Cross-border shopping: luxury grows fastest, but customer service must improve

By

Sandra Halliday

Published
Sep 17, 2021

The pandemic and Brexit issues may have dented cross-border shopping in recent periods, but the channel is bouncing back and luxury is fuelling that comeback, a new reports shows.

Luxury has been the fastest growing cross-border category over the past six months and demand is particularly high in four key markets, three of them in Asia.

It’s also interesting that as many as 43% of cross-border shoppers say they’re happy to forego the in-store luxury experience for online convenience.

That’s all according to the latest data from eShopWorld (ESW), the cross-border e-commerce specialist.

Its Global Voices: Pre-Peak Pulse 2021 survey spoke to almost 15,000 consumers in the UK, France, Germany, US, Canada, Mexico, South Africa, UAE, India, Russia, China, South Korea, Japan and Australia.

And it revealed that when it comes to cross-border purchasing, demand for luxury goods is strongest in four key markets: China (39%), UAE (33%), South Korea (28%), and India (21%). More than 70% of Millennials, GenX, and Baby Boomers in China and South Korea shop luxury online, compared to less than 45% of shoppers in the Americas and most of Europe.

That’s particularly important for the European and American brands targeting these emerging markets. While 43% are happy to go online, almost as many (42%) will make those purchases from brand websites outside their home country.

The study said that more than half of shoppers in Mexico (54%), China (61%), Russia (50%), and South Africa (57%) are “comfortable” buying luxury products online due to the lack of availability and variety of such goods locally.

That news comes after a year in which the luxury market has been forced to reprioritise digital strategies to offset the impact of the pandemic. Their new online focus means luxury e-sales are now predicted to increase to 30% in 2021, up from 22% in 2020 — a boost that’s being driven by Millennial and Gen Z shoppers.

Not that the days of the luxury store are numbered as 42% of luxury shoppers still prefer to shop in-store, where they can touch and try on products.

But consumers still expect a full-on luxury experience online and when buying luxury products through webstores, 77% of survey respondents said they expect exceptional personalised customer service, while 75% say brands and retailers could do more to improve the premium levels of customer service. As many as 69% are "more likely to buy luxury goods online” if the experience “mirrors the level of service received in-store”.

That’s perhaps a wake-up call for high-end brands and retailers, some of which still struggle with creating a luxury feel as far as delivery, returns, online imagery and other customer services are concerned.

Martim Avillez Oliveira, Chief Commercial Officer, EMEA and APAC at ESW, said: “The quality, craftsmanship and prestige of luxury products is in increasing demand from a growing digitally native middle class, living outside the traditional luxury markets, who are both brand and status hungry. Therefore, to capitalise, luxury brands need to focus on recreating the high-touch, hyper-personalised experience customers receive in-store, in the DTC channel, and deploy those experiences across borders to meet demand at its point of origin.

“The luxury brands that continue to adapt and embrace omnichannel strategies that meld the expectations of the modern consumer with the traditional tenets of the luxury experience, from super-premium customer service, including tracked, personalised delivery, free returns, luxury packaging and premium courier services, to immersive online experiences, are the brands that will thrive as they bridge the perceived divide between online and in-store and win the loyalty of the next generation of luxury shoppers.”