Global e-commerce sales topped $1 trillion for the first time in 2012 and they are expected to grow another 19 percent this year, according to data from research firm eMarketer.com. While North America leads the world in online sales, Asia is expected to take the mantle by the end of this year. China drives Asia’s growth and this year it should surpass Japan as the world’s second largest e-commerce behind the United States and its $385 billion in online sales.
This global boom in e-commerce has helped to fuel growth in the package delivery market, prompting the shipping giants, including the U.S. Postal Service, to jostle for shares of this market. The global e-commerce surge has also benefited American companies, who are looking to foreign customers to expand sales and revenues. Surprisingly, a number of well-known retailers only began offering international shipping from their websites a few years ago, including Macy’s, Williams Sonoma, J. Crew, and Crate and Barrel. One reason for the late entry is that shipping beyond the United States is not so simple. As a New York Times article noted last year, the problems include customs, addressing, and postal and shipping fees. In some cases, the cost to ship the package could double the total cost of the order.
Another hurdle is package returns. Even as retailers figure out how best to reach their overseas customers, they are discovering that customers find it difficult to return packages. The Postal Service recognized an opportunity to simplify that process for online retailers and later this month it will begin a market test of a new international e-commerce return service. International Merchandise Return Service will allow foreign consumers to return unwanted products purchased from American retailers’ websites back to the U.S. The service creates return labels with postage payment, allowing the buyer to print off a label and return the item through the post.
Modeled after its domestic returns service, the Postal Service expects International Merchandise Return Service to simplify international returns for customers and improve their overall experience, which should encourage even more online shopping. The Postal Service will test the service for 2 years on online sales to Canada and Australia, negotiating prices and agreements with American companies that participate.
What other ways could the Postal Service improve the international shipping experience for retailers and their customers? How else could the Postal Service tap into the global e-commerce market? Do any of its domestic services provide good templates or lend themselves to adoption for the international market?