UK E-Tailers Need To Wake Up To The Market Opportunity Of International Business

UK e-tailers in sectors such as tourism, home improvements and fashion should be actively exploiting the weak pound and easy international delivery to provide additional sales opportunities and access new markets. Yet with few able to accept international address information via ecommerce sites, despite its technical ease, companies are missing out on a significant market opportunity.

In a tough marketplace, British companies need to consider a simple, low cost route to business expansion. The simple provision of additional language-friendly forms and international address look-up should be a key component of every e-tail site.

International Opportunity

With domestic growth still severely constrained, UK businesses should be looking to exploit the weak pound to expand into international markets. And some are. Activity at British factories increased at the fastest rate in more than 15 years in May, according to the Purchasing Managers’ Index of activity. Meanwhile, tourism is soaring across the UK as individuals from China, the US and Indonesia make the most of the attractive exchange rate.

Yet in a recent survey of 100 websites of UK internet e-tailers, only 1% were geared up for European or international delivery addresses. Almost all of these sites therefore automatically assume purchasers will be UK-based. Yet in what is an increasingly international market place, the UK’s parochial approach to online sales will do little to entice eager international visitors, and as a result will constrain exports and reduce potential profits.

So what is deterring UK e-tailers from offering a service to satisfy pent-up international demand? A key concern is the accuracy of address information and potential overheads associated with delivery delays, re-shipping and insurance. These concerns have merit – one of the major overheads for any e-tailer is managing genuine returns. There is no need to add extra cost to a business as a result of inaccurate address information. Furthermore, timeliness of delivery is key to customer service and boosting customer loyalty, so delays caused by lost or misplaced goods or documentation simply cannot be afforded.

Simple Approach

But if a solution is to be found, its ease of use cannot be underestimated. Indeed, figures from Marketing Sherpa show that 27% of website visitors abandon the checkout process due to ‘not having enough time to complete the process’. Since typing in a full address – rather than just a postcode – can consume up to 80% of the time spent inputting delivery information, and yet more if errors are made, organisations considering international sales need to put in place a solution that is as quick and easy as the best postcode lookup solutions in the UK.

But, of course, this is far from straightforward – and requires more than simply amending web forms to reflect different languages and terminology, such as referring to ‘zip codes’ rather than ‘postcodes’.

Addresses are structured differently in countries across the world, whilst data accuracy, costs and licensing agreements all vary according to national postal authorities. The Royal Mail’s postal address database of 28 million addresses is widely accepted to be the most accurate in the world, providing an excellent source upon which developers can create postcode look-up algorithms.

In the US, by contrast, where there are approximately 113 million households and 43 million zip code records in the database, mail can only be addressed by name, and the address information is harder to keep up to date than the UK database.

Streamlined Model

This global variance in address accuracy and structure, as well as postal authority strategy, creates significant complexity for any company looking to expand internationally. It is not a minor task to develop address-matching algorithms to match zip codes to addresses, or to manage the different licensing arrangements for each country. So how can UK businesses begin to exploit global opportunities without incurring major development overheads?

The key is to achieve a degree of standardisation. Organisations can now leverage address look-up technology that outputs addresses in the Universal Postal Union (UPU) (the United Nation’s addressing department) Standard S42 format. This internationally-recognised address format has been approved by each postal operator involved, enabling companies to be confident that checked mail will be processed as efficiently as possible within the countries, speeding up delivery and ensuring it gets to the addressee first time – an instant relief for many e-tailers.

And with pricing based on a pay as you go model, organisations do not need to worry about individual licensing and cost arrangements with each national postal authority. There are no capital costs for set up, providing any business with a low cost entry into a global marketplace.

Conclusion

The demand for accurate, easy-to-use international address look-up is increasing rapidly. Indeed, the Global Address Data Association has recently been set up to address postal inefficiencies and help improve international postal delivery. However, for UK retailers, the opportunity for global expansion is right now. Any business failing to exploit current exchange rates is missing a major opportunity. If simply adding this technology to an existing e-tail site can open up massive new markets and opportunities, can any business afford to miss out?

Emma Gooderham is Managing Director of WorldAddresses. Based in the UK, WorldAddresses is a hosted Web service that delivers address data to Web applications across the Internet. Emma's achievements include gaining the Chartered Institute of Marketing's Professional Postgraduate Diploma in 2008. She is also the voice of the customers on the PAF Advisory Board.