Are UK Consumers Open to Cross-Border Commerce?

Four out of five Brits say they would consider purchasing online from merchants in another country. In fact, 44% of UK consumers have already done so, and another 36% are open to the idea. That 80% can be an opportunity or a threat for your business, depending upon your geographical location. If you’re a merchant based outside the UK, you might see these shoppers as an attractive opportunity for expansion of your brand and sales. As a British retailer, however, you need to acknowledge that you are now competing on a global rather than national stage. In either case, understanding these consumers and the drivers behind their shopping behaviour is critical to your success.

80% of Brits Would Consider Purchasing From a Merchant Outside the UK

Men Are More Likely to Have Purchased Outside the UK

Men are more likely to have purchased cross-border. And the younger the consumer, the more likely they’ve already bought from a retailer outside the UK. A majority of those under 35 have purchased internationally, with the proportion declining as age increases.

Younger Consumers are More Likely to Have Purchased Outside the UK

How Prevalent Is Cross-Border Purchasing?

One-fifth of those purchasing internationally buy at least once a week, and another 18% do so 1-3 times a month. These groups have already developed a habit of shopping cross-border. The other 62% can be classified as occasional shoppers, purchasing every 2-3 months or less often.

Frequency of Purchasing Outside the UK

• Once a week
• 1-3 times a month
• Every 2-3 months
• < Every 3 months

Looking at shopping behaviour by age, we see that the 25-34 and 35-44 year-olds are the most likely to regularly purchase cross-border. One-third of the purchasers in each of these age groups buys at least once a week.

What Countries Are Top Picks for Cross-Border Purchasing?

We asked UK consumers what countries they’ve already purchased from and which ones they would consider in the future. Not surprisingly, the US topped both lists, with 78% open to buying from the US and 56% having already completed such a purchase. The European neighbours also rank high as countries where UK consumers are willing to purchase, with France (59%), Germany (58%) and Italy (46%) leading the charge, followed by Canada (45%), Spain (43%), China (42%), Sweden (41%) and Japan (39%).

However, merchants from most of these countries have failed to tap into that potential yet. China and the US are the only two countries currently realising their opportunities in this market. Forty-four percent of UK consumers have made a purchase from China. The next most frequent purchase locations are Germany (20%) and France (15%). The gap between those consumers open to purchasing from another country and those actually doing so represents an opportunity for international retailers to gain market share and a potential threat for UK merchants to lose customers.

Want more like this?

Want more like this?

Insight delivered to your inbox

Keep up to date with our free email. Hand picked whitepapers and posts from our blog, as well as exclusive videos and webinar invitations keep our Users one step ahead.

sign up

By clicking 'SIGN UP', you agree to our Terms of Use and Privacy Policy

SIGN UP

By clicking 'SIGN UP', you agree to our Terms of Use and Privacy Policy

Why Cross the Border to Purchase?

When we asked cross-border shoppers why they bought from retailers outside the UK, two reasons dominated their responses: unique merchandise (62%) and better prices (50%). This shouldn’t come as a surprise, as both are generally the most common reasons for choosing one merchant over another. The difference now is that the list of retailers that consumers can choose from has grown exponentially. Other common reasons for cross-border purchasing were safe online payment methods (28%), good quality merchandise (22%), gift-giving (13%) and owning something different from friends and neighbours (12%).

What Barriers Restrict Cross-Border Purchasing?

With the vast majority of consumers (87%) seeing barriers when considering a retailer outside the UK, it’s apparent that there are still numerous challenges to cross-border shopping.

Most Consumers See Barriers to International Purchasing

The single greatest barrier is shipping costs, identified by nearly two-thirds of UK consumers, followed by a host of other issues, including fear of hidden costs, lack of trust in online payment methods and concerns about security. While this might be considered good news for British retailers, international merchants should put measures in place to overcome these barriers and encourage business with UK customers.

Winning Strategies in a Changing Retail Landscape

The data is pretty clear – the UK market is fertile ground for non-UK merchants looking to find new customers. A full 80% of British consumers are open to cross-border ecommerce, providing that retailers overcome some significant challenges to the current purchase process.

If you’re a British retailer, now’s the time to prepare for the increased competition for your home market. To defend against poaching, focus on the reasons why consumers stray: unique merchandise and better pricing. Also look to exploit the advantages of the home territory. For instance, if you have bricks-and-mortar locations, consider offering ‘click and collect’ and ‘buy online, return in-store’ options for added customer convenience. And make sure all aspects of the transaction, such as shipping costs, delivery time and data security, are clearly addressed early in the purchasing process.

Finally, now might be a good time to seek new markets in other countries. In separate reports, we will assess opportunities for expansion in the US and Australia. Other European countries also provide a logical target. While this research does not address their receptivity to UK merchants, a few small strategic tests should provide guidance on entering those markets. An outbound marketing effort, combined with an analysis of your website data, can help you define the size and costs of the opportunity.