Chief Executive Officer (CEO) and Founder, Icecat N.V.
Paneldiscussie Ed Nijpels, Wijnand Jongen, Martijn Hoogeveen, Jan Sundelin - Webwinkel Vakdagen 2011
Webwinkeliers doen zaken in een snel veranderende zakelijke en wettelijke omgeving. Wat zijn de belangrijkste politieke en maatschappelijke omgevingsfactoren die vanuit Den Haag en Europa op ons afkomen? Wat zijn de belangrijkste ontwikkelingen waar we in 2011 rekening mee moeten houden?
In deze paneldiscussie zullen Ed Nijpels, Wijnand Jongen, Jan Sundelin en Martijn Hoogeveen een aantal belangrijke trends en ontwikkelingen uit het vakgebied bespreken en ter discussie stellen.
About Martijn Hoogeveen
In a 2021 interview, Martijn Hoogeveen criticized the Dutch government's COVID-19 approach, calling it "crimineel" (criminal) for not prioritizing the general interest over economic concerns, and suggested that the government should promote the flu vaccine more due to indications it protects against COVID-19 mortality. He also discussed his background in psychology and artificial intelligence, and his role as a former part-time professor of multimedia at the Open University while running a data company with about 250 employees. During a 2011 panel discussion, Hoogeveen stated that major brands like HP and Philips had shifted marketing subsidies from physical retailers to online channels to increase margins. He also advised against buying shares in Facebook or Google, calling them "veel te duur" (much too expensive), and noted that the rapid growth of Facebook and Groupon indicated a trend toward "flash business."
Transcript (37 segments)
M
Moderator0:00
I want to start gentlemen with a question. What do you think the most important trends for 2011 will be?
N
Nijpels0:09
The most important trend is growth, continued growth. Last year growth was a bit less than previous years, but everything indicates that in 2011 we will see double-digit growth again. That's one. Growth in the number of consumers shopping online. Secondly, growth in the number of companies getting involved. If you look at Thuiswinkel.org, you see that two or three membership applications come in per day from new companies. So the big trend for the coming years remains growth. Besides the fact that many companies currently operating only in bricks will also operate in clicks in the future. So you see more and more companies doing both.
B
Beninga0:58
Yes, thank you. Well, I think I completely agree with the growth. I also agree that the traditional store absolutely must go online. So they need a combination. Probably not necessarily to sell online, but to be present online and attract customers to the store that way. I see a huge trend in social media becoming very big, that you trust your friends more than Google. We see this very strongly, and our large customers ask a lot about it, and we see success in that they also generate more revenue in their online store. For the coming year...
M
Martijn Hoogeveen1:47
We also saw in recent years in the online channel, and we measure globally because we deliver content worldwide, we saw a huge growth of around 70 percent. We do see a shift: e-commerce in Asia is becoming relatively more important. Most internet users are now in China, but that doesn't mean the most e-commerce is there, especially not relatively, as income is not yet that high. But you see that China has passed Japan as the second economy and is becoming more important, part of e-commerce. And I think it's also a part that Thuiswinkel.org doesn't measure well. It also relates to downloads, software, music, content, services, partly services perhaps. But those components are becoming more important in e-commerce and are much less bound by borders. Software you produce here can also be delivered in America or China, and the same applies to content and services. So that is a shift in the economy, a change in e-commerce, and it's good to think about that. Not to think: yesterday we sold toys, let's sell toys again tomorrow. There may be other opportunities in this market. The trends for 2011 as I see them, and also learned from my visit to New York earlier this month to the largest retail show in the United States, revealed two clear trends. One is that what we've been saying for years is now really happening: mobile and mobile purchasing on the internet, we will start with that. Let's not say it will happen significantly this year, but we will make a start. The foundation for mobile sales has now been laid by consumers massively adopting mobile devices, from phones to tablets and so on. You'll see that break through this year, and web shops will respond by actually launching applications and new web shops and web environments. That's one. The second trend I picked up there was that social commerce in 2011 is also at the beginning of breaking through. Social commerce means using social networks to start attracting attention, building customer relationships, showing where you are and what you stand for. That's a first start. In the United States, we already see what is called Facebook commerce emerging. In the Netherlands, it will be a bit slower, I think a year or two behind, so it will be slower. But the foundation will also be laid in 2011 to continue that trend, on which we can expect further growth and new developments in the coming years.
