E-commerce Benchmark DataKey Insights for Improving Your Online Sales Strategy

The global e-commerce market is evolving faster than ever.

Global B2C e-commerce spending will hit $1.5 trillion in 2014.

That’s a 20.1% lift from 2013.

eMarketer: “Global B2C Ecommerce Sales to Hit $1.5 Trillion This Year Driven by Growth in Emerging Markets”. 2/3/14.

By 2018, 47.3% of all internet users in the world will have made at least one online purchase.

RetailCustomerExperience.com: “Worldwide e-commerce sales to increase nearly 20 percent in 2014”. 7/24/14.

US online shoppers alone will spend $304.1 billion in 2014, and an anticipated $491 billion in 2018.

Statista: “U.S. retail e-commerce sales from 2010 to 2018 (in billion U.S. dollars)”. 2014.

APAC customers will outspend US customers for the first time in 2014.

Asia-Pacific is now the largest and fastest growing e-commerce market on the planet.

eMarketer: “Global B2C Ecommerce Sales to Hit $1.5 Trillion This Year Driven by Growth in Emerging Markets”. 2/3/14.

How can you make sure your e-commerce experience

stays properly localized for every customer, in every country?

You need benchmark data.

We can help. But first things first — hello.

We are cleverbridge.We’re a global e-commerce solutions provider powered by proven expertise and leading technology.

We process over 1 million transactions per month

in more than 250 countries.

About 80% of our gross revenue is generated here:

United States CanadaGermany AustraliaUnited Kingdom SwitzerlandJapan The NetherlandsFrance Italy

But we’ve processed transactions all over the place.

Including Antarctica, Christmas Island, Vatican City (0.2 sq. mi) and the Pitcairn Islands (population: 56).

Let’s dig in.

We’re sharing this data in the spirit of best practices, great customer experiences

and outstanding e-commerce.

E-commerce Benchmark:Language

English is the global language of e-commerce.

More than 60% of transactions worldwide occur in English.

Native Languages

In many countries, including the US, UK, Germany, Japan, France and Australia, the bulk of transactions (90+%) occur in the language you’d expect ‒ the native language of that country.

In the US, 99.40% of orders occur in English.

But there are exceptions.

In Canada, Italy, the Netherlands and Switzerland, the percentage of orders place in the native language is much lower — in the 80th, or even 70th, percentile.

16.5% of online transactions in Canada occur in French.

In Italy, 1.9% of transactions occur in German — and 8.5% are in English.

The dominant language used by online shoppers in Mexicois English. Spanish doesn’t even come close!

What does all this mean?

The secondary languages in some countries with high concentrations of online shoppers are asserting themselves during the e-commerce experience in ways that are meaningful for your business.

Here’s the takeaway.

In order to localize your e-commerce experience and convert the most customers, you need to speak their language.

Quite literally.

Avoid making assumptions about which language to use.

GeoIP technology can identify your customer’s default browser language. Use that data to inform which language displays before, during and after checkout.

If you run email marketing campaigns in countries with significant secondary language usage, you need to continue communicating with customers in their preferred language.

E-commerce Benchmark:Currency

Native Currencies

In most countries with a robust e-commerce market, most transactions take place in that country’s native currency.

In the US In Germany In the UK In Japan

But there are exceptions.

In Australia, Canada and Switzerland, the native currency also dominates — but there is a significant percentage of online orders in non-native currencies.

In this situation, the “other” currency is almost always USD.

In Australia, only 82% of online orders are in AUS Dollar;17% of orders are placed in USD.

In Canada, only 78% of online orders are in CA Dollar;USD accounts for 23% of orders.

In Switzerland, only 74% of orders are in Swiss Franc;10.5% of orders are in USD – and 15.3% are in Euro.

What does all this mean?

If a non-US customer can access a US store where the currency conversion rate is 10%, 15% or even 20% in their favor, where do you think they’re going to purchase?

Admit it. You’d do the same thing.

Here’s the takeaway.

You can avoid losing revenue by locking down prices in the native currency of each country you’re selling in.

Make sure that your pricing is optimized for every region so that your customers don’t have reason to hunt for better prices in foreign stores.

E-commerce Benchmark:Payment Methods

Global Payment Trends

Credit cards and PayPal dominate – they’re used for a combined 90% of all online orders worldwide.

PayPal has been consistently on the rise from 2006 (when usage was at a mere 9.3%) and now accounts for over 20% of global e-transactions.

PayPal moved $180 billion in 26 currencies across 193 countries

in 2013, and its revenue lifted 20% — to $6.6 billion worldwide.

Forbes: “Can PayPal Beat Apple, Google, Amazon And Icahn In The Wallet Wars?”. 2/12/14.

Global Payment Trends

PayPal and credit cards are seeing success at the expense of wire transfers and direct debit.

Wire transfers and direct debit have been declining since 2007. That’s the year wire transfers and direct debit usage peaked – wire transfers at 19%, and direct debit at 14%.

US Payment Trends

PayPal usage is steadily rising.

Though credit cards are still the most popular payment method by a wide margin, that popularity is slowly waning.

UK Payment Trends

Customers in the UK dig PayPal even more than Americans do – it’s used for nearly 40% of online transactions.

In 2014, credit cards accounted for about 65% of all online transactions in the UK, down from almost 100% in 2005.

In the US and UK, two main payment methods (PayPal and credit cards)

dominate e-commerce.

Germany is different.

German Payment Trends

PayPal is the top payment method, followed (in order) by credit cards, Direct Debit and wire transfers.

All four methods have significant market share.

Here’s the takeaway.

Your business should be supporting credit cards, PayPal, Direct Debit and wire transfers at the bare minimum.

But you already knew that.

