NORDIC E-COMMERCE NORDIC DIBS S ANNUAL REPORT ON E-COMMERCE, MOBILE COMMERCE AND PAYMENTS

Transcription

1 NORDIC E-COMMERCE NORDIC DIBS S ANNUAL REPORT ON E-COMMERCE, MOBILE COMMERCE AND PAYMENTS DIBS S ANNUAL REPORT ON E-COMMERCE, MOBILE COMMERCE AND PAYMENTS

2 NORDIC E-COMMERCE 2015

3 NORDIC E-COMMERCE CONTENTS 01 Intro SWEDEN 02 Swedish E-commerce 03 Online payments in Sweden DENMARK 04 Danish E-commerce 05 Online payments in Denmark NORWAY 06 Norwegian E-commerce 07 Online payments in Norway 08 Nordic survey Glossary

4 01INTRO E-COMMERCE CONTINUES TO REVOLUTIONISE OUR DAILY LIVES E-commerce is revolutionising one industry after another. It can be a threat or an opportunity depending on how you approach and handle that change. In order to adapt accordingly you have to understand today s major trends. The purpose of this report is to identify and describe these major trends within e-commerce. Technology is developing at an incredible speed. When it is fertilised with creativity, new products and services will emerge generating new demands. This is exactly what Apple managed to channel by opening up App Store to other developers; nobody had predicted the universe of apps that emerged when anyone with a good idea could make it accessible to more than half a billion iphone users. Today many established industries are being challenged by newcomers. Tablets suddenly appeared and challenged the computer business and along came printed newspapers, magazines and books. Netflix has changed the way we watch TV try to explain prime time TV to a teenager. Online grocery shopping has changed the way many, particularly families with young children, are planning their meals and their purchases. The media industry s advertising model is challenged by global players like Facebook and Google. The taxi industry is challenged by Uber, which partly serves as a taxi dispatching centre and also connects individuals. Airbnb is similarly challenging the hotel industry by connecting individuals seeking to lease their property with individuals looking for rentals. Marketplaces are in the process of establishing themselves as an intermediary between customer and shop. The development is being led by Amazon, which currently accounts for a fourth of the e-commerce market in the U.S. In the Nordic region, new marketplaces have emerged, such as CDON Marketplace and the bargain warehouse Fyndiq in Sweden. In a sense e-commerce has made the competition conspicuously global. On the one hand Nordic businesses have access to customers all over the world, and on the other hand a Chinese or American player can turn up at any time and challenge them in their home market. In the retail business consumers now expect to be able to order online (preferably on a mobile optimised website), pick up the items at the post office and to change or return them in the shop. They expect the same service from a brand regardless of the channel (computer, mobile and physical store). In this respect there is an obvious gap between the consumers expectations and the shops service. Many companies have already come a long way. Intersport, Magasin and Kicks have all been rewarded for their multichannel retail solutions. At Kicks you can make an order online, then pick it up and, if needed, return the product in the physical store. The U.S. is far ahead of the Nordic countries in this area, and U.S. shops such as Macy s and Target are actively working on providing customers with a complete experience in the buying process, regardless of how the consumer moves between the different channels. In last year s report we established that the payment solutions in e-commerce was facing a major technological leap, when Swish, MobilePay, MasterPass and Apple Pay were in different ways making it easier to shop on mobile devices. Since last year the use of Swish by private individuals has had a huge breakthrough in Sweden. The next step is an e-commerce solution. In Denmark, MobilePay has gained an impressive 2.5 million users in a short period of time and the service has recently been launched in Norway. In the next year MasterPass will be launched, and Apple s mobile payment solution, Apple Pay, may be released in the Nordic countries as well. We know from experience that Apple can transform markets in unexpected ways. Consumption patterns are changing rapidly and there is much to learn by studying the development of Nordic e-commerce. Mobile e-commerce in the Nordic countries has increased by 100 percent in three years and one out of three Nordic consumers subscribe to a video streaming service. Understanding consumer demands such as flexible delivery conditions and a mobile optimized website is crucial. It all boils down to understanding and embracing the changes we are witnessing; the world is going to continue to change, with or without you. 4 NORDIC E-COMMERCE 2015