M
Moderator5:01
Okay, a few things. E-commerce continues to grow, both in the Netherlands and internationally. E-commerce remains important. If you're not on the bandwagon now, you have a problem. Content and services are becoming more important, and of course mobile and social commerce. Perhaps to start with the first statement: Mr. Nijpels, how long do you think this growth will continue? I mean, last year 15 percent, this year again double digits. It can't go on forever.
N
Nijpels5:22
Yes, it can go on forever, because as long as there are people who still don't shop online, it will continue. Half of the Netherlands now shops online, so we still have the other half to win, not counting children under 10. So I'm convinced that will continue for the time being. What will also increase is the number of purchases per consumer. Now there are some, the figures are known, who buy a limited number of products, but that will expand further. And I point to another development: the depopulation of parts of the Netherlands means that stores will disappear, and that means e-commerce will play a very important role in the context of that depopulation of the countryside. So in that respect, the prospects for the long term are extremely positive.
M
Moderator6:22
Any other thoughts, Beninga?
B
Beninga6:22
Yes, I also think the online store is very important. There will be a big shake-out. The shake-out is that business is now done differently on the internet. The store is used more for looking, touching, and then deciding at home. The store becomes more like Apple does, as a brand. The brand is established and the brand is also established online. And protecting the brand online is important, just as protecting the brand in other media. Therefore, the brand online must perform better, and you need more control over your own brand online. In America, where we have 40 percent of our revenue, we see that very strongly. And as Martijn also says, content becomes king. You must manage content and ensure that your content and your own brand are well represented online and in the store. And the entire supply chain changes. Supply in the store decreases, and larger inventories and more products become available via a click. And that becomes more efficient. If you work that way, you can achieve much better turnover, larger turnover, and realize many more impulse purchases in the store.
M
Moderator7:46
Will online retail growth go on forever?
W
Weinand7:46
No, absolutely not, especially when it comes to products. And if you look at sectors that were early adopters, you already see that growth has become marginal. So if you look at IT hardware, computers, etc., for example B2B e-commerce, that is already largely online. So there isn't much more to shift. So it just moves with the normal economic cycles, and that will happen with other retail segments too. And that's very logical. Maybe in about 10 years, the entire online product sales of physical products will be played out. But the economy is shifting. We have long been a service economy, and economists predict that around 2050, the West will be an information sector, with more value of GNP produced by content, indeed content is king, software, virtual information services. And we can hardly imagine what value people will attach to perhaps social experiences online, which we now say are worth nothing. So new things will happen.
B
Beninga9:18
Yes, I think Martijn is absolutely right. I think the growth of online shopping will continue for the next 10 years, but ultimately we are part of the economy and will follow and experience economic laws. I also think that with the integration of, for example, TV, internet, mobile, we will develop entirely new services, new segments, new experiences for consumers that we can hardly imagine now. Just think that 10, 15 years ago we couldn't imagine withdrawing money from a wall. Who would have thought we would ever do that? It was completely impersonal, impossible. Well, I think entirely new experiences and adventures await consumers in the next 10 years. You will see that the integration between TV, mobile, and internet will actually take shape in terms of content. And that will be a huge driver for being active online, for online experiences, for online adventures, and online purchasing is simply part of that.
M
Moderator10:23
Building on that, yesterday it was announced: Modern, or sorry, It's is closing its stores, bankruptcy, yet another in a row. Also the travel industry, the physical retailer is struggling. To what extent are two business models emerging: either you are an online pure player or a multichannel player. Do you have ideas about which business model will capture the most market, and that of course varies by sector, but generally?
