Cross-border Power Shoppers: Where They Live, How They Buy

Some cross-border shoppers spend more than others. A lot more. They place bigger orders, they come back sooner, and they buy more frequently. These “power shoppers” represent American merchants’ best opportunity to grow revenues and build brands in new markets. But they aren’t evenly distributed around the world, and they don’t behave uniformly.

To identify concentrations and spending patterns among the most valuable cross-border consumers, FiftyOne compared power shoppers—the upper decile among our customer base, by total annual order volume—to the remaining 90%. Power shoppers accounted for more than 40% of 2010 sales, and in many countries and even entire regions, this elite group represents more than half of total sales.

Canada and Europe: Sheer numbers

As the U.S. dollar’s continued weakness attracts droves of Canadian and European consumers to American ecommerce sites, their numbers include thousands of power shoppers. As a result more than a third of the world’s power shoppers come from Canada, and more than a quarter from Europe.

While big spenders might be expected to gravitate toward favorable exchange rates, a common language is probably an important factor: Two-thirds of global power shoppers live in predominantly English-speaking countries. But countries with high concentrations of power shoppers aren’t necessarily English-speaking. Consumers from Germany and Eastern Europe are significantly more likely to be cross-border power shoppers than Canadian, British, or Irish consumers.

Pacific Rim: Power Regions

The combined populations of Australia and New Zealand amount to only one-third of the U.K.'s and Ireland's, according to the 2010 CIA Factbook. But New Zealander and Australian power shoppers outnumber their British and Irish counterparts by nearly three-to-one.

Asia has an even higher regional concentration of power shoppers. Although American merchants selling across the Pacific in 2010 reached only one-sixth of the global cross-border shopping population, they reached nearly one-third of the world’s power shoppers. This means that the concentration of power shoppers in Australia/New Zealand and Asia roughly doubles the worldwide average.

Compared to other regions, the Middle East represents a small population of cross-border consumers, but it offers the highest concentration of power shoppers in the world. More than one-third of Middle Eastern shoppers outspent 90% of their global counterparts, partly because they placed big orders. Middle Eastern power shoppers’ average order values (AOVs) exceeded $600 USD in 2010 – more than three times the global average. Even the Middle East’s “non-power shoppers” generated some to world’s highest AOVs: Nearly $300—50% higher than the global average and approaching the AOVs of Canadian power shoppers.

Total Value: The Equalizer

Canadian power shoppers more than compensated for their relatively low AOVs by ordering far more frequently than other power shoppers. This isn’t surprising. Compared to overseas consumers, Canadians have faster and cheaper shipping options from the U.S., lowering traditional hurdles to international shopping. As a result the value of Canadians’ total orders over 12 months actually exceeds the worldwide average.

This view of customers’ 12-month total value shows relative balance worldwide. On average cross-border power shoppers spent slightly more than $1400 in 2010. Power shoppers from Asia spend roughly $100 more than the average, while those from Australia and New Zealand spent roughly $100 less. Even Middle Eastern shoppers’ total values—roughly $1600—weren’t nearly as far from the global norm as their AOVs.

Loyalty: The Multiplier

Wherever merchants acquired these top-decile cross-border shoppers, their value compared to the remaining 90% worldwide was striking—they typically spent six-to-seven times more over the year. One of the key factors leading to this disparity was power shoppers’ tendency to place 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 treating their first orders as tests of merchants’ cross-border ecommerce offerings. If these shoppers are especially inclined to test American 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, too.