5 The world will continue to change, with or without you. Daniel Larsson Deputy CEO, DIBS 5

6 01 02SWEDISH E-COMMERCE E-COMMERCE IN SWEDEN 2015 We are increasing our online shopping; just like last year almost all of the growth is happening on mobile devices, and most consumers expect to shop at least as much or more in the future. E-commerce continues its strong growth in the Nordic region. The Swedish online market for products and services has increased from 70 billion to over 90 billion SEK in three years. In the past year alone, the market has risen by 12 percent. We are witnessing a huge change in which we all take part. The major trend in recent years is that an increasing share of e-commerce is happening on mobile devices such as smartphones and tablets. In three years the percentage of mobile purchases has nearly tripled in Sweden. Nearly half of the consumers (42 %) state that they have made an online purchase via smartphone or tablet in the last six months. In terms of online spending, travel is by far the most dominant category. According to consumers own estimates, 42 percent of their e-commerce budget is spent on travel. Consumers have been accustomed to purchasing travel and holidays online for a long time. The travel industry started their e-commerce venture early on, and has maintained a frontline position in the development. Purchasing travels online have many tangible benefits. One can do research, compare prices, and view videos of different hotels and travel destinations online. When the decision has been made, payment is easily done by card. Subscription to video streaming services is the subscription product category that is growing the fastest. More than a third of consumers currently pay for services such as HBO, Netflix or Viaplay, the most common being families with young children. The tendency to subscribe to newspapers, however, increases with age. There is a lot to learn from the data, both for those seeking to understand the times we live in and for the businesses that want to better meet the needs of their customers. For example, every third consumer cancel their purchase because they were unable to pay by the method they prefer. In the U.S. 85 percent of online shops have adapted their websites for mobile devices (Internet Retailer Top 500 Guide), while in Sweden only 58 percent have done so (E-barometern Annual Report 2014, PostNord). Because the market for many products is global, it is clear that any e-commerce business without a mobile optimised website that is attempting ambitious expansion might want to rethink their strategy. 6 NORDIC E-COMMERCE 2015

7 THE MOBILE BREAKTHROUGH % Have you purchased anything via your smartphone or tablet in the past six months? +90% % % 29% 20% % Norway 42% % % % % 16% Sweden 36% 32% 21% Denmark Mobile e-commerce had its serious breakthrough two years ago. Since then, it has continued upwards in all the Nordic markets. 4 of 10 online consumers have at some point used a mobile device to shop. This applies throughout the Nordic region. Mobile purchases in Sweden have developed a bit faster; increasing in three years by 163 percent. Mobile e-commerce is most popular amongst parents of young children. 68 percent of them have made a purchase with a smartphone or tablet during the last six months. There has also been a big breakthrough (61 percent) among young adults aged

8 01 02SWEDISH E-COMMERCE MARKET SIZE AND GROWTH Mdkr Uppskattning av den svenska e-handelsmarknadens storlek BN SEK Estimation of the Swedish e-commerce market size +12% +7% 90.5 BN SEK 70.5 BN SEK +7% 75.7 BN SEK 80.8 BN SEK The Swedish online market for physical goods and services has a turnover of 90.5 billion SEK. That is an increase of almost 10 billion SEK (12%) compared to last year. In three years e-commerce has increased by 28 percent. The figures are based on the actual increase of around online retailers in the Nordic countries. 8 NORDIC E-COMMERCE 2015

9 E-COMMERCE DISTRIBUTION IN SWEDEN % How is your online spending distributed? (Last 3 months) 51% Travel & Services 34% Goods 15% Other & Media 9% Other 6% Media % Services 42% Travel It is commonly perceived that e-commerce primarily concerns purchasing physical goods online, but the largest category is services. The physical goods category represents only a third of e-commerce. The services segment is solidly dominated by travel. Travel sales represent almost half of all our spending online (42 percent). The share of travel sales is even higher among those spending the most online. However, amongst those shopping the least (1-899 SEK in three months) media/ entertainment and clothing/footwear are the dominant categories. 9

10 01 02SWEDISH E-COMMERCE A CLOSER LOOK AT TRAVEL AND GOODS % How is your online spending distributed? (Last 3 months) A closer examination of the travel segment shows that more than 60 percent of all purchases within this category are flights and hotels. There are big differences between the various age groups. The youngest group, year olds, spend considerably less on flights and hotels, however much more on buses, trains and public transport. Compared to those aged 55-65, the youngest group spends three times more of their travel budget on public transport, over four times as much on buses and trains, but less than half as much on hotels. The physical goods segment is relatively evenly divided between four categories, each with an annual turnover of about seven billion SEK. There are large differences between the consumption of men and women. The share of men who spent more than 4,500 SEK on electronics in the past six months (12 percent) is three times higher than that of women. The share of major consumers of clothing and footwear is twice as high among women (6 percent) as men (3 percent), and the rate is even higher in the years age group. Other 8% Cars 5% Taxis 2% Flights 33% Health care 8% Electronics 25% Public transport 8% Travel Interior decorating 19% Goods Trains and buses 16% Hotels 28% Clothing and footwear 24% Home consumables 24% 10 NORDIC E-COMMERCE 2015

11 CUSTOMER CASE STUDY: FRITIDSRESOR / STAR TOUR STRONG MOBILE TREND AMONG TRAVEL CUSTOMERS Travel dominates Norwegian e-commerce. The industry s revenue derives almost entirely from customers looking for and booking trips online. Almost half of the online traffic is now coming from mobile devices. In 1997 Star Tour launched its first website, and in 2005 more than a third of their customers booked their trips online. Since then the share has increased steadily each year. Today, online bookings represents 80 percent of the revenue. What s the reason for your success in mobile e-commerce? What it all comes down to is how you manage to inspire and engage, and also communicate what you have to offer. This needs to be done through the channels most appealing to the customer. During 2014 we focused even more on our digital channels, not least on adapting to mobile devices. One example is the app called My holiday, which provides our customers with all the necessary and relevant information before and during their holiday. With this app our customers can ask questions to the guides whilst in their lounge chairs, and receive a response within an hour. Thus they will not need to walk to the hotel reception to see a guide about their questions. What proportion of your customers shop online? We have experienced a significant boost via mobile. Almost half of our traffic is from mobile devices and it is increasing fast. Mobile devices of today present an equally good user experience as computers. Mobile consumption is rising rapidly and increasingly more people are choosing their mobile devices for payments. We are experiencing the same shift in payment methods as with the computer in the early 2000s, but the difference now is that it is happening so much faster. Patrick Törn Ancillary & Partner Sales Manager Fritidsresor/Star Tour 11

