While 93% of UK online shoppers prefer local sellers, as found in a survey by the Office for National Statistics, retailers look the other direction and hunt for customers overseas – in the USA.
The USA-based print-on-demand and dropshipping company Printful studied its UK sellers, and found that instead of targeting their own country (or Europe), they’re focusing on the US market.
The study that analyzed 697 online sellers based in the UK, found that as much as 64% of their orders come from customers in the US, which generates 55% of their total revenue.
In comparison, just 23% of all purchases and 28% of their revenue comes from local buyers.
As follows from the stats, British buyers are less stingy compared to Americans – they may be buying less, but they spend more. But with all that, UK merchants of all sizes are still looking towards the USA to drive sales and growth.
“[UK sellers focusing on the USA market] is something we have very much witnessed. We have two clients, large UK-based online retailers with over £2M in yearly revenue, and 50% of all their purchases come from the USA”
– Chris Thomas, the CEO of the ecommerce agency Digital Cake
The news comes hot on the heels of a study by Royal Mail, which found that one in seven (14%) American online shoppers have purchased from a UK site in the last three months. With global reach and the number one facilitator of ecommerce in the UK.
There are various reasons why UK merchants are looking towards the USA. First of all, the US market is significantly larger than the UK’s. While the local market isn’t small – in 2018, it’s forecasted to reach 100.6 billion dollars and become the third largest in the world – the USA is outperforming it by 4.6 times.
According to Statista, online sales in the USA will surpass $461 billion by the end of 2018. With over 215 million people already actively shopping online, the USA is one of the leading e-commerce markets, and thus a tempting target for overseas merchants, including UK sellers.
Because if the broad market, any niche in the USA is bigger and thus has a larger buying potential. It’s a very large and diverse market, and according to Chris, that makes it less prone to seasonality risks compared to the UK market.
“There’s always someone to sell to, and it’s always sunny in California”
– Chris Thomas, the CEO of the ecommerce agency Digital Cake
Secondly, despite the distance, US buyers are also more accessible than customers in other European countries. Americans speak the same language, and in the online retail business it makes a significant difference.
A survey of 3000 online shoppers from 10 countries found that people rarely buy from websites that are not in their language. 75% of the respondents surveyed admitted that they prefer to shop in their native language, while 59% of respondents said they don’t even consider ordering something from a website that’s only available in English.
For the UK sellers it’s therefore easier to target remote English-speaking markets than nearby European countries, as that would require their websites to be translated into several different languages. Due to the market size and consumer online shopping literacy, the USA has become the main target for UK retailers trying to grow their businesses beyond their borders.
What’s important is that foreign sellers today are actually able to conquer the US market thanks to the US-based dropshipping and warehousing services like Printful or Amazon FBA, which let them guarantee the same shopping experience as their local competitors. By using these services, orders to US customers are shipped from domestic fulfillment centers, that way ensuring fast and cheap (or free) shipping – something that the demanding US shoppers expect.
The grass is always greener on the other side of the fence. In modern-day e-commerce, the fantastic difference is that there are no fences anymore.
2 Responses
I’m surprised to hear nearly 2/3rd of orders for UK sellers come from US consumers. I’d be interested to read more about the Printful survey results. Do you have a link?
I don’t think this is very accurate in terms of overall market trends – Printful does offer specific products for specific businesses that may concentrate more in the US (many companies use it to order promotional stuff, sell products on Etsy US etc.).