Retailers are falling behind Amazon in the race for e-commerce service

U.S. retailers often lack both the card acceptance and local customer service capabilities to support a global e-commerce expansion.

E-commerce leaders responsible for delivering hyperlocal buyer experiences across the globe face a predicament: either in-source the technology and operational capabilities required to manage a successful cross-border e-commerce operation, or outsource to vendors and partners.

Those that decide to in-source must be absolute in their understanding of the challenges and the risks they are undertaking, and ensure they have the budget, resources, and technology know-how to make the management of cross-border and its associated risks an internal core competency.

Gabby Jones/Bloomberg

Our research, which is based on a survey of more than 600 e-commerce and retail executives, shows that whichever path U.S. merchants choose they are failing to create hyperlocal digital experiences that motivate local buyers.

Only 25% of merchants have fully implemented local card scheme acceptance—a bare necessity to be successful in most local geographies. Only 27% have fully implemented local customer support that drives critical buyer trust and assurance at the moment of truth.

Additionally, merchants have ranked cash acceptance and local alternative delivery options (such as ship to locker) of low importance to converting buyers in local markets.

Meanwhile, Amazon is pushing forward with local delivery by expanding its delivery capabilities across LATAM with 1,500-plus Oxxo convenience store lockers in Mexico alone.

In India, without cash on delivery, consumers won’t convert, since an overwhelming majority of Indian consumers prefer using cash on delivery as a mode of payment for online purchases.

What we have also found is merchants are prioritizing cross-border sales. Ninety-one percent of merchants say that cross-border sales are a “moderate” to “high priority” over the next year. Forty-six percent of respondents believe they have fully penetrated existing markets; 56% are looking to expand outside the U.S., and 44% are pursuing cross-border payment capabilities, citing concerns about lagging competitors. Only 5% of U.S. merchants listed cross-border sales as a low priority.

We have also found online merchants prioritize mobile experience and global payments. Twenty percent of respondents cited improving their mobile customer experience as the highest priority, followed by 13% who cited “increasing payment methods” and 10% who cited expanding “cross border selling initiatives.”

And U.S. merchants want expansion in Asia/Pacific and Latin America. Thirty-eight percent of merchants expect growth from LATAM over the next year. Forty-one percent are expecting growth in APAC. In Latin America, Brazil will remain the largest retail e-commerce market, according to respondents.