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Financial Solutions
30 Sep 2015

Pay your own way!

arvato Finland’s E-commerce Manager Jouko Tossavainen shares his views on the impact a proper payment strategy can have on cross-border and omni-channel expansion.

The internet has changed the way we all buy products and services, both online and offline.

You might now visit a shop, discover an item of interest, and then go online to evaluate all the options around that product. Another trend is to surf the internet for products, then visit a physical store to see the item before going back online to order it.

Traditionally, physical stores and web shops have had separate payment possibilities, especially when you consider the inability to pay by invoice in a physical store, for example. I believe this is set to change, as customer-centric companies’ seek to offer maximum flexibility and convenience.

This omni-channel approach to transactions will see more merchants offer payment options at every touch point with the consumer. One example of this is Verifone – the leading card terminal supplier in Finland – and arvato, together enabling physical stores to offer payment by invoice and even instalments.

Another trend impacting the Nordic region is the proliferation of cross-border transactions. We have relatively small national markets that are served by local, niche suppliers and global e-commerce players. This means that any e-commerce operation aiming for major growth must be prepared for cross-border transactions.

Any merchant looking to expand and compete in e-commerce must have the ability to adapt their processes to keep pace with the changing expectations of consumers who demand transparency and absolute convenience from the online experience. What may have been a satisfactory user experience two years ago may well not be enough today.

Today, the logistics, credit card, payment methods, marketing and automated notification systems must work together to deliver the optimal user experience. On top of that, if the merchant wants to explore other markets, they will need to know the differences between their home country and the new target country. Even within the Nordic region, there can be major differences in behaviour and expectations. (We examine these differences in detail in our new arvato Insights report, Expanding E-commerce.)

Traditional retailers often complain that they are losing out to e-commerce as a result of this. But the figures show that the total volume of online sales is still only marginal compared with physical retail stores. (Online retail in Finland was only €3.4 billion in 2013, of total online trade of €10.5 billion. And online trade was in turn only a fraction of the €123 billion in total commerce – https://www.tns-gallup.fi/sites/default/files/Verkkokauppatilasto_2013.pdf)

But there is no doubt that e-commerce is influencing the way we shop, and the leaders in retail are taking advantage of that. Having already developed seamless processes that combine logistics and payment capabilities, mature e-commerce operators are now combining these capabilities with traditional “brick and mortar” stores. Last week I visited a hardware store to buy some screed, a sort of cement. They did not have it in the store but advised me to order it online in their web shop. I got a text message two days later to say the product had arrived.

So, with e-commerce changing customer behaviours, cross-border sales increasing and e-commerce growing at a CAGR of 10% over the next five years*, companies need to have a plan to make the most of the changing marketplace.

These sorts of strategies will be in the spotlight at the Finnish Commerce Federation’s Breaking Boundaries http://www.kauppa2016.fi/ event on October 6. My colleagues and I will be there, looking for the latest trends and seeing what it happening in the industry. Hope to see you there!

*Forrester Research eCommerce Forecast

– Jouko Tossavainen

Jouko Tossavainen







Visit: finance.arvato.com

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