Variety of Regulations, Laws Challenge Cross-Border Sales by European Retailers

Most European retailers consider expanded European cross-border e-commerce a medium or high priority for growth. However, many are struggling to navigate diverse local laws, regulations and practices.

A new study conducted by Accenture found that retailers wanting to grow cross-border online sales across Europe are challenged on several different fronts, including:

The diversity of product returns laws (cited by 47 percent)

Difficulties in efficiently handling product returns cross-border ( 44 percent)

The cost of compliance with different national laws regulating consumer transactions, such as distance selling, or data transfer requirements (42 percent)

The differences in labor laws as being a key challenge (42 percent)

The cost of compliance with different national fiscal regulations (42 percent)

Differences in packaging and labeling laws (38 percent)

Differing VAT levels between markets (34 percent)

As Accenture describes in its press release, the differences between packaging and labeling laws can be particularly problematic. Retailers that have one common inventory for both their store and internet operations are required to put the same label on all inventory and in multiple languages, regardless of the goods' specific destination. What's more, while many European markets simply require retailers to report how much packaging they use annually, some may require detailed packaging information at the individual product level.

Still, the increasing willingness of European consumers to use digital channels as part of their shopping experience is driving retailers to focus on delivering both efficient online, cross-border operations and revenue growth in this area.

These are reasonable aspirations. A report by the European Commission in 2011 showed that 40 percent of shoppers in the European Union use the Internet to buy goods and services. Plus, according to the Accenture survey, more than three quarters (76 percent) of the retailers surveyed report that multichannel customers spend more than their single-channel customer counterparts, and one third (32 percent) said that multichannel customers spend at least 26 percent more than single-channel customers.

"Europe's consumers are becoming increasingly digital; they are empowered by smartphones and social networks, and access to unprecedented levels of information," said Juan Manuel Rebollo, senior executive and lead for Accenture's Retail practice in Europe, Africa and Latin America. "We are seeing high-performing retailers investing in technology to streamline and manage the cross-border differences in Europe. This investment will be critical in successfully negotiating the operational, regulatory and legal hurdles ahead of them."

TAGS: Finance
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