Online make-or-break factors are the same for big and small retailers

In one of our most recent Nordea On Your Mind reports "E-commerce: The show must go on", I talked to Damon Amoui, Head of Business & Merchant Offering at Nordea Transaction Banking. He shared his thoughts about how changing customer behaviours are driving the migration of sales online, what retailers need to consider when establishing and developing their online platforms, and how Nordea helps merchants with payment solutions for online and offline platforms.  

As the Head of Business & Merchant Offering at Nordea, could you provide us with an overview of what it is you and your team do? 

Damon: My team and I work with the commercialisation, strategy and business development of e-Commerce at Nordea and subsequently our payment service provider Nordea Connect. Being the biggest bank in the Nordics, we are seeing a large portion of our customers, in a range of industries, exploring e-commerce and online payments as a way of growing, changing or evolving their business. We often see that our customers have Nordic ambitions – so we work intensely in supporting those ambitions, which ties well to Nordea’s ethos of being the gateway to the Nordics. Together with our customers, we take on an advisory role and help them identify, plan and realise their e-commerce and digital strategies.

Nordea Connect, which is our payment service provider, and the core of our e-commerce offering consolidates the most relevant Nordic payment methods under one roof. It is also a highly prioritised initiative from Nordea where we are utilising our market position, vast payment experience, relations and partnerships in creating a service that ties together our traditional banking services with our new digital payment services. We are continuously looking at how we can best add value to our merchants and their end consumers – and create new products and services that are both relevant and useful.

Before joining Nordea, you spent a number of years as a “digital strategy consultant”. Could you tell us about your background within e-commerce and digital transformation, and share some reflections about what factors make a company successful in their online business?

Damon: I have been afforded the opportunity of working with both leading brands and startups – ranging from very large companies to smaller high-growth e-commerce startups. My work has ranged from working with designing and implementing large strategic initiatives – to making small improvements in existing highly established digital channels to increase sales and conversions. My experience has taught me one key thing – the factors that make or break you in an online business are largely the same for a small or large company.

Today, every type of business is looking towards digitalising their services and adding more online payment touchpoints – partly driven by consumer preferences – but also to increase profitability, add intelligence to purchase and payment processes and to enable up-sell and cross-selling. We are also seeing that essentially everything is comparable and accessible today, and changing between companies has become easier than ever. All great things – but it poses some challenges for companies that have relied on and existed in another reality. 

Customers are used to instant gratification today – where things should just work, and ideally on their terms. Best practice has been built by key players like Amazon and Apple, and users have adopted and gotten used to the convenience, efficiency and simplicity that they have been able to provide.

There are a couple of common denominators that make or break you online – irrespective if you are B2B or B2C, or if you are selling products, services or something in between:  

? Offering relevant and secure payment methods – one of the key reasons for dropping out of a purchase is lack of safety or due to not having the customers’ preferred payment method as an option.

? Encouraging social proof – customers trust other customers, which is why sales driven from review sites are growing rapidly. 

? Building relationships and personalisation – the online space is cluttered and congested with information. Users are increasingly starting to expect relevance in interactions – and the companies that can provide this will do better than others. Building long-term relationships and striving for loyalty with end consumers is increasingly important, considering global players like Amazon are expected to enter the Nordics.

? Listen to your audience and do your best to understand them. There is no one-size-fits-all in the online space – by knowing who you’re selling to, you can design your service to better meet their needs and wishes.

And of course, it is important to keep a close eye on market developments. The e-commerce space is rapidly changing with new innovations constantly hitting the market. Being able to adapt to developments rapidly is incredibly important. But ultimately, it always boils down to great customer experience – where you are relevant to the customer at the right time and where you in some shape or form add value.    

We have seen impressive growth in e-commerce in recent years, making online platforms an increasingly important channel for companies. What challenges do you see companies facing today in this area, and how should they tackle this development going forward?

