Cross-border e-commerce and m-commerce is about more than price

From Poland to the United States, from Norway to Spain, everybody likes a good deal. We shop around, both locally and internationally, to find a bargain. With a world of choice in the palm of our hands, we can always find someone, somewhere, who is cheaper. But at what cost? We might save money on a product but will pay for it in other ways. Are we prepared to wait four weeks for something we could have tomorrow? Whoever we buy from, they must tick much more than the price box. Consumers are more empowered than ever, and retailers need to know their drives and expectations. Only then can you provide what they are looking for.

Consumers expect 360° brand experiences nowadays. Although price might be the first variable they use to determine who or what they are interested in, an increasing number of additional parameters is influencing purchasing decisions.

We can see that from aggregators and comparison engines, where variables such as availability, delivery times, shipping options and even payment methods are coming into play. Even if you don’t win on every aspect, you still need to tick as many boxes as possible: for that, you need to know what’s happening in your industry, in your market and in your demographics.

Consumer expectations vary greatly for both physical goods and digital services. You need to consider local legacies – how each market has evolved over time – and for that, you go back to before digitalisation. Germany and the Nordic countries have a tradition of mail-order dating back decades. That legacy has shaped consumer expectations on fulfilment – delivery, customer service, returns policy – and payment methods. In Germany, for example, free returns are no longer required by law but more-or-less next-day delivery and the ability to pay by invoice after delivery are still the norm.

Insights like these are just as useful for digital services as for physical goods: streaming services like Spotify and Netflix would be well advised to provide their customers with recurring invoices in such countries. 

In the Netherlands, on the other hand, open invoice is just catching on among consumers. With no mail-order culture to speak of, this is for one clear-cut reason: convenience. Consumers can buy now and pay later – simple as that.

In payments, as with any other variable, removing friction is essential. The developments we are seeing now – in tokenisation, recurring billing, seamless payments and so on – are all about making the consumer journey as smooth as possible and providing a better buying experience.

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Mobile payments pave way to cashless societies

Some countries are further down the road towards becoming a truly cashless society than others. Sweden and Denmark are leading the race, with both countries well ahead of the official 2030 deadline set by Denmark. That is fuelling a thriving fintech scene, particularly in Sweden where mobile payment services have all but swiped out cash.

The “cashlessness” of a society is a clear indicator of how you will interact with your customers: Sweden shares its mail-order heritage with Germany but the payments landscape is markedly different. Much of this difference can be attributed to levels of digitalisation and how transparent consumers are with their personal financial information. 

Swedes accept that their data is freely available and that makes them more open to innovation and new services. Germans don’t trust Big Brother in the same way and are more used to having cash in hand. Swedes don’t like cash; they use frictionless mobile transfer apps such as Swish.

This seamlessness makes payments simple and convenient, which consumers appreciate regardless of the market. Yet, they still expect control. They want the ability to get an overview of their payments so they know what they are paying. They still want security. They don’t want smooth, simple payments to become too easy and uncontrollable. Like much in life, the secret here is in finding the right balance.

PSD2 will shake up card payments

The introduction of the EU’s second Payment Services Directive (PSD2) is set to shake up the predominance of card payments in many markets. Stronger authentication could make recurring card payments much less convenient than before.

Cards are being recycled and replaced much more frequently today, largely due to the risk of exposure and data breaches. This affects subscriptions, too: a consumer might be sent a new card, not because the old one has expired but because the card provider thinks they might be at risk. Those who have a card on file for Netflix subscription payments don’t want to authenticate themselves every time they renew. The question of balance arises here, too. When does the extra security become an annoyance?

New technologies are also placing demands on the way your consumers need to make payments. How, for example, will consumers pay for downloads in their cars when the Internet of Things is part of their daily lives? There will be no card readers; only sensor technology. The same applies to micropayments in general with cards an unlikely solution. As alternative payment methods become more convenient, pay-after-delivery will become more relevant to your customers.

Payments will continue to grease the wheel of the 360° brand perspective and drive a better all-round consumer experience, facilitating and providing more convenient touch points for you to interact with your customers. 

Our country guides reveal what consumers are buying, how they are paying, and what they expect. They will help you see where your customers – and future customers – are heading.

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