Chris Hutchins's avatar

Chris Hutchins

April 28, 2016

U.S. Consumers Get a Big Break with EU Duties, Taxes

It’s good news for American shopaholics—but it’s a powerful, and profitable, opportunity for European e-retailers.

Chris Hutchins's avatar

Chris Hutchins

April 28, 2016

Last month, U.S. Customs and Border Protection made an announcement that pleased plenty of e-commerce-savvy Americans—and lots of European e-retailers, too.

Thanks to an amendment recently signed by President Barack Obama, the limit on daily duty-free purchases from European vendors has increased by 300%, from $200 to $800. This means U.S. consumers can buy far more from EU companies before paying pricey duties and import taxes.

This is great news for American shopaholics, but it's an even bigger win for European companies keen to connect with U.S. consumers. These retailers should notify their existing American customers about the policy change, to invigorate cross-border sales and spark higher average order values.

For American customers, the savings can be significant. According to Internet Retailer, a pair of men’s shoes priced at 230 euros ($259) would have originally incurred customs costs of nearly $50. Not anymore. Another perk? Parcels from the EU (with values under $800) won't be held up in customs until duties are paid, experts say.

This is an especially timely development for EU-based companies eyeing the U.S. market. There's no better time to launch localised English-language e-commerce sites to serve new U.S. customers.

We're certain to see an uptick in sales for the U.S.-market sites we operate and optimise for our major European retail clients such as ASOS, Dune and many others.

Based on our experience localising European e-retail sites for U.S. customers, American shoppers will be curious about new retail sites catering to their needs. But they may not always be willing to spend big, since they're unfamiliar with a European store's brand.

We've found an easy way to sidestep this skepticism and woo Yankee customers. By proactively presenting risk-mitigating messaging throughout an English-optimised site-such as highlighting robust return policies, speedy delivery times and other differentiators- Americans will quickly come to trust a "new" European brand.

We recently helped one EU-based fashion retailer overcome this very challenge. When we displayed credibility-boosting banners for American shoppers throughout the checkout funnel, conversions skyrocketed. In mere days, checkout rates surged by 27%, generating almost $200,000 of additional revenue.

We projected this kind of customised messaging could deliver $11.5 million of incremental revenue over the course of a year.

Even without such customizations, EU retailers can win big by tapping into the U.S. market. One week after UK retailer Dune's localised U.S. site debuted in 2015, sales to that market doubled.

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