12 01 02SWEDISH E-COMMERCE MOBILE E-COMMERCE CONTINUES TO RISE Mobile e-commerce continues to present strong growth. In three years the share of people who have made purchases on a mobile device has risen from 16 to 42 percent. In this past year, the mobile market in Sweden has increased by over 200,000 consumers. More than three million of the Swedish consumers have now made an online purchase via a mobile device. The number of mobile purchases increased from about 31 to 33 million, and trends look approximately the same in all Nordic countries. Mobile e-commerce will likely continue to grow. Furthermore, the increase is strong in almost all ages. New consumers begin to shop on their smartphone or tablet each year. The most common reason to make a purchase on a smartphone is that it is close at hand. The smartphone is always within reach, also when visiting a physical store. Our consumption patterns are in the process of getting mixed up; online is intertwined with offline. We do research online and then make our purchases in a physical store, or vice versa. Sometimes we are visiting a physical shop whilst ordering a product online. It is clear that amongst mobile consumers who spend the most money online, the largest share of it - almost half - goes to travel. However, consumers who have spent less than 900 SEK in the past three months are mainly purchasing songs, films, clothing and shoes. The reason why we prefer to shop online is not primarily due to lower prices or a greater selection, although these are also important factors. Most important is that it is easy, convenient and saves time. Online shopping has become a way to simplify dayto-day life. This includes both men and women - and in particular consumers who make purchases on mobile devices. 77 percent of mobile consumers say that they have shopped just as much or more on their mobile devices this year as compared to last year. The increase is expected to continue. 12 NORDIC E-COMMERCE 2015

13 Mobile shopping is growing % Have you purchased anything via your smartphone or tablet in the past six months? 16% 28% 40% 42% Nearly half of all Swedes have made a purchase using a mobile device in the last six months. Since 2012 the share has increased by 163 percent. The rate has slowed down in the past year, but it still added 206,000 mobile consumers to the market. Mobile e-commerce has had its largest breakthrough in the year age group and amongst families with young children, where respectively 61 and 68 percent made purchases on a smartphone or tablet. Older age groups have not adapted to the technology to the same extent. There is also a clear distinction between city and countryside, where consumers in metropolitan areas are more likely to shop on mobile devices compared to those living in rural areas. Consumers of all age groups are going mobile % Have you purchased anything via your smartphone or tablet in the past six months? Ages Consumption via mobile devices is increasing across all age groups except amongst year olds. 6 out of 10 aged have now shopped on a smartphone or tablet. The fastest growing group is the year olds, with an increase of 28 percent more mobile purchases this year as compared to last year. 13

14 01 02SWEDISH E-COMMERCE Proximity is king % Why did you shop on your smartphone? My smartphone was closest at hand at the time of purchase I used an app to shop I opened an offer via on my smartphone I was in a shop but purchased the product online instead 5% 20% 30% 65% I don t own a computer 4% Only internet connection 4% I scanned a QR-code 4% Two out of three say that they used their smartphone to make a purchase online because it was closest at hand at the time. This is an increase compared to last year. This is not exactly surprising now that almost everyone has a smartphone with direct access to a world of offers at all times. It is worth noting that the proportion of consumers who visited a physical store and still chose to order the product on their smartphone seems to have increased slightly since last year (from 3 to 5 percent). As we established last year, the division between physical stores and online shops is becoming ever more diffuse; sometimes we do research online and shop offline, other times we do the opposite. One out of five smartphone consumers has made a purchase on their smartphone after receiving an offer via . The tablet is an important gateway to the web % Why did you shop on your tablet? My tablet was closest at hand at the time of purchase 71% I opened an offer via on my tablet I used an app to shop 16% 19% I don t own a computer Only internet connection I was in a shop but purchased the product online instead I scanned a QR-code 5% 5% 4% 2% The majority of those who shop via tablets say they chose it because it was the closest at hand. At the same time we see that 5 percent of consumers use the tablet because they do not own a computer or any other internet connection. is an important sales channel for tablet consumers as well. 14 NORDIC E-COMMERCE 2015

15 APP OR BROWSER? IT DEPENDS ON THE SCREEN SIZE % Have you purchased anything via your smartphone or tablet in the past six months? 25% Tablet app 40% Tablet browser 41% Smartphone app 41% Smartphone browser Those making purchases on their tablet use the web browser more frequently. This is of course due to the screen size. It is better and easier to search, compare and look at products in the browser on a tablet than it is on the browser on a smartphone. Smartphone consumers are just as likely to shop with an app as in a browser. 15

