Top tips for trading into Europe in 2018

By Will Gillingham

A certain event occurred in 2016. You might have noticed it. It’s the one that drove a shoehorn through the centre of the UK population? That’s the one.

No matter which side of that contentious fence you fell at the time, several factors have become abundantly clear in the interim years: firstly, the euro has rallied against the pound. Secondly, there’s been a surge in deliveries from the UK to Europe. And thirdly, ecommerce on the continent has flourished.

This winning combination (at least from a retail perspective) has caused the sometimes-nebulous practice of extending your brand overseas to become refreshingly clear: trading into Europe right now is probably a good idea. But just what do you need to know to get started? In this blog, we outline the fundamentals to give you a running start straight out of the gate. Let’s get to it.

A Youthful Vanguard

We would put good money on this one being common knowledge across the board, but that in no way lessens the absolute nature of the following statement, and absolutes are always worth filing somewhere prominent: there’s a generation gap in online buying.

Young people are buying online more than older people. Hardwire that fact into your cross-border proposition: it’s irrefutable, and therefore valuable.

PostNord have found that the breakpoint is specifically hinged on those aged 50. This is the age where ‘the propensity to shop online starts to decline sharply’. While in time, age is likely to have no impact on whether someone is buying online, for now, it’s clear-cut: ecommerce success beckons for a youthful approach.

Fashionable, new-trend products are destined for glory on the continent. There’s no two ways about it.

Girl looking at phone

The Local Touch

Nobody likes an outsider. For your brand to succeed, you need to integrate into the community. But what exactly does ‘localisation’ entail? Olof Källgren, Market Information Manager at Direct Link (PostNord’s arm outside of the Nordics), has outlined the six essentials for seamless trade:

  • Customer Service: Customers are going to want to contact you, and when they do, they are going to want to ring a local telephone number and speak their native language.
  • Legislation: Different countries have different rules and expectations. Ensure you’re abiding by them.
  • Payment: Cash and card may well be the popular payment methods in the UK, but it’s a different story in Europe. Make sure your customers can pay how they want to (we’ll touch on this a little bit further on).
  • Local Look: Research websites and high street stores of other local outlets, and make sure your look isn’t complex or unusual to a first-time user.
  • Delivery: Surprisingly, home delivery isn’t a universal preference. Make sure you understand the offering your customers will gravitate towards (we’ll explore this further on as well).
  • Returns: Now and again, your customers are going to want to return products. That’s just the way of things. You need to offer an easy and cheap returns procedure, or risk losing custom.

Hunt the Big Fish

Prize bait in an empty pond will do you no favours. It goes without saying that some countries in Europe have larger populations, are more technologically advanced, and are more economically stable. Predictably, it is these countries which are excelling in the ecommerce arena, and it’s these which you should be eyeing up as potential investments.

The three largest markets in Europe are the UK, Germany, and France, and these account for more than half of the total ecommerce expenditure in the continent.

But there are a host of countries which are viable for cross-border trade. The Nordics are ripe for ecommerce, as well as relatively smaller (but nevertheless upcoming) markets such as Spain and Italy. Without doing an injustice to their writing through paraphrasing, I will simply say that PostNord have recently published a comprehensive study which divulges pertinent information on every worthwhile country for ecommerce. Give it a look here.

Holding the world in the palm of your hand

A Range of Payments

It’s not all coins and plastic in Europe. Bank transfers have found a niche in certain countries, while in others, payment services such as PayPal are seeing a considerable share of the limelight. And while cards are mostly prevalent, their nature changes depending on the borders which you find yourself within.

A sizeable portion of the Italian population are unbanked, for example, and prefer instead to buy prepaid cards to conduct online payments. And in the Netherlands, the homegrown payment system iDEAL has taken precedence among the population, which allows for direct online transfers straight from customers’ bank accounts.

How populations pay is a crucial question which needs to be answered before cross-border trade is attempted. For immediate access to payments information, both PostNord and JP Morgan have conducted exhaustive analysis on payments in Europe. JP Morgan’s can be found here, while PostNord’s is included in their study: ‘E-commerce in Europe 2018’.

Versatile Delivery

Not only does delivery in Europe need to be rapid, it also requires an awareness of the type of delivery customers will be expecting.

European shoppers are, collectively, an impatient bunch. While on average, the various countries expect items to arrive between 3 and 4 days, there are contingents in each region which require a more instant service: more than one in three customers in the Netherlands expect a package within 2 days, for instance, and, as I’m sure any reader will be intimately aware, same and next day delivery are now well-established propositions.

But in the era of instant gratification, this is almost a given. What is perhaps less widely known is that home delivery isn’t as unanimously popular as you might think.

While home delivery (delivering either to the buyer’s hand or through the letterbox) is dominant in Europe, France and the Nordics particularly have another broadly popular method of delivery: collection from a distribution point. Roughly 25% of French shoppers and 30% of Nordic shoppers would rather have the agency to pick up purchases in their own time, and retailers should ensure this type of facility is in place before setting sail for their desired destination.

Map on a table

A Continental Buffet

Europe represents a tangible opportunity for any aspirational retailers looking to expand. And with the considerable uplift in Europeans buying online from UK retailers in the past 2 years, it’s also a nation receptive to UK products.

In short, it’s worth having a serious think about cross-border trade into Europe. We’re now in a ‘golden window’ to establish a retail presence in Europe, and any retailer toying with the idea should take the initiative before others inevitably begin to saturate the European market.

To obtain a complete picture on trading into Europe, download PostNord’s report here: E-commerce in Europe 2018.

Will Gillingham, Content Executive, IMRG

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