Global consumers have an appetite for U.S. goods, but American e-commerce merchants are making it too hard to pay, according to PayPal-sponsored research.
In a twist to its typical consumer surveys, PayPal commissioned Ipsos MORI to ask 1,214 U.S. e-commerce merchants questions about how they serve foreign customers — and compared the data to prior foreign consumer surveys. The survey was conducted in the last two months of 2015.
"This is the first time we did it centering on merchant insights from across six countries they serve and were able to juxtapose [the responses] to determine if merchants are actually delivering what the consumer wants," said Melissa O'Malley, director of global initiatives for PayPal. O'Malley directed the research, which was available to all e-commerce merchants, not just PayPal clients.
The results in comparing the surveys revealed merchants are doing many things correctly, but lack in some areas such as currency options and offering different languages on a site — despite clear indications from consumers that is exactly what they are seeking when making purchases from U.S. sites.
"It was kind of like a couple married for a long time, in which one partner says what they want, and the other thinks they are doing what their partner wants, but are really just doing what they themselves want," O'Malley said.
Past PayPal consumer research has indicated younger consumers are becoming more comfortable shopping globally and are generally more trusting of foreign websites, but this latest research shows merchants need to make adjustments to get the most cross-border transaction value possible.
Payment method preferences vary with each country, but only 35% of U.S. merchants indicated they offer methods that target a specific market. While consumer appetite for shopping or product comparisons through mobile devices continues to grow, only 54% of merchants offer a mobile website, while 17% don't optimize for mobile at all.
Fewer than two in five U.S. cross-border merchants use search engine optimization, while most international shoppers find products through search engines. Only 12% of the merchants viewed website security concerns as a cause for cart abandonment, but Brazilian shoppers at 29% and British shoppers at 26% cite security worries as a major reason they would abandon a purchase.
PayPal is a top preferred cross-border payment method in many markets, but O'Malley said consumers like other options as well and a merchant site can "change its ability to address that market" by providing options those consumers want.
The survey revealed that Canada is the most attractive market for U.S. merchants to secure cross-border transactions with 41% saying their neighbors to the north provided the most cross-border transaction value. Canada is followed by the U.K. at 8% and Brazil at 5%. As a region, Europe provides 25% of cross-border sales.
Half of the U.S. merchants said they had already developed a presence on a global marketplace site, a move that some initiate rather than making numerous currency or language changes on their own site, O'Malley said. Still, only 19% of U.S. merchants offer a language other than English on their sites, she added.
"You have to have multiple languages to attract cross-border transactions," O'Malley said. As an example, 21% of Canadians speak French, but that language is offered on only 9% of U.S. merchant sites, she added.
"The biggest reason for cart abandonment on cross-border purchases is because the checkout page isn't in their language," O'Malley said. "That's an easy layup right there, for U.S. merchants to add French for Canadian customers."
U.S. merchants also have to break the Portuguese language barrier to attract more business out of Brazil, where 26% of the country's shoppers said they expect to increase their cross-border spending over the next year. Currently, none of the merchants offer a Portuguese language option at checkout.
U.S. merchants also have to provide the currency option for Brazilian consumers to conduct a transaction in the Brazilian real.
Despite the many fluctuations in Brazil's real, as many as 46% of consumers say they would not feel comfortable making a purchase in any other currency. "That's pretty high," O'Malley said.
With the research in hand, PayPal can approach e-commerce merchants and say that consumers simply want transparency about payment options, shipping costs, security, taxes and duties, currency and language, O'Malley said. It is important information for U.S. merchants to consider in their planning, as one in three surveyed currently only selling domestically said they intend to start selling cross-border in the next year.
"Foreign shoppers want transparency, and U.S. merchants are not being as transparent as these shoppers would like," O'Malley said. "They don't have that clarity when shopping on U.S. merchant sites."