16 01 02SWEDISH E-COMMERCE Travel and services also dominate sales on mobile devices % How is your online spending via smartphone and tablet distributed? (Last 3 months) 53% Travel & Services 35% Goods 12% Other & Media 7% Other 5% Media % Services 51% Travel We purchase a lot more travel and services than physical goods on mobile devices, too. In fact we buy an even larger share of travel on mobile, which is probably because public transport mobile solutions are improving. Total spending via mobile devices % How is your online spending via smartphone and tablet distributed? (Last 3 months) 6% Other 4% Taxis 2% Cars Flights 26% Health care 10% Clothing & footwear 34% Public transport 15% Trains or buses 22% Travel Hotels 26% Interior decorating 14% Home consumables 14% Goods Electronics 27% Travel and services also dominate on mobile devices. However, we are more likely to book train or bus tickets and purchase public transport tickets via mobile devices than via a computer. At the same time, it remains more common to book flights on a computer. The main difference between computer and mobile device consumers in the physical goods segment is that mobile consumers buy 50 percent more clothing and footwear. 16 NORDIC E-COMMERCE 2015

17 women GENDER DIFFERENCES men IN CONSUMPTION PATTERNS How is your online spending via smartphone and tablet distributed? (Last 3 months) women men 53% 49% TRAVEL 18% 6% CLOTHING & FOOTWEAR 5% 14% ELECTRONICS 4% 11% OTHER 4% 6% MEDIA 5% 5% HOME CONSUMABLES 5% 5% INTERIOR DECORATING 5% 2% HEALTH CARE 2% 3% SERVICES The category we spend the most on online is travel, by far. Consumers estimate that they spend 51% of their online purchases via smartphones and tablets on travel. There is a great difference between men and women. Women purchase more clothing and footwear over three times more than men. Men on the other hand spend almost three times as much on electronics as women. 17

18 01 02SWEDISH E-COMMERCE WHAT WE SPEND AND HOW WE SPEND IT % How is your online spending distributed? (Last 3 months) SEK SEK 4500 SEK or more Electronics Home consumables Interior decorating Travel Media Clothing & footwear Health care Services Other O Travel dominates the e-commerce market in terms of money. This is because travel consumption is strongly overrepresented in the customer group that spends the most money online. High-level consumers, those who spent at least 4,500 SEK in the last three months, spend almost half of their online budget on travel. Those who spent less than 900 SEK primarily consumed media and entertainment, i.e. rented movies, purchased songs and perhaps subscribed to a streaming service. High-level consumers spend only 5 percent of their e-commerce budget on media. 18 NORDIC E-COMMERCE 2015

19 BIG SPENDERS PURCHASE TRAVEL AND SERVICES % What products or services have you subscribed to online? Other and media 15% Travel and services 53% Goods 32% 4500 SEK OR MORE Other and media 38% Travel and services 11% Other and media 24% Travel and services 22% SEK SEK Goods 51% Goods 54% 19

20 01 02SWEDISH E-COMMERCE STRONG INCREASE IN ONLINE SUBSCRIPTION SERVICES Subscribing to products and services online is becoming increasingly widespread. The most common is subscribing to a video streaming service (e.g. Netflix or HBO). Every third person now pays for access to such services. Men are clearly overrepresented with 38 percent of all men subscribing to streamed video, compared to 29 percent of all women. TV/Video Streaming (Viaplay, Netflix and HBO) 33% 27% Music Streaming (Spotify or Wimp) 29% 27% % 45% 42% 44% 45% 38% 30% 23% 15% 22% 20% 6% Ages TV/Video Streaming Subscription to video services is the most common of all amongst families with young children and young adults without children. It is three times more common amongst families with young children than amongst pensioners. It is also more common amongst highincome earners than low-income groups. In contrast, there is hardly any variation between different parts of the country; the lowest rate is in rural areas (28 percent) and the highest rate is in Stockholm (38 percent) Ages Music Streaming Streaming music is even more clearly linked to age groups; the younger a person is, the more likely he or she is to subscribe to Spotify or Wimp. Consumption is at about the same level throughout the country, except in rural areas where only every fifth person subscribes to music, probably because the service does not work as well on mobile networks there. 20 NORDIC E-COMMERCE 2015

21 Magazines & Books Groceries 23% 21% 9% 6% % 13% 15% 27% 27% 21% 21% 7% 8% 13% 4% 3% Ages Ages Magazines & Books The share subscribing to newspapers, magazines and books online increases with age, from 13 percent amongst youths to 32 percent amongst pensioners in the age group This is the only subscription service where the elderly are overrepresented. An important reason is that they are presumably used to a regularly distributed newspaper delivery from a time when the media landscape was different. Everything indicates that the younger generation absorbs the news in other ways than before, as the media is changing. Groceries Subscription to food delivery is most common in the age group, when many have young children, two incomes and a hectic daily routine. 21 percent of families with young children purchase food online, compared to 7 percent of young consumers without children and 2 percent of pensioners. Food delivery is also much more common amongst higher income earners (17 percent) than amongst lower income groups (4 percent). Food delivery is four times more common in Stockholm (11 percent) than in rural areas (3 percent), which is to a large extent explained by the availability of such services. 21

