Lack of Local Currency Pricing Said to Suppress Global E-Commerce Sales
A recent survey of global online shoppers reports that e-commerce merchants selling abroad are missing out on sales and revenue opportunities because their websites lack local currency pricing capability.
February 15, 2013
The survey, conducted by Penton Research in November 2012 and commissioned by E4X, a global payments solution provider, shows that international e-commerce continues to expand globally, but many online merchants are not keeping pace with local shopper preferences in their pricing strategies.
The survey polled 30,000 online shoppers in Canada, the UK, Australia and Germany about their online shopping habits. The majority indicated displeasure with sites that priced in U.S. dollars only. As a result, online merchants are likely losing a considerable amount of revenue by pricing in only one currency.
Of all shoppers polled, a third showed their aversion for USD-only pricing by either abandoning carts, purchasing less, leaving the site to check conversion rates or never returning to the website.
Correspondingly, the survey indicates that pricing in local currency, or providing currency conversion capability, could boost e-commerce sales globally. Many respondents said they would look more favorably on an e-commerce website that displayed goods in local prices or provided currency conversion capability on the site.
“It is natural for e-commerce merchants to concentrate on domestic markets and USD pricing initially, not fully appreciating the role that local pricing will play in their sales success internationally,” said Gary McDonald, president of E4X. “Global consumers strongly prefer to shop and purchase in their own currency and as a result, USD-only websites are likely leaving money on the table by ignoring global shopper preferences. Additionally, many ecommerce merchants don’t realize that they can price in foreign currencies and still settle in an expected, guaranteed amount of USD.”
An average of 92.2 percent of survey respondents said they would prefer to shop and make purchases on websites that price products in their local currency. An average of 33 percent said they were likely to abandon a purchase if they discovered that the pricing is in USD only.
These two responses, along with other relevant pieces of data, are analyzed in E4X’s newly released whitepaper: Local Currency Pricing for eCommerce – Increasing Online Sales by Implementing a Global Pricing Strategy. The whitepaper details all the relevant results and conclusions from this survey and outlines the attitudes and behaviors of online shoppers in United Kingdom, Australia, Canada and Germany.