greater emphasis on flexibility, the customer experience, and really focus on delivering the best experience for the customer. We wanted to embrace new technology as well.”
The management team vetted a number of potential technology partners, including Flow Commerce. “I was very impressed with their offering,” he says, describing Flow’s platform capabilities, “such as currency localization, the ability to exclude products from our online catalog on a country-by-country or seasonal basis, align pricing for international markets, align our global pricing strategy with our wholesalers and manage our product category at the UPC level.
“They were innovative in that those capabilities didn’t exist on other platforms or, if some did exist, they were a little bit wonky.”
He says Outerknown “is now able to extend the same market promotions that we run onsite to all of our international customers, using codes for sales promotions which we weren’t capable of doing before.
“We’re able to control what users can see and purchase by region, creating a seamless experience for users on
In addition to providing a customizable platform for managing cross-border transactions with the ability to convert prices into local currencies, Flow lets Outerknown adjust its global pricing strategy when needed. The system also helps users manage duties and taxes.
Flow has also aligned Outerknown’s shipping procedures with Flow’s ecommerce business, its in-house warehouse management system, its carriers and its international wholesale network to eliminate the need for an intermediary warehouse hub to ensure fast shipping and optimal shipping rates.
Rob Keve, co-founder and CEO of Flow Commerce, says the hubless system means online merchants can ship orders directly to the end consumer without having to go through a crossdock.
Heard adds that Flow makes it possible for Outerknown to set shipping price by country so flat rates can be used in select markets or free shipping depending on what the norms are in each market.
That allows Outerknown to manage returns and reverse shipping costs effectively, which “increases customer satisfaction and gives us a competitive advantage,” he says.
In addition, Outerknown can also restrict its online product catalog within markets “to ensure that all products on the website are available within each market, eliminating disappointments at checkout.”
Heard says implementation was “extremely easy,” taking about 10 days. The Flow platform integrated into Outerknown, which is on the Shopify platform, and went live in January 2018.
SCALE WITH VALUE
Dozens of ecommerce brands are currently using the Flow platform, Keve says, from digital native brands to large companies with a bricks-and-mortar presence. As a software-as-a-service system with a subscription model, Flow’s pricing gives merchants the benefits of scale with better value as they grow, he says.
Keve says one retailer saw a 250 percent increase in its international sales after implementing Flow. Retailers using Flow have seen a 40 percent increase in cost savings, 50 percent increase in efficiency in international logistics and 73 percent increase in international conversion, he says.
Heard says that one year after integration with Flow, Outerknown saw a 100 percent increase in international sales, and growth that brought the portion of sales coming from international markets up to 15 percent. It is now selling into more than 150 markets.
In addition, Outerknown has been able to reduce shipping rates by 50 percent and “offer free shipping at a cost that makes sense for us,” he says. “We’ve also been able to minimize shipping delays.”
Outerknown is fully global, though 12 countries account for the bulk of business. Sales in smaller markets are consistently increasing.
“It’s difficult to quantify from an ROI perspective,” Heard says, “but the additional sales and profitability puts us on the upside compared with what it costs us. Flow enabled us to provide a more customized user experience to the world, based on localization and multiple checkout capabilities as well as a fantastic logistics network, and to do it at a good cost.”
A lot of times, he says, “you end up being promised things that don’t deliver or underperform. That was the surprising thing about Flow. They almost seemed too innovative, but their usability on the site across experiences, localization capabilities and A/B testing was outstanding. They delivered what was promised.”
Liz Parks is a Union City, N.J.-based writer with extensive experience reporting on retail, pharmacy and technology issues.