22 01 02SWEDISH E-COMMERCE Why we shop online % What is the most important reason why you shop online? 80 67% 57% 58% % 43% 42% Simplifies Lower prices Easier to compare products Larger selection Always open Finding products not available elsewhere Exactly as before, the most important reasons for shopping online are that it is easy, convenient and it saves time. This category is rising sharply; this year the figure is 67% whereas two years ago it was 61%. At the same time the share of consumers who shop online because it is cheaper seems to be decreasing. In two years this share has fallen from 63 to 57 percent. Fewer are also motivated by the larger selection offered online. Both men and women want to save time % What is the most important reason why you shop online? % 66% 59% 55% 55% 61% 45% 41% women 58% 51% 42% 43% men Simplifies Lower prices Easier to Always open Larger selection Finding products compare products not available elsewhere There is very little difference between men and women s shopping motivation. Women are slightly more likely to appreciate the convenience and time-saving aspects of e-commerce, while men put more emphasis on other factors, such as price, selection and availability. The difference from last year is that both men and women prioritise saving time more and lower prices less. 22 NORDIC E-COMMERCE 2015

23 Older consumers are the least motivated to save money % What is the most important reason why you shop online? Ages Ages Simplifies Lower prices Easier to Always open Larger selection Finding products compare products not available elsewhere We can see that the older group is to a lesser degree driven by saving money, whilst younger people value variety and comparability of products more. The youngest are twice as likely to appreciate a larger product selection than the older generation. It is interesting to note that the variety of products is most important in smaller towns, whilst consumers in Stockholm and rural areas value it less. Generally, there are small variations across the country. Price and selection drive customers abroad % Why did you choose an online shop abroad for your purchase? The product or service is not available in Swedish online shops Lower prices than in Swedish online shops The product or service is not available in physical shops in Sweden Lower prices than in physical shops in Sweden 29% 35% 61% 61% Lower tax/vat 7% Other reason The product will be used in the country where purchased 4% 3% The main reasons for shopping in foreign online shops are that the prices are lower and the selection is wider. This year there are just as many who say they are driven by the lower price as the wider range. The main deviation is that the youngest, aged 15-24, more so than the others (47 percent), were drawn to foreign online shops because of the range of physical shops at home. 23

24 0201 SWEDISH E-COMMERCE NORDIC E-COMMERCE 2015

25 FOUR OUT OF TEN SHOP ABROAD Have you purchased anything from a foreign website in the last six months? 40% Yes Women 33% Yes Men 46% Yes 52% 45% 42% 39% 33% 22% Ages The proportion of consumers buying from foreign online shops is much higher among men than women. Almost half of all men have made a purchase from a foreign online shop over the past six months. The highest share is among high income earners (49 percent) and those aged (52 percent), and the trend clearly decreases with age. The lowest share is amongst the year olds, of which only 22 percent have made a purchase from abroad. 25

26 01 02 MOBILE PURCHASES INCREASE SWEDISH E-COMMERCE Have you purchased more via mobile devices in the last year? 77% Same as now or more 9% Less Everything indicates that consumption on mobile devices will continue to increase. 77 percent of the respondents claim to have shopped as much or more on mobile devices over the past year as compared to the year before. Only 9 percent said they have reduced their shopping. Mobile e-commerce is expected to increase further in the coming years. 26 NORDIC E-COMMERCE 2015

27 MAJOR DIFFERENCES women BETWEEN MEN men AND WOMEN S MOBILE SHOPPING In what areas have you increased your shopping via smartphone or tablet in the last 12 months? women men 23% 38% 35% 22% CLOTHING & FOOTWEAR 19% 28% TRAVEL MEDIA 23% 10% HEALTH CARE 5% 28% ELECTRONICS 16% 15% INTERIOR DECORATING 13% 15% OTHER 11% 11% HOME CONSUMABLES 7% 12% SERVICES There are great differences between men and women s purchases via mobile devices. The greatest difference is in electronics, about a third of the men have increased their purchases compared to just 5% of women. On the other hand, many more women than men increased their purchases of health products and clothing and shoes. It is also primarily men who have increased their purchases via smartphones and tablets in the largest category, travel. 27

28 01 02 SWEDISH E-COMMERCE NORDIC E-COMMERCE 2015

29 Difficult times for music CDs and printed newspapers % Will you purchase the following products in the coming 12 months? Music Books Newspapers & magazines Music (CD & vinyl) 50% No / will stop buying 11% Buy less 26% Equal or more Books 25% No / will stop buying 13% Buy less 51% Equal or more Newspapers & magazines 31% No / will stop buying 15% Buy less 42% Equal or more The CD is in the past. Half of all consumers have already stopped buying music on vinyl and CD, or plan to do so, and another 11 percent plan to cut back on their consumption. Almost no one plans to increase their purchases. Consumption of CD and vinyl on the internet is strongest in southern Sweden, and among year olds. The percentage of people who have completely stopped buying records is highest in the oldest age category. The paper book is more resilient. Half say that they continue to buy paper books to at least the same extent as before, and only a quarter have stopped or plan to do so. The proportion of people who have stopped buying printed books is higher among men than women, and highest in rural areas. The printed book is the strongest amongst families with children and year olds, while year olds have to a large extent never bought or stopped buying in the first place. The consumption of printed newspapers and magazines is placed somewhere in between. 42 percent say that they continue to purchase just as much as before. Young consumers are overrepresented amongst both those who say that they have started buying printed newspapers, and amongst those who say they are planning to increase their purchases. There are probably income differences at play; they expect that they will be able to afford to buy newspapers and magazines to a higher degree. We can also see that more low-income earners stopped or never started buying printed newspapers, magazines and books compared to the high-income earners. 29

