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Ecommerce Opens the World to Traditional Retailers

Online platforms open up the possibility to reach the world without opening new stores for retailers

April 24, 2014

There’s no question that the world of online shopping has given brick-and-mortar chains headaches. Some have adapted, while others, such as Blockbuster, Tower Records and Borders, have not. But it’s not all doom and gloom for traditional retailers. Even as ecommerce brings new competitors, it also opens up international markets in a cheap and scalable way. With a good website and a fulfillment strategy, retailers can reach the world without opening new stores.

OC&C Strategy Consultants estimated that 7% of total US retail ecommerce sales in 2014 would come from overseas markets. Combine that with eMarketer projections for US retail ecommerce sales of $304.1 billion in 2014, and the value of global sales for US sites exceeds $20 billion.

Pitney Bowes surveyed major retailers in late 2013 and found that they all had some portion of their sales from overseas. The items with the most international demand were fashion and consumer electronics, according to Jim Hendrickson, vice president and general manager of logistics solutions for the company. And while trade with Europe still made up the biggest chunk, wealthy cities in Asia-Pacific had been buying more.

Luxury brands have benefited the most from this international demand, and they’re doing what they can to accommodate it. Saks Fifth Avenue, Macy’s and Neiman Marcus all have a clear tab on their websites for international visitors. Although some, including Saks, have opened a limited number of international stores, they are mostly meeting this demand through their ecommerce sites. Macy’s, for instance, lets international visitors pay in their preferred currency and ships to over 100 countries.

There’s no sign that international ecommerce is slowing down. OC&C predicted that 16% of online US retail sales would come from international customers in 2020. It’s a good example of how ecommerce can add to, not just replace, in-store sales.

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