N
Nijpels10:57
Well, first of all, I think it's important not to jump to general conclusions. We don't know exactly what's going on. It doesn't mean multichannel is outdated. I think multichannel, as you've also said, will become more common. People still want to see, look, smell, and feel products and then make a purchase online. So I'm convinced the multichannel movement continues. Last year we had a congress, the European Summit of e-commerce companies, and people from all over the world attended. It showed that the big brands that haven't gone online yet are all inevitably going online. Those top brands you see on the high streets of major cities are all going online. So that development will continue for the time being. You can come and see it in the shop, then order it online, and vice versa.
B
Beninga11:57
Yes, absolutely. I don't think it's one or the other winner. That's clear. The winner is the one who can run both types of stores. For example, IKEA, a Swedish company, I use it often, but IKEA still doesn't know how to do this. But in Sweden and the Netherlands, they sell a certain product range online, and you can order a small item or reorder, that's very important. But a large cabinet you need to be able to see. So the combination of that is the winner. And you need to have that game well in hand. And I think the losers, what's happening now, are those who can't optimize that game. And the supply chain is one of the most important in the whole game. Making the supply chain shorter, faster, and with less inventory is the whole game behind it. And if that game can be played well, large retailers will make a lot of money.
M
Martijn Hoogeveen12:58
But are you saying that multichannel will win the war over pure players? Yes, I don't think it will be one pure player. I think pure players are looking at how to further expand their market. Dell has always sold direct, but they've had a contract with Walmart for 2 years and now also sell through resellers. At some point, the ceiling of only online is reached, then you still have to grow. All companies must grow, that's the goal. And then they also look: the pure player looks at how to show certain products to people, how to set up pickup points, like at a Shell station or whatever. They are looking into that. And the other side, those who already have stores on the street, are looking at how to use online to better serve their customers. So it's not one or the other, it's who can play the game well. And one of the things is taking costs out of the supply chain, that's very important.
W
Weinand14:11
Yes, that's right. You have to look at the specific case. Modern was a multichannel player, they had an online activity. And it's different. It's deals with physical superstores, Media Markt, Saturn, and that's a trend that is also spreading in Europe in various areas. On the other hand, you have the trend of online superstores like Amazon with millions of articles. And I think Modern faced competition from both sides, and there was also a delayed effect of the crisis. The big brands, HP, Philips, the consumer electronics brands, since the crisis they've discovered they earn more margin by helping their online channel than by continuing to subsidize their physical retailers who were also price crashing. So the subsidy money, the marketing kickbacks from big brands, are shifting online. So the advertising and marketing budget, that's the other pillar of the business case for physical retailers that is diminishing. The big brands are also forcing their traditional retailers to set up online activities. So physical retailers must follow a multichannel strategy to survive. It's about the big picture, because otherwise their marketing budgets, their sponsorship from manufacturers will disappear, and that's too important for a business case. So physical retailers must be multichannel. And then they can choose, depending on their business model and how the business develops, whether to remain pure play or also have a shop, or like Coolblue gradually try to open a chain of physical shops. But that's a choice.
M
Moderator16:28
Would you like to respond?
J
Jan J16:29
Yes, very briefly. I think the bankruptcy of Modern, which was the web shop of the Impact Retail chain, has nothing to do with the web shop itself, nor with the multichannel approach or model. It simply has to do with the fact that It's, with more than 100 stores, had a weak market position in a middle segment where indeed both sides are pulling at the consumer, and they didn't respond adequately. So it's more a sign of the times for the retailer on the high street who doesn't anticipate or insufficiently anticipates with their product-market combination, pricing, etc., and fails to approach the consumer. There will be more chains falling, I predict, in the coming years that fail to distinguish themselves sufficiently in that market. Because let's be honest, I also know from the figures that the web shop of It's, Impact Retail's Modern.nl, was very successful, on the right track, an aggressive price player in the market, found everywhere, and performed extremely well. I believe in a combination where multichannel retail can be very successful, but I also believe in a situation where pure players that seek the depth of the market can also be very successful. So in my opinion, there is a place for both in this world of web shopping.