30 ONLINE PAYMENTS IN SWEDEN NEW PAYMENT METHODS REVOLUTIONISE E-COMMERCE - AGAIN It remains unnecessarily difficult to pay by mobile phone. Now, new solutions are being introduced to make it easier. This is going to change our consumption patterns. In last year s report we noted that mobile e-commerce was facing a technological leap, as several major players were about to launch new payment solutions. This still holds true. Apple has released its new payment method Apple Pay, although not yet in the Nordic region. Swish are releasing their e-commerce solution, and the MasterCard solution MasterPass is being launched in Sweden and Norway. The Danish MobilePay already allows you to pay online with your phone. All these new payment solutions have one thing in common; they make it easier to pay. They reduce friction. You should not have to enter your card details into your phone each time you pay a parking ticket or order a book. The reason for using mobile phones to shop is that it is simple. The harder it is, the less likely you are to do it that way. 47 percent of e-commerce consumers want to be able to store their card details to avoid having to re-enter it upon each purchase. Amongst mobile consumers, the share is 55 percent. This is most important for the oldest consumers. One in three consumers even said they would shop more from mobile devices if they did not have to enter card details every time. We also found that 38 percent of consumers have at some point cancelled an online purchase, usually because they have not been able to use their preferred payment method. It is most likely a temporary problem. Shops that do not offer the right method of payment will see themselves eclipsed by their competitors, in much the same way that shops without mobile adapted websites will lose out. Practically everyone today has a smartphone within reach, a portal to all the world s shops. The journey from idea to completed purchase has never been shorter. The battle for mobile consuumers rides largely on meeting demands with the right range, a mobile optimised website and a convenient way to pay. The range is already there. More and more e-commerce operators have built simple, smart and fast mobile device sites. When several of the major payment operators are launching new, mobile adapted payment methods, technology is set for the next phase. 30 NORDIC E-COMMERCE 2015

31 CARD PAYMENTS REMAIN MOST COMMON % Which payment methods have you used in the last six months? Card % 54% 51% 14% Invoice Online bank payment PayPal, Payson etc. It remains the most common to pay online transactions by card. 84 percent of those who shopped online during the last year used their card, and about half paid by online bank payment or by invoice. Invoice payment is very common amongst women. It is worth noting that every eighth person has used a payment service such as PayPal or Payson. Amongst year olds the share is almost every fifth consumer. 31

32 We prefer to pay by card ONLINE PAYMENTS IN SWEDEN % Which online payment method do you prefer? 50 40% 41% 40 38% 30 23% 25% 24% 29% 23% 24% % 5% 7% 0 Card Online bank payment Invoice PayPal, Payson etc. Card payment is also the payment method most consumers prefer. The distribution between preferred payment methods has not changed much in recent years, but we see a slightly increasing trend for card payment, which is now preferred by 41 percent of consumers. The preference for services like PayPal and Payson decreases clearly with increasing age. Cards dominate mobile payments % Which payment methods have you used via smartphone or tablet in the last six months? % 71% 74% 40 26% 30% 24% 32% 34% 20 14% 8% 13% 12% 0 Card Online bank payment Invoice PayPal, Payson etc. Cards are the most common payment method even for mobile device transactions. In fact, almost as many paid by card payment in the past year as with the other payment methods put together. This was a clear finding, even when there were multiple options in the survey question. Women largely use online bank payment or invoice payment, while men use services like PayPal and Payson almost twice as much as women. 32 NORDIC E-COMMERCE 2015

33 Payment methods should be simple and safe % Why do you prefer the following payment option? Easiest Safest Cheapest Bonus points % 59% 49% 65% 52% 61% 40 28% 20 21% 20% 14% 15% 0 2% 1% 3% 6% 3% Card Online bank payment Invoice PayPal, Payson etc. Simplicity and safety are the most common motives for choosing one particular payment method over another. Card users prioritise simplicity above all else, while those using invoice or PayPal and similar services put security first. There are also elements of other motivational factors; one in five card users take bonus points into account, and both card payment and online bank payment users highlighted price as a factor, as these payment methods are not linked to a fee, unlike invoice payments. Women prefer invoice, men prefer card payment % Which online payment method do you prefer? women men 48% 33% 27% 30% 5% 21% 18% 8% Card Online bank payment Invoice PayPal, Payson etc. More prefer card payments than last year, amongst both women and men, but men still prefer card payments to a much greater extent than women. Women, on the other hand, prefer invoice almost twice as much as men. These differences persist year after year. 33

34 ONLINE PAYMENTS IN SWEDEN SWISH HAS HAD ITS BREAKTHROUGH % Which of the following payment methods do you know? 100 Know of and have used Know of but have not used % 51% 40 51% 39% % 21% % 11% 25% PayPal Swish Payson Wywallet SEQR Apple Pay MasterPass V.me 6% 19% 2% 8% 6% New payment methods continue to increase. PayPal is increasing only slightly, but has now been used by more than half of all respondents. This year s rocket is Swish, which is used by almost twice as many as last year. 4 out of 10 Swedes have now used the Swedish bank s service for peer to peer payments on mobile phones. A 90 percent brand awareness is a very strong performance for a brand that did not exist three years ago. The service has over the past year become a serious contender for the existing dominant mobile payment methods. From its launch in 2012 to the summer of 2014 Swish was a payment solution for private individuals, and then it became possible for companies, associations and organisations to offer Swish as a payment method. 34 NORDIC E-COMMERCE 2015

