If you’ve ever tried to order a product from a company in another country that doesn’t sell across borders (or has extremely high shipping costs to do so), you may have encountered mailbox services. These third-party “freight forwarders” set up a domestic address in the US where international shoppers can ship packages. From there, the packages will get forwarded to the shopper’s home address.
Benefits of Using a Mailbox Service
The benefits of these services for the shopper are the reduced shipping costs, as well as access to retailers that don’t ship to their country. Retailers benefit by gaining a customer that they wouldn’t ordinarily, and at a low cost.
Cons of using Mailbox Services
Mailbox services were often the best solution before retailers began focusing more on international retail and shoppers couldn’t always shop across borders. Now, with solutions such as ESW’s, selling internationally has become a strategic growth driver.
Using a solution that helps minimize shipping times and costs and provides a localized experience to the customer will ultimately increase brand loyalty, repeat purchasing, and customer lifetime value. By giving up control to an intermediary, the retailer loses visibility and the opportunity to build a relationship with the customer. They will know they have a shopper from Brazil on the site, but then the order is shipped to the US. So, they don’t really know anything about the customer, who will fall into a ‘US shopper’ segment, which can mean that US data is also contaminated. So, it’s harder – if not impossible – to market to this shopper properly or do targeted marketing on an international scale.
Subsequently, the delivery journey for the package becomes more complex. There are now two stages – from the retailer to the mailbox service and from the mailbox service to the shopper, which means twice the risk of goods being lost, damaged or delayed. As far as the retailer is concerned, the package is successfully delivered when it arrives at the mailbox depot – usually in a much shorter timeframe than it takes to make it into the customer’s hands. This has subsequent impacts on the quality of the customer experience, from end to end.
For example, if the customer wants to return the package and they call or email customer service, the agent will see that the package shipped to the US and will likely be confused as to why the shopper is attempting to return it from Brazil. If there is a restriction on the number of days the customer must return the item, that window may be impacted by the difference between the successful delivery to the mailbox and the time the customer actually receives the item. There’s a disconnect when you don’t own the entire journey, including shipping, returns, and customer service – without total control and visibility, it’s tough to service that customer properly.
Finally, payment can be a problem. A payment is more likely to get a fraud flag if an international card is used with a domestic address vs. a shopper using a card issued in the same country as the delivery address.
By partnering with retailers and giving them a 360 degree view of their international customer data while improving the payment, shipping, and returns experience for the shopper, we see their international volumes increase by 87% on average overall.
How Can Retailers Improve the Experience for Cross-Border Shoppers?
Retailers who are trying to figure out how to build their businesses internationally should start by analyzing their current website traffic. Countries showing demand from a high concentration of IP addresses should be a priority in creating a localized customer experience.
Mailbox services prove there’s demand for your product. Working with a provider like ESW will drive more business, create brand loyalty and awareness, and overall create a better customer experience for the shopper, which will result in increased conversion.
If you’d like to find out more about how ESW can help your ecommerce business expand internationally, contact our Sales team here.