2010 Cross-border Shopping Trends: Australia, Q5 and Customer Loyalty

American retailers looking overseas for new markets shifted their sights westward in 2010. Australia became the top destination for U.S. goods shipped outside of North America by FiftyOne merchant partners last year, more than doubling sales to the U.K.

Worldwide, Australia trailed only Canada, where familiarity with American brands, competitive delivery options, and a strong Canadian dollar powered U.S. merchants' biggest cross-border market. The growing strength of the Australian dollar—like Canada's, now trading above par with its American counterpart—may have played a key role in Australia’s recent emergence. Australian consumers accounted for 30% of overseas sales beyond North America.

The Swiss franc also gained buying power vs. the U.S. dollar, probably helping Switzerland claim the ninth spot just ahead of Sweden among the top ten overseas markets. Sales to France and Germany were only slightly greater than Switzerland’s, while the U.K. predictably remained the biggest European market for American merchants. Other top-ten countries included Hong Kong—whose sales nearly equaled the combined total from the other two Asian entries, Japan and Singapore—and Brazil, where sales jumped during the 2010 holiday season. Overall the top ten overseas markets represented roughly two-thirds of 2010 sales outside of North America.

The 79 countries representing the remaining one-third of overseas sales followed the same trend as the lower half of the top ten, with relatively similar contributions to the 2010 total, and few sharp drops from one to the next. After the most obvious cross-border opportunities, a ranking of the rest of the world produces a classic long tail.

The tail leads the beast when 2010 weekly sales are charted as an order curve. Spring sparked a slight rise in cross-border shopping during 2010, but the traditional fall upswing and holiday sales spike overshadowed other seasonal fluctuations. Just as Americans do, consumers around the globe boosted their spending dramatically in the “fifth quarter.”

Based on an aggregated view of retailers selling internationally through FiftyOne during the entire year, weekly sales climbed roughly 8% above first quarter levels in April, then dipped back down toward those levels through August. The fall increase during September and October dwarfed April’s rise. But weekly sales soared during the relatively short international holiday shopping season, nearly doubling the 2010 weekly average.

Global retailers may have an opportunity to extend their holiday shopping seasons by communicating with customers earlier and by using (and promoting) faster overseas shipping options that let international shoppers order later. But new customers acquired during the holiday season may represent a more important opportunity, because their potential contribution to sales over the next year is significant.

More than 40% of merchants’ 2010 sales came from 12-month multibuyers. This figure includes only shoppers that bought more than once during the calendar year; it also includes customers of merchants whose global ecommerce efforts launched late in the year. Even within these limitations, some merchants counted on repeat customers for more than half of their 2010 sales.

Not only did they buy more frequently, 12-month multibuyers generally bought more in 2010. Their average order values were significantly higher than one-time buyers' AOVs, making their influence even more pronounced. So converting first-time buyers from the 2010 holiday season into loyal customers during 2011 could pay off dramatically for cross-border retailers.

The charts below show: the ten top overseas markets' shares of 2010 sales; weekly sales volumes relative to the 2010 weekly average; and 12-month multibuyers' share of 2010 sales.

Methodology

Figures on top countries and multibuyers are based on accepted orders through FiftyOne Global Ecommerce by all active merchants during calendar 2010. Weekly sales figures for the 2010 order curve exclude merchants active for less than the full year.