35 MOBILE PAYMENT SOLUTIONS IN PHYSICAL STORES MUST BE SIMPLE AND SECURE What would it take for you to start paying with your smartphone in a physical store? 19% Secure solution 24% Easy to use 25% Would not pay by smartphone in physical store 28% Quick payment 35% Availability 41% Easy to get started Within a short time there will be a number of new technical solutions to pay by mobile in physical shops. It is likely that the way to pay for products will undergo a dramatic change. Even today there are solutions to pay by mobile in physical stores but they have had little success. Some of the reasons why not many consumers have been using these solutions are that they are not perceived as sufficiently secure and easy. It is likely that big names are required, in which people already have great confidence such as the Swedish banks to support these solutions. For consumers it is important that these solutions are easy to use and safe. Both considerations are mentioned by at least one third of all respondents. It is also essential that the purchase is fast and that the solution can be used in many different shops. Only one in four says that they would not use their mobile phone for payments in physical stores. It remains to be seen how many of those will change their minds when the various solutions are launched and gradually make payments easier, faster and safer. 35

36 ONLINE PAYMENTS IN SWEDEN CUSTOMER CASE: EASYPARK PARKING METRES ARE BECOMING EXTINCT EasyPark has been present in the Nordic market for fifteen years. 30 percent of all parking services in Oslo are paid with the EasyPark app. There are fewer and fewer parking metres they are not necessary anymore. How have you become so successful in mobile e-commerce? We have a service that helps people in their everyday lives, that both saves time and money. It is possible to use the same app no matter where you are, so that the customer will not have to think about how to pay for parking. Another important factor is that we have focused on a niche and have not been tempted to offer everything to everyone. We focus on car parking services and we have become very good at just that. Do you see any interesting trends? We are seeing that what happened to phone booths is now about to happen with parking metres. The need for them decreases dramatically when everyone always have a mobile phone in their pocket. We are also seeing that coins as a payment method are disappearing. Meanwhile, mobile payments are becoming more independent from interfaces. Our service is not only available in smartphones and wearables such as watches; it already exists in the systems of many modern cars. How many payments are made with the app? This year we will reach an estimated 25 million transactions. Marie Johansson Revenue Assurance Manager EasyPark 36 NORDIC E-COMMERCE 2015

37 Most mobile customers want to be able to store card details % Would you prefer not having to enter your card details every time you shop online? 47% Yes 55% Yes Registering your card details each time you make an online purchase is perceived as cumbersome. Almost half of all consumers would like to avoid having to enter card details when they are shopping online. Amongst mobile consumers the proportion is significantly higher. 55 percent of mobile customers would like to avoid having to register the card information upon each purchase. The proportion is roughly the same in all age groups. 1 out of 3 would shop more via mobile if card details were stored % Would you use an online shop more frequently if you did not have to type in your card number for each purchase? 23% Yes 31% Yes Almost a fourth of all consumers say they would buy more in an online shop where they did not have to enter their card details upon each purchase. Amongst the mobile consumers, the figure is higher and rising; one out of three say that they would shop more in this type of shop. This represents an increase of 10 percent since last year. 37

38 ONLINE PAYMENTS IN SWEDEN Many cancel their purchases % Have you cancelled an online purchase in the last 6 months? 38% Yes More than one in three consumers have cancelled an initiated online purchase at some point during the past six months. The proportion is highest amongst those consumers who purchase most often with mobile devices. One explanation is definitely that these savvy consumers are more demanding and have come to expect a seamless process and a variety of payment options. The right payment method is important % Why did you cancel the purchase? Not the right payment option 34% Complicated registration 30% Payment process Unclear conditions 28% 28% Technical problems 24% Insufficient information Low confidence 19% 20% Not possible to pick up goods 4% The single most common reason that consumers cancel e-commerce purchases is that the shop did not offer the preferred payment option. More than every third consumer who cancelled a purchase responded that this was the reason. It is advisable to offer several payment methods, as it improves the conditions for a high conversion of visitors into paying customers. 38 NORDIC E-COMMERCE 2015

39 EXPERIENCED CONSUMERS DEMAND MOBILE OPTIMISED WEBSITES Have you cancelled a purchase because of the website not being adapted to mobile devices? 39% Yes CANCEL 4 out of 10 mobile consumers have cancelled their 4 purchase av 10 mobilkunder because the har site avbrutit was too köp difficult för att to sajten navigate and varit insufficiently för svårnavigerad adapted to och the otillräckligt small screen anpassad of a smartphone. efter mobiltelefonernas The most demanding små consumers skärmar. Andelen are the experienced har ökat något ones sedan who made förra mobile året. Högst purchases krav ställer at least de 11 vana times konsumenterna, in the past six months. We can also confirm that youth and young de adults som without handlat children mobilt minst make 11 very gånger high demands det senaste on mobile halvåret. optimised Vi websites, kan också compared konstatera to att pensioners ungdomar shopping och unga online. vuxna utan barn ställer mycket högre krav på mobilanpassade sajter än mobilshoppande pensionärer. 39

