Cross-border eCommerce: How U.K. retailers can find new footing in the U.S

Exporting goods from the United Kingdom to the United States is an attractive opportunity for eCommerce businesses looking to expand their market reach. However, navigating various practical considerations is crucial to ensure a successful venture. Within this article, we have outlined some practical guidance and considerations to maximise cross-border commerce. 

The expansion of eCommerce in the U.K. and the U.S.

The U.K. and the U.S. stand out as global leaders in eCommerce, with robust revenues and a thriving digital marketplace. These two nations have witnessed remarkable growth in their eCommerce sectors, supported by a robust internet infrastructure and a tech-savvy consumer base.

In the U.K., eCommerce revenues have steadily risen, reflecting a shift in consumer behaviour towards online shopping. This trend is expected to continue as more consumers opt for the convenience of online shopping.

Revenue of the eCommerce industry in the U.K. 2017-2027(in billion U.S. dollars)

In the U.S., eCommerce is an economic powerhouse, the market size having surpassed $900 billion in 2020, as reported by Statista. This figure represents a significant portion of the overall retail market. eCommerce's share of total retail sales in the U.S. reached 14% in 2020, demonstrating the substantial impact of online shopping on the American retail landscape.

Revenue of the e-commerce industry in the U.S. 2017-2027(in billion U.S. dollars)

Both countries share commonalities in terms of software platforms used for eCommerce. Shopify, WooCommerce, and Magento are among the popular choices for businesses of all sizes in the U.K. and the USA. These platforms offer user-friendly interfaces and robust features that facilitate online transactions.

Differences in eCommerce habits between the U.K. and U.S.

The differences in eCommerce shopping habits between the U.K. and the U.S. can be highlighted using information from the provided sources:

Shopping Frequency and Habits: British consumers shop online more frequently than their American counterparts. In the UK, around 86.3% of consumers shop regularly online, which has also seen huge growth, with a penetration of 83% now purchasing online. This suggests that online shopping is slightly more ingrained in the daily routines of UK consumers.

Mobile Shopping Adoption: The UK has a higher percentage of mobile shoppers compared to the USA. Approximately 55% of UK consumers make purchases via mobile devices; in the USA, it's slightly lower at approximately 33%. This indicates that mobile commerce is more prevalent in the UK. Therefore, when preparing a growth strategy for the USA, businesses should focus less on the mobile strategy over the desktop.  

Preferred Payment Methods: Payment preferences differ between the two countries. In the USA, credit cards are the most dominant payment method for online shopping. In contrast, debit cards and online payment services are preferred in the UK.

Marketplace vs. Direct Retailer Purchases: The U.S. and the U.K. strongly prefer purchasing from online marketplaces like Amazon and eBay. However, within the U.K., consumers still have a strong preference to purchase directly from individual retailers' websites.

Economic Factors and Discounts: American consumers are more likely to seek discounts and coupon codes while shopping online. This behaviour is driven by a culture of bargain-hunting and a strong focus on getting the best deals. In the U.K., while consumers do use discounts, the extent of extreme couponing is not as widespread.

There are also differences in what Americans spend their money on. For example, in the UK, sports and Fashion rank in the top categories, whereas electronics are the top spend in the U.S. Therefore, when looking at what countries to expand to, it's essential to keep the market location expansion in mind.   

Practical considerations for eCommerce businesses in the UK

While eCommerce is prevalent in the UK and the USA, the notable differences outlined eCommerce businesses will need to tailor their strategies to each market's specific preferences and expectations. The following considerations will help your business succeed in transatlantic success:

Market Research and Marketing Strategy: Conduct comprehensive market research to understand the American market's preferences, behaviours, and trends. Points often differ from country to country, meaning the same sales strategy may not be as effective in the U.K. as it will be in the U.S. 

Tailor your marketing strategies to resonate with American consumers, considering cultural nuances and regional variations. American consumers consume different channels and often have other social streams, meaning the strategy needs to be implemented specifically for them.

Payment Options: To cater to American consumers ' preferences, offer various payment options, including credit cards, digital wallets like PayPal, and localised payment methods.

Customs and Duties: Familiarise yourself with the customs regulations and import duties imposed by U.S. authorities. Use resources like the Harmonized System (HS) code to classify your products accurately. Provide clear information to customers about potential customs fees and charges that may apply, ensuring transparency and avoiding surprises upon delivery.

Taxation: Register for U.S. sales tax permits in states where you have a tax nexus, such as a physical presence or significant sales volume. Consider using tax automation software to calculate and remit sales tax accurately. This automation can plug into eCommerce platforms and quickly provide landed cost calculations at checkout for your customers, no matter the location. 

Product Compliance: Ensure your products comply with U.S. regulations, standards, and labelling requirements. Compliance is critical for specific product categories like electronics and food to avoid legal issues. Stay off the customs radar; with every country having specific rules, it is crucial to ensure you have correctly labelled your products to stay compliant with import regulations.

Returns and Customer Service: Establish a transparent and customer-friendly return policy for U.S. customers. Make it easy for them to initiate returns and provide timely refunds or replacements.

Offer responsive customer service to promptly address inquiries, concerns, and issues, building trust with American customers. Offering pre-paid returns labels in the outbound parcel can increase trust and ensure the customer knows the available returning delivery options.

Localisation: Localise your eCommerce website, including product descriptions, pricing, and customer support, to make the shopping experience more accessible and familiar to American consumers.

Data Privacy and Security: Comply with U.S. data privacy regulations, especially if you collect customer data. Ensure robust security measures to protect customer information.

By addressing these practical considerations, eCommerce businesses can successfully navigate the complexities of exporting goods to the USA and establish a strong presence in this lucrative market while providing a seamless experience for American customers.

Add Shiptheory to your tech stack to simplify the complexities of cross-border deliveries

Businesses can expand and grow internationally with Shiptheory by their side. With integrations to the world's most popular global carriers. Shiptheory users can benefit from:

• Automatic customs documentation creation
• Support of electronic paperless trade
• Commodity data checking tool
• Free Onboarding and Technical support from their shipping specialists

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Let's further explore how Shiptheory can help you grow your business and  international shipping needs:  

eCommerce Integrations Simplified: Shiptheory can simplify eCommerce by providing a comprehensive and user-friendly platform for all your international carriers and eCommerce platforms. Whether you're a small online retailer or a large enterprise, the Shiptheory dashboard offers a seamless solution to view all your shipments, removing the need to log on to endless carrier portals.

Real-time Shipping Metrics: Shiptheory provides global insights into where and when the shipments are coming from. 

Streamlined Global Shipping: Shiptheory integrates with over 70 global carriers and 90 eCommerce, Marketplace, OMS and ERP Platforms. Allowing businesses to choose the most suitable for the greatest efficiency between platforms. This flexibility ensures you can optimise your global shipping strategy to meet your needs.

Reliable International Courier Delivery: Shiptheory's trusted international courier delivery services are known for their reliability and efficiency. They work with trusted courier partners to ensure your packages are handled carefully and reach their destinations on time.

Automated Shipping Workflows: One of the key advantages of using Shiptheory is its automation capabilities. Businesses can set up rules to automate the selection of shipping carriers, generate shipping labels, and update tracking information, saving time and reducing manual errors.

Improved Customer Satisfaction: Dedicated Shipping experts help you through international expansion and beyond. Shiptheory offers a dedicated account manager, Phone, email, live chat and technical support at no extra cost.

This article was written in collaboration with Shiptheory.

Speak to a member of the team to find out more about how Whistl integrations and how we integrate with Shiptheory