Let’s look at four payment methods that you should strongly consider adding to your repertoire:

Konbini Swedish Real-Time BankingBoleto Bancario German Direct Debit

Payment Method:Konbini

When the customer chooses Konbini as their payment method, online checkout generates a payment slip with full transaction details.

The customer takes this payment slip to a konbini (a Japanese convenience store), where they pay the balance.

Once the payment is made in full, the retailer delivers the product.

What is Konbini?

In Japan, credit cards dominate at 59.5% of online transactions. At its peak in 2009, PayPal was used for about 10% of purchases.

Konbini has been taking market share from PayPal. In 2011, Konbini surpassed PayPal in usage – it’s still on the rise.

Across all industries in Japanese e-commerce, Konbini enjoys a healthy market share of 16.6%.

How popular is it?

You should accept Konbini as a payment method in Japan.

Here’s why.

Companies who did not offer Konbini saw an average conversion rate in Japan of 14.1%.

The average Japanese conversion rate of companies who did offer Konbini was 19.7%.

That’s nearly a 40% lift in conversion rate for companies who made Konbini available.

Adoption Test: 2012-2014

Data suggests that just having Konbini in the cart appeals to the Japanese customer, even if they don’t ultimately choose to pay with Konbini.

Adoption Test: 2012-2014

Payment Method:Boleto Bancario

Boleto Bancario is a consumer push payment method that relies on the customer visiting a physical bank office to pay for their online order.

Once the customer pays the transaction balance at the bank office, the retailer delivers the product.

What is Boleto Bancario?

Brazil’s market is similar to Japan’s in that credit cards still dominate, but Boleto Bancario is taking market share from PayPal.

Overall, Boleto Bancario is used for about 20% of all online purchases in Brazil.

How popular is it?

You should accept Boleto Bancarioas a payment method in Brazil.

Here’s why.

Companies who did not offer Boleto Bancario saw an average 3.5% conversion rate in Brazil.

Those who did make Boleto Bancario available had an average conversion rate of 4.8%.

While it may not seem like a huge difference, it’s a 37% lift in conversion rate – if you’re getting 100,000 orders a year, that’s an extra 32,000 orders!

Adoption Test: 2012-2014

The data suggests that just having Boleto Bancarioin the cart appeals to the customer, even if they don’t ultimately choose to pay with Boleto Bancario.

Adoption Test: 2012-2014

Payment Method:German Direct Debit

German Direct Debit — or ElektronischesLastschriftverfahren (ELV) — allows a customer to authorize a retailer to debit their account for a fixed amount, for any future invoices, or for recurring payments.

What is German Direct Debit?

We’re seeing German Direct Debit used for about 20% of online transactions in Germany.

This percentage has been inching closer to German online credit card usage (which, in 2014, was about 25%) for a few years now.

How popular is it?

You should accept Direct Debit as a payment method in Germany.

Here’s why.

Companies who did not offer German Direct Debit had an average conversion rate in Germany of 10.6%.

Compare that to an average conversion rate of 14.9% for companies who did offer German Direct Debit.

This is a 40.5% lift in conversion rate for companies who make German Direct Debit available.

Adoption Test: 2012-2014

Not all German customers are comfortable with submitting their credit card information online. Offering German Direct Debit as a payment method is proven to convert more online shoppers in this market.

Data suggests that just having German Direct Debit in the cart appeals to customers, even if they don’t ultimately choose it as their payment method.

Adoption Test: 2012-2014

Payment Method:Swedish Real-Time Banking

When making an online purchase, the customer authorizes payment in their own online banking account.

Immediately upon authorization, the retailer receives an automated payment confirmation from the customer’s bank.

Customers have access to major Swedish banks, including Nordea, Handelsbanken and SEB.

What is Swedish Real-Time Banking?

Swish, a popular app owned by six Swedish banks that allows customers to make real-time payments using their mobile phones, hit 1 million users in August 2014.

Equens: “Real-time payments in Sweden: one million users and still counting”. 8/12/14.

How popular is it?

You should accept Real-Time Banking as a payment method in Sweden.

Here’s why.

We’re running a test in the Swedish e-commerce market on customers with Euro as their selected currency.

The goal is to see if offering Swedish Real-Time Banking as a payment method enables an optimized reach of the Swedish market.

Adoption Test: Ongoing

Looking good so far!

Data has yielded an average conversion rate increase of 6%, with some companies seeing conversion rate increases as high as 12%.

And we expect to see further conversion increases as we continue testing.

Adoption Test: Ongoing

Conclusions

Data your business.

It casts light on the dark corners of unfamiliar markets. It shines on new opportunities for growth and development.

It brightens your path as you pave it.

There are three simple processes for collecting data that will boost your business to the next level.

1 Testing

→ Testing is not just the best way to find out what stimulates conversions — it’s the only way.

→ Use GeoIP technology to collect data on your customer’s browser language, location, etc. and apply it to your product page and shopping cart.

→ Controlled, thoughtful testing will reveal what resonates with customers in different markets.

2 Tweaking

→ Do your research. Build on a foundation of proven best practices.

→ Tweak your merchandising.

→ Tweak your messaging.

→ Work at customizing your entire e-commerce experience, from cart to checkout to post-purchase support, so that it feels familiar, safe and secure for shoppers in every market.

3 Taking Notes

→ Track behavioral and transactional patterns.

→ Identify trends that develop over time.

→ Use robust analytics to collect data about your customers and how they engage with your product pages and shopping cart.

→ Where are shoppers dropping off during your purchase process? Why?

Though it’s data that drives your development, there’s always an element of intuition involved.

Trust the facts – and trust your gut. After all, you’re a customer, too.

Let’s get to work.To learn how cleverbridge e-commerce solutions can help you earn customers and increase global revenue, email sales@cleverbridge.com.