40 DANISH E-COMMERCE E-COMMERCE IN DENMARK 2015 We continue to increase our online shopping. Like last year, almost all the growth is coming from mobile devices, and most consumers are expected to purchase at least as much in the future. E-commerce continues to grow extensively across the Nordic region. In Denmark, the e-commerce market has risen from 42 billion to almost 59 billion DKK over the past three years. Just last year there was an 8 percent rise. It is a massive change that we are witnessing, and that almost everyone is a part of. A marked trend during the last couple of years is that a rising share of e-commerce is happening via mobile devices, mainly smartphones and tablets. In the last three years, the share of mobile sales has doubled in Denmark. 4 out of 10 online customers state that they have made a purchase via a mobile device over the past 6 months. The product category that dominates our online spending is travelling. According to consumers own estimates, half of their e-commerce budget is spent on travel. Consumers have since long been accustomed to buying holidays online. The travel industry started selling online at an early stage and has maintained its leading position when it comes to e-commerce development. Booking flights and hotels online has several tangible benefits. One can do research from a computer at home, compare prices, as well as see pictures and videos from different hotels and destinations. When a decision has been made, the vacation is paid easily by card. The product category that is becoming increasingly popular is subscription of TV and video streaming services. Today, one in three pays for services such as HBO, Netflix or Viaplay. This is most common among families with young children, who also lead the way in terms of development by using online services such as regular grocery delivery services, another product category on the rise. One can learn a lot from the data, with lessons that are beneficial both for those who wish to understand current trends as well as for businesses seeking to meet consumer demands. For example, statistics show that 15 percent of customers have cancelled an online purchase because their desired payment method was missing. In the U.S., 85 percent of all online shops are adapted to mobile devices (Internet Retailer Top 500 guide), compatred to only 58 percent in Sweden (Ebarometern årsrapport 2014, PostNord), and in Denmark the number is even lower. 40 NORDIC E-COMMERCE 2015

41 THE MOBILE BREAKTHROUGH % Have you purchased anything via your smartphone or tablet in the past six months? +90% % % 29% 20% % Norway 42% % % % 28% 16% Sweden 36% 32% 21% Denmark The e-commerce market experienced its real breakthrough two years ago. Since then, it has been steadily increasing in all the Nordic markets. 4 out of 10 online customers have used a mobile device to shop. This is the case in the whole Nordic region. In Denmark, mobile commerce has almost doubled in three years. Mobile commerce in Denmark is most popular among parents with young children. 69 percent have made a purchase via a smartphone or a tablet during the past six months. There has also been a breakthrough among young adults within the age group (58%). 41

42 DANISH E-COMMERCE MARKET SIZE AND GROWTH BN DKK Estimation of the Danish e-commerce market size % Estimat af det danske e-handelsmarkeds størrelse i milliarder kroner BN DKK +6% 47.2 BN DKK +12% 54.4 BN DKK +8% 58.7 BN DKK E-commerce in Denmark has a turnover of 58.7 billion DKK. That is a rise of more than 4 billion (8%) compared to last year. In three years, e-commerce has risen by 41 percent. The figures are based on an actual increase of about 15,000 online shops in the Nordic region. 42 NORDIC E-COMMERCE 2015

43 THE DISTRIBUTION OF E-COMMERCE IN DENMARK % How is your online spending distributed? (Last 3 months) 54% Travel & Services 36% Goods 10% Other & Media 4% Other 6% Media % Services 50% Travel There is widespread perception that e-commerce primarily focuses on buying products online. However, travel and services account for the largest part of e-commerce in Denmark, with a share of 54 percent. The products segment accounts for a third of all e-commerce. The Danish e-commerce market is completely dominated by travel. Travel purchases represent half of all the money we spend online. 43

44 DANISH E-COMMERCE A CLOSER LOOK AT TRAVEL AND GOODS % How is your online spending distributed? (Last 3 months) A closer study of the travel category shows that almost 67 percent of spending is represented by flights and hotels. Large differences can be seen between different age groups. The youngest category, ages 15-24, spend the most money out of all age groups on flights (40% of their consumption), as well as regional trains and bus journeys (15%). On the other hand, the oldest category, ages 55-74, spends 35% of their travel expenses on hotels, compared to the youngest age category that merely spends 2%. The oldest age group spends more money on taxis than other groups, whose average spending is 2% on this category. There are large differences in the consumption patterns of women and men. The number of men who have spent more than 3,700 DKK on electronics in the past six months (11%) is almost four times as large as the number of women. The number of high-spending consumers of clothes and shoes among females (6%) is double the amount compared to males (3%), and is actually even larger within the age group (8%). The product segment is fairly equally spread amongst four categories, each with a turnover of about 4.5 billion DKK. Other Cars 10% 5% Taxis 2% Flights 36% Health care 6% Electronics 25% Public transport 9% Travel Interior decorating 23% Goods Trains or buses 7% Hotels 31% Clothing & footwear 23% Home consumables 23% 44 NORDIC E-COMMERCE 2015