Photo: Wikimedia Commons
Today the search for the world’s best customers routinely takes retailers across international borders, and many American merchants are finding big spenders in new markets.The stakes are high: JP Morgan estimates that global e-commerce will grow by 20 per cent this year, to $680 billion worldwide.
Much of this growth will come from “power shoppers,” elite consumers who annually outspend 90% of their peers.
Power shoppers place bigger orders, they come back sooner, and they buy more frequently. For merchants selling internationally through FiftyOne Global Ecommerce, cross-border power shoppers accounted for more than 40 per cent of 2010 sales, and more than half in many countries.
Power shoppers were easier to find in some places than others, though, and their spending patterns were remarkably different around the world.
Where they Live
Canada produced the most cross-border power shoppers (37 per cent of the worldwide total), followed by Europe (26 per cent, with roughly a quarter of those coming from the UK) and Australia/New Zealand (19 per cent).
Relatively low shipping rates from the U.S. and a strengthening currency probably contributed to Canadians’ enthusiasm for American brands. Australians, too, saw their money go further on U.S. retail sites thanks to a favourable exchange rate. They were also twice as likely as Canadians and Europeans to become power shoppers: One-in-six Australian consumers placed within the top 10 per cent globally.
The Middle East, while contributing a smaller overall percentage of cross-border shoppers, was home to the world’s highest concentration of big spenders—35 per cent of Middle Eastern consumers were power shoppers. American merchants also found a high percentage of power shoppers throughout Asia, where one-in-five consumers reached the top decile.
What they Spend
Big carts distinguished power shoppers from their counterparts, especially in the Middle East and Asia where their average order values (AOVs) topped $500 USD—more than double other shoppers’ AOVs, and 30 to 40 per cent higher than other power shoppers’ AOVs. In Canada and Europe the difference between power shoppers and others was even greater, exceeding 200 per cent.
Wherever they were found, the value of cross-border power shoppers became surprisingly similar when their annual expeditures were compared. Canadian power shoppers submitted relatively small carts, but they ordered far more frequently than others, pushing their annual spend above Australian and European power shoppers, and above the global average.
While order frequency blurred the distinction between different regions’ power shoppers, it dramatically sharpened the disparity between power shoppers and others.
On average, cross-border power shoppers spent 500 to 600 per cent more in 2010.
A key factor in this disparity was power shoppers’ tendency to place larger and larger orders after their initial purchases. Merchants’ investments in developing loyalty through positive customer experiences clearly paid off in these cases. They paid off in other cases, too: Even those multibuyers that didn’t qualify as power shoppers followed this pattern, spending more
when they came back, as though their first orders were essentially tests of merchants’ cross-border ecommerce offerings.
If cross-border shoppers are especially inclined to test merchants before committing to becoming regular customers—potentially even power shoppers—then acing these tests is the key to global success. Delivering a strong international shopping experience may be even more important than efforts to find new customers, not only for long-term brand development, but for near-term revenue growth, as well.