Damon: As more and more companies are putting their focus on their online business, they are also becoming one among many in trying to reach customers. Let us take an example- if you would open up your mailbox, you would likely have hundreds, if not thousands of different marketing messages encouraging you to come buy something. In effect, this means that consumers are also becoming desensitised to traditional advertisements, in effect requiring companies to come up with new and innovative ways of reaching the consumer. An example of how companies have solved this is to sell products through invoices – a channel that has an incredible open rate compared to traditional emails. Or through influencer marketing. The key component here is to be relevant to the user at the right moment – which starts with you understanding who the customer is.  

My experience in working with companies that are not your traditional retail businesses is that they are actively looking at how to evolve their business and subsequently find new revenue streams. To be able to successfully pull this off, you would need an active relationship with the end consumer. Creating this active relationship when your relationship has historically been passive to the most part can pose a great challenge. A great example of this is the energy company that today provides electricity to your home, but in the future would also be providing electric car charging stations. By having your payment preferences digitally stored with the energy company, the payment and onboarding journey would be significantly simplified when you would move between different products from the same company – so that the next time you would charge your car, you just “tap and go”, and the payment is seamlessly charged the way you want it to. 

For a traditional “offline” retailer, what are some key aspects to consider with regards to consumer trends we are seeing in the online retail space? Does the process of setting up an online business platform differ depending on what type of business you are? Is there a difference in what infrastructure is needed, for example, regarding payment solutions?

Damon: The great part about the online landscape is that there are solutions for every kind of company – ranging from the one-man company to larger enterprises. For a smaller company, you can quickly get started with the software as a service e-commerce platforms where you can get basically everything you need to run your business for a small monthly fee, or if you’re tech-savvy and willing to do some grunt work yourself, you can turn to open source software like WooCommerce, which is free. For the larger enterprises, there are standardised services that can be purchased, or software that can be customised and integrated as part of larger systems. The options are endless and range from simple to highly complex software solutions.

At Nordea, we have put a lot of effort into creating the best Nordic payment service provider. The payment landscape itself is quite complex and is rapidly changing, both from a legislative perspective, but also from a user preference perspective. Nordea, being both a bank and payment service provider truly has a front-row seat as to how the Nordic payment landscape is evolving and we develop Nordea Connect through those insights. The payment, whilst perhaps not the first thing you think of when starting your own online business, is crucial for both the business and the consumer. For the business – it is crucial to get paid in a cost-efficient way, with as little delay as possible, while still providing a great customer experience to the end consumer. For the consumer, they want to pay through the payment method of their choice, and they want the payment to be fast, secure and simple – while still remaining in control. 

Nordea’s focus has been and remains on providing a service which has its biggest focus on the Nordics – where we are successfully combining global payment methods like card payments and PayPal with Nordic-specific payment methods like mobile payment methods such as Swish, Siirto, Vipps and MobilePay, as well as other local payment methods to provide our merchants with a comprehensive payment suite. 

How does Nordea assist businesses in their e-commerce endeavour? 

Damon: One of Nordea’s key business objectives is to help customers on their digitalisation journeys – and e-commerce is a key part of that. We have been supporting our corporate customers on their business journeys for many years, and have now evolved our offering to a range of different e-commerce services to meet their online needs. 

We’ve built Nordea Connect – our payment service provider – where we are working with small and very large companies in supporting their online ambitions. As part of our e-commerce services, we are also packaging Nordea’s comprehensive payment expertise and provide expert opinions on how the payment and e-commerce landscape is changing so our merchants can adapt their business.

Whilst we work with a range of online companies, we are also supporting a range of companies that are looking to move more of their services online – where we help our customers in identifying and realising their online ambitions, through an ecosystem and partnership way of working. 

Beyond the payment service provider – where we help merchants accept payments in a smooth manner in one simple integration, we are also working on a set of value-added services. For instance, we are exploring new products and services that use data intelligence to help you make smarter business decisions, process and efficiency improvements services and also looking at further bridging our traditional cash management services with our digital e-commerce solutions to make the end-to-end journey work in the best way for our customer.