Thought Leadership - Nexway
E-commerce and payments leader Nexway sees geographic expansion driving the future of online sales as digital solutions bring down barriers.
The year 2020 has brought radical changes to lifestyle and work habits that nobody could have predicted, and one thing we can say for certain is the demand for e-commerce has never been greater.
Previously held beliefs about the limits of online shopping versus the in-store experience are fading as customers of various generations in search of different product types suddenly get more comfortable with the idea of digital shopping. In response, companies are reconsidering opportunities to expand their global reach to new foreign markets in places where the return on investment in the past seemed too low.
E-commerce is growing, and with it comes an increasing demand for third-party Merchant of Record services. A Merchant of Record (MoR) can be an entity that operates a webstore or platform to manage interactions with its customers, sellers (sub-merchants) or suppliers. MoRs provide due diligence and oversight over all commercial activity that happens on that platform, including managing transactions and refunds, maintaining a direct relationship with payment service providers and providing billing-related customer support.
As a result, companies now have the unique opportunity to expand into markets which have previously been too expensive, unknown, or complicated. Incremental expansion to high-potential markets like Brazil and China, when done right, can contribute significantly to the bottom line.
Today’s Market Realities
In the context of the unprecedented health and economic crises caused by the COVID-19 global pandemic in 2020, Nexway wanted to better understand the impact the crisis is having on e-commerce and payment priorities for the rest of 2020 and beyond. We surveyed our customers, prospects and partners to conduct a health check of today’s market.
What we learned is that e-commerce decision-makers have had wildly different experiences, good, bad and indifferent. But regardless of the impact, they are rethinking their sales model and future-proofing against a second wave, or worse.
A digital dominant model is now of primary importance, whether that means finally putting one in place, or improving on what you already have. Moreover, a digital dominant strategy can be focused on customer interaction and experience and fully leverage existing stores and infrastructure. Examples include Best Buy seeing 41% of their online sales being store driven and Target realizing 90% ecommerce growth during Q2 of 2020 being interconnected with their stores. These two examples demonstrate the benefits of successful ecommerce programs to the broader company infrastructure.
Our proprietary research also revealed that the top priorities for e-commerce and payment deciders for the months ahead are: Payment Management, Customer Experience and Customer Care - Indicating that the customer is very much front and centre when considering how to improve your business. Furthermore, companies are hungry for continually improving their technology solutions to help improve these human interactions, and are relying on digital solutions more and more to drive them.
Using Technology to Get Closer to Your Customer
When it comes to geographic expansion, a combination of technology and human touch come together to provide a virtual presence. Companies need a partner who knows the ins and outs of the local payment providers, tax regulations.
Nexway’s research found that businesses are grappling with many issues related to how they sell and distribute products to customers. In many instances, technology plays a crucial role in helping them tackle these challenges and prepare for whatever the future may hold.
Distance Experience That Feels Local
A local approach to customer care ensures that the payment service is just like going to the local store, in your language, making the online, at a distance experience feel local. Applying that local approach through the customer journey, including; communications, look & feel, email language, and friendlier feeling license contracts, can all help create the same online experience as customers have in store - even if it’s on the other side of the planet.
Don’t Do It Alone
The right payment partner can help a business take a small footprint and make it bigger by helping secure a foothold for strategic expansion in targeted geographies. A payment partner with a local presence in a new market can help businesses start selling locally even when they are not physically present yet.
For companies getting started, we recommend these tips for planning your approach.
Get clear on your top priorities and focus on the most strategically beneficial markets. Start with just one or two. It’s OK to start small, adjust and learn, and build from there
- but a strong return must be a viable option or it’s not worth pursuing.
Assess payment providers and find a partner who truly knows your desired market, has expertise in their particularities in payment options, understands tax regulations, consumer behaviour, and language requirements.
Consider customer service at the outset, not just post-sales support, but as a key lever in your customer acquisition. Global expansion not only means getting your goods across borders but connecting with individual consumers in a different cultural context. Your online shopping experience needs to connect with their unique expectations.
For a deeper dive into Nexway’s localized customer care, read the latest article on Nexway’s blog here.
Nexway is a software and service company for e-commerce and payment. We expand the sales potential of software, retail, and services companies across 140 countries. Our customers rely on Nexway to power their subscription models, manage local payment methods, prevent fraud, engage resellers, deliver key customer insights, and beyond.
About Casey Potenzone:
Chief Strategy Officer, Nexway
Casey Potenzone joined Nexway in 2014 and currently serves as Chief Strategy Officer and a member of the company’s executive team. A seasoned technologist with a history of developing new applications and business models around innovative technology, he has been awarded multiple patents. Prior to joining Nexway, Casey previously worked for Arvato, Uniloc, Avangate and MTV.