USA now prime location for UK retailers

Over half of UK retailers consider the US to be the most significant overseas e-commerce market, according to new research. But are these businesses prepared?

A survey of 250 British retailers revealed that even though the majority believe that the US is the biggest opportunity for growth, only 44 per cent of them currently sell to shoppers in the US.  Just 13 per cent are currently planning to sell to American consumers.

Online sales reached $341.7 billion in 2015 – a 14.6 per cent increase since 2014 – and this growth is only set to continue over the next three years. By 2019, the North American e-commerce market will soar by 59 per cent to $579.9 billion, making it bigger than the e-commerce markets of Europe, the Middle East and Africa combined, and second only to Asia Pacific in global rankings.

The US has become all the more attractive to overseas retailers since a new bill was introduced earlier this year to raise the level at which import taxes are applied from $200 to $800. It is now considerably cheaper, and in most cases tax-free, for US shoppers to purchase from foreign merchants online. Coupled with the pound at an all-time low in the wake of Brexit, and the dollar performing so well against other currencies, now is the optimum time for British retailers to target US consumers.

The study was conducted by e-commerce specialist firm, Global-e, which additionally found that almost half of the retailers that are targeting US shoppers haven’t localised their products and services at all.

Although there is no language barrier to contend with, US shoppers often feel unconfident about making a purchase if the online store doesn’t offer prices in US dollars, provide local returns, multiple shipping options at attractive rates, and guarantee no additional taxes or costs upon delivery. According to Global-e’s data, 99 per cent of US customers prefer to pay in US dollars, when given the option by a foreign retailer and conversion rates are increasing to over 90 per cent with a localised offering. This could leave British retailers at a disadvantage, if they try to fit a square peg in a hole by just offering their UK products and services as is.

According to Nir Debbi, CMO and co-founder of Global-e, retailers should take the local competition into consideration, and remove major barriers in order to realise the full potential of the US e-commerce market. “Most retailers fail to offer overseas customers their local payment methods, localised pricing or multiple shipping options at attractive rates and local return options – which impacts conversions abroad.”

Debbi believes retailers can streamline the customer experience by providing localisation, but this doesn’t mean building a standalone website from the outset or negotiating deals in every market. “Retailers can achieve this high standard without investing heavy time and money into the process by working with specialist partners to achieve the personalisation the consumer expects.”

Praseeda Nair

Kellen Rempel

Praseeda was Editor for from 2016 to 2018.