M
Moderator17:58
Thank you. This morning you emailed me an interesting case about, let's say, how far the legal framework is with internet and e-commerce. Could you... and a very nice situation occurred, or a very threatening situation occurred yesterday. Yesterday there was a court case at the Council of State where the municipality of Abcoude sued a web shop owner that he cannot run his web shop from home. Imagine: many web shops in the Netherlands, I think about 20,000, I think there are 10 to 15,000... Who here has their own web shop? Well, there are a number of people in the audience. But anyway, I think there are 10 to 15,000 web shops that, with all due respect to entrepreneurship, operate between hobbyism and mom-and-pop, so attic home situations. According to this ruling by the Council of State, it is crucial: can you run a web shop from home? The municipality of Abcoude says no, because you are retail and retail is not allowed in a residential area. So go to a shopping street. But that web shop, that home shop, has no business there. He is also not allowed to go to an industrial estate because we don't want retail there. So that web shop owner is completely at a loss, doesn't know where to go. I think it's absurd. Tonight on Pet News we will also talk about it and say something, but it's absurd that this can happen, that the rules are interpreted in such a way that there is no room for that web shop owner. And let it be clear that this ruling by the Council of State is of eminent importance for web shop owners. Does anyone want to respond?
N
Nijpels19:44
Yes, not to respond but to add. It is, as Wijnand says, an extremely unhealthy situation. And it could get worse if this cabinet gets its way, then spatial planning will be further decentralized and the government will step back. Then you get arbitrary policy in every province and every municipality. So in other words, you should prevent such situations from arising where an individual municipality can decide this. That means a minister should nip such absurd procedures in the bud through a directive.
B
Beninga20:20
I don't know specifically about this case, but I can imagine: we live in the Netherlands, we live quite close together, one of the most densely populated countries in the world. So I can imagine that if a web shop runs on a street with multiple neighbors and every day a 12-meter truck stands there and they sell wooden sanitary ware or something, you get considerable nuisance. And I can't imagine that in the Netherlands you can open a catalog company without going to an industrial estate, where you can have trucks and goods in and out. That can't be done on a street where people live. I don't know the situation, but I can imagine it's something like starting a business in the attic, starting small with one package a day, then it grows and grows. At some point, the neighbors say they can't park. So that could be the case. I don't really know how it is in this case.
M
Moderator21:16
Well, I want to say something about that. Look, that situation is no different from other freelance professions that also operate in residential areas. You have general practitioners, physiotherapists in residential areas, and many people come to them. Again, I'm not saying you should run a web shop from home with a counter like a retailer saying 'You are welcome between 9 and 5'. No, but for making an appointment to pick up a package or something, that should not be a problem. And if there is success, that web shop owner will naturally outgrow the home because the attic is only so big and the garage is only so big. So there must be room for that web shop owner to grow to that industrial estate where they are then not welcome. So we actually have a big problem here. And we think that as a trade association, we should address this in political The Hague to ensure that the interests of that small web shop owner are represented.
Mr. Nijpels, from a legislative perspective in the Netherlands, looking at Europe, you now see a number of developments in the area of privacy with cookies and in Germany a big discussion about Google Analytics and what they all know and whether it can still be used at all. How do you see the development of privacy and internet within Europe?
N
Nijpels22:33
Well, it is clear that when it comes to privacy, but also consumer protection, the rules will become increasingly strict. Germany is the prime example, with some of the strictest consumer protection. Germany has a lot of influence within the European Community. So it is reasonable to assume that European regulations will only become stricter in this area. And we have to wait and see what Neelie Kroes' digital agenda will bring. That discussion will take place within the European Commission and the European Parliament. But the trend is very clear: much further protection of consumers and further rules regarding privacy.
M
Moderator23:13
Are you really afraid that legislation will come that will harm e-commerce?
N
Nijpels23:18
Well, harm e-commerce? We will ensure that both in the Netherlands and in Europe, together with other Thuiswinkel organizations in other European countries, we represent our interests well. That's one. Two, I think you just have to take it into account, because at some point that legislation will be adopted by the European Parliament and you will have to learn to live with it. So you should never fight windmills. We must stand up for our interests and also fight excesses. We do that in the Netherlands sometimes when too heavy demands are made, for example by the Consumer Authority on the websites of our members. And we will do that at the European level too. But it's good to realize as web companies that regulations in this area will be tightened.
M
Moderator24:06
Ah, interesting that apparently privacy regulations or anti-spam legislation have had an effect, because last year the amount of spam on the internet decreased for the first time. That's interesting.
M
Martijn Hoogeveen24:17
Well, spam filters are also getting better. A pain in the ass for every web shop owner who wants to do business across borders is the VAT legislation and the not fully implemented Bolkestein directive. It was a great e-commerce directive, dealing with services, but it also clearly stated that it applies to products. So if you sell something online to the consumer market from the Netherlands to Portugal, Dutch VAT should apply because you are established here. That was the goal of that directive. Now it appears that in all legislation, the word 'product' is often omitted and it mainly concerns services. So you get a very murky situation where software downloads and music downloads from the Netherlands fall under Dutch VAT. But the moment an MP3 player is also sold and it exceeds a certain volume, say €1000 to Portugal, suddenly Portuguese VAT must be paid. That is a nightmare administratively.
M
Moderator25:33
Thank you, Jan J.
J
Jan J25:33
Yes, we fully support Neelie Kroes' digital agenda. And it has been there for a year. I myself am a member of a company where we support the new regulation in software and services. And it is very important that this is followed. In America, they are much further along and they also have a much larger market. And the VAT regulation there is very different across states. We have experienced that it needs to be built into software, and our SaaS services are ready for that. You need to help these institutions set up laws. And only the EU can do that, we can't do it in the Netherlands or Portugal or Sweden. There needs to be a central law. That's why the digital agenda is very important for the future. So that we can grow this into one economy together in Europe. And e-commerce is very important for that. And I think we are absolutely ready for that and will see the future. The biggest challenge we also have is the languages, the different languages and the possibilities of setting that up in a multichannel environment. In America, they only have Spanish and American, and here in Europe we have many more issues with that. But the EU has solved that well. And for years we have been able to do that in parliament, they have built fantastic software programs. And I am convinced that we can solve this together. This is not really big, it just needs more software to be built, and that's what we are good at, I think.
M
Moderator27:16
Martijn, thank you. I want to raise one more discussion point for the panel and then give the audience a chance to ask questions. Wijnand, you just mentioned that social commerce is really emerging. Where should I buy shares? Facebook, Groupon, Google? What will be the big player of the future?
W
Weinand27:33
Well, certainly not in Hives, I would say. That seems obvious. Yes, I think whoever knows that can say it, then I'll agree. It's clear that we are at the beginning of that whole development, and I think you need to be there very early, follow it from all sides, and just do it. You also have to experience and experiment. We do that ourselves, all of us. Just experience it, live it. Look from a business perspective and from the consumer's perspective, and then make the right choices. If I knew, I would say it, but I don't know either. Thank you.
M
Moderator28:14
Another, Jan J? I thought you were an Apple fan, about Facebook or Google?
J
Jan J28:20
Yes, well, I think there are three types of movements. Facebook is very important for the community. You have more trust in your friends. What have they bought? Is it good? Do you like it? Then more questions can be asked, more trust in what is there. And then you search on Google and the best, the cheapest comes up, or the one that invests the most for a click comes to the top. And the other is of course affiliate marketing, which is completely collapsing in this situation. This also proves how fast the internