22/11/2019 – What companies should keep in mind — auf Deutsch lesen
Entering the US market
Companies wishing to enter the US e-commerce business should not only be familiar with the local market and their target group.
After China, the United States of America are already the world’s top e-commerce nation – and user numbers and revenues continue to rise. Yet, companies wishing to enter the US e-commerce business should not only be familiar with the local market and their target group. A critical success factor that is often underestimated is the strategic planning of logistics processes.
E-Commerce: Key Figures are rising
This year, a total of 270m US citizens are using the internet for their purchases – an ascending trend. By 2023, Statista predicts a growth in e-users of almost 9 percent to a total of 90.8 percent. Likewise, the turnover is expected to increase further: While American e-shoppers generated a total of 443.7bn euros last year, this figure is expected to rise up to around 485bn euros this year – an increase of eight percent. For 2023, Statista forecasts a total turnover of 655.7bn euros for the US e-commerce market.
Millennials love fashion
Fashion and clothing are among the top segments in the USA. At 52 percent, women shop online slightly more often than men. Around 26 percent of e-commerce sales are generated by the millennial group, i.e. e-shoppers between the ages of 25 and 34, followed by the age group 35 to 44. The average revenue per e-shopper currently comes up to approximately 1,795 euros. In comparison: the average revenue in Germany amounts up to roughly 899 euros – and thus around half of the US figure.
Cross-border logistics decisive for success
US consumers are considered impatient when it comes to the delivery time of their goods. As a consequence, an increasing number of retailers are offering same-day delivery. However, given the enormous size of the country, same-day delivery is not a possible option for the entire territory. Extensive know-how is required regarding efficient logistics along the tradelane and up to the US customers’door. Incorrect planning, such as supplying to an “unsuitable” warehouse, can result in severe financial losses, as transport across the country can quickly cost many hundreds of euros due to its geographical dimensions.
Warehousing and customs
Strategic logistics planning and delivery within a few days are important success factors when entering the US market. This time span can hardly be realized for direct shipments from Europe. Dealers are therefore well advised to store goods locally and to be familiar with the local warehousing options. In addition, it is essential for companies to report additional costs for customs and shipping transparently, in order to avoid unpleasant surprises for the customers. After all, those might quickly result in negative reviews, which can do significant damage to business in the USA as well as in Europe.
Whitepaper answers key questions
As a guidance for interested companies, Hermes International, a division of Hermes Germany, provides a Whitepaper (in German) answering numerous questions related to a US market entry. The document „Markteintritt USA – Erfolgsfaktor strategische Logistikplanung” (Market Entry USA – Strategic Logistics Planning leads to Success) provides companies with information on tradelanes between the EU and the United States, as well as interesting insights into the advantages and disadvantages of a single- compared to a multi-marketplace strategy, and much more.