The rise of ecommerce is continuing to grow at a rapid pace. The total transaction value of ecommerce worldwide is estimated to be $2,873,774 million in 2018. This is matched by an impressive number of online shoppers, 2,721 million estimated users in fact. This is almost 40% of the population worldwide. The US and China represent the biggest markets globally (when it comes to their online spending) whilst countries such as Argentina, India and Japan have an impressively high growth rate.
However, whilst these figures are striking, there are still barriers to the wider adoption of ecommerce. One of the most prominent factors is trust in the online store. Whilst the level of cross- border ecommerce is on the rise, there is still the tendency to stick to your own nation’s online stores or within a small radius. The following figure demonstrates the level of consumer confidence within the EU when shoppers buy online from a domestic store, and cross-border within the EU.
Taken from vzbv report
As you can see, the difference is stark, and this trend continues when EU consumers look further afield outside the EU. A recent study states that “EU consumers need much higher levels of confidence and trust in global online markets” if they are to fully take advantage of international ecommerce”. If this was achieved the difference could be reduced, boosting global trade substantially.
Fun fact: 21% of consumers who had bought a product from an online retailer (based outside the EU) during the last year were unaware of this fact when they made their purchase. (Which? survey, 2017)
Drivers and barriers for consumers to buy online
The list below demonstrates some of the drivers and barriers that consumer face when buying crossborder online.
- Reduced consumer protection
Consumers generally state that they do not know that their rights on the global marketplace. However they do understand that their rights within their own country/region and feel uncertainty when purchasing from further abroad.
- Poor quality of goods
Factors such as counterfeit goods or substandard quality often play on the mind of consumers before clicking buy. Is it worth it to save a few euros if the product isn’t up to scratch? Often that is enough to discourage a consumer.
- Concerns about delivery
Convenience is a key driver of ecommerce. This is also extending to delivery where consumers are wanting more efficient and cheap (preferably free!) options. So what happens when the delivery firm can’t be contacted easily or only in a different language? Perhaps after finding the perfect item the delivery is three weeks.
- Dispute resolution
No one like having a problem with their purchase, whether that be online or in-store. But I there is a problem consumers expect a clear way to resolve it. Legislation is catching up in this area with example such as the EU’s system. Without certainty with having the problem resolved and a lack of easy to understand information about this, consumers will shy away from global ecommerce.
Zooming in on Trust
Types of Online Trust
Trust is a very open term, and can extend to many aspects of the ‘customer journey’. When a consumer has decided to make a purchase, factors such as the transparency of the purchase process can play an important rule. For instance if charges are hidden until the last minute or if the product description is unclear, consumers can be put off the transaction. Below are two examples of the types of trust when dealing with online transactions. For a more in-depth analysis, check out ‘Do online shoppers actually trust your Webshop?’ report here.
Privacy and Security
Other factors can also play on a consumer’s mind when they are trying to buy online. Security and privacy are important criteria as well, with 22% of consumers never shopping online as they distrust the internet. A consumer’s personal information is important to them, and there is still a perception amongst certain consumers that online companies can be careless with their data.
Trust and the language barrier
“Developed markets such as the US, UK and China exhibit a stronger preference for global stores or those in their own language
- Paypal Cross-Border Consumer Research 2018
The latest research from PayPal highlights the global differences in ecommerce when it comes to language. When looking at those who don’t feel comfortable with making purchases on a foreign website in a nonnative language, the results are interesting. Consumers from English speaking countries such as the US, Canada, Australia and the UK agree with this sentiment the most, alongside other countries such as Russia and South Africa.
Trust marks: an independent way to increase trust in Ecommerce
One way to increase the trust that consumers have when purchasing online are trust marks, such as Safe.Shop. The graph below demonstrates this clearly. In this case consumers were asked:
As you can see 70% of consumers felt that this would have a positive impact on their trust for an online store.
Trust marks provide a visual indication that not only has a third-party verified the online store, but that the store itself has gone to the effort to prioritise gaining the confidence of potential consumers.
A vzbv report stated that:
“76% are more likely to choose a website with a trust mark.”
This is further illustrated from the perspective of SMEs when asked:
In terms of a direct and easy-to-implement strategy, displaying a trust mark is one of the top choices for ecommerce businesses.
Trust marks are great for small/medium sized online shops as well as those expecting new shoppers. This is because trust marks can act as a substitute for certain consumer trust points, such as previous experience with the online shop. This is backed by another report stating that shoppers will be more receptive to trust marks on an unfamiliar online store. This therefore suggests implementing a trust mark could be a great plan when targeting foreign markets.
A consumer’s confidence and trust when shopping online plays a crucial role in their decision to buy. In order to drive growth (and therefore revenue) boosting this confidence is key. By implementing this at all stages of the consumer journey, the growth of ecommerce has will only increase.
A crucial part of the puzzle in solving the trust issue is a trust mark. By putting forward a trusted third-party to verify an online shop, the trust barriers consumers encounter when shopping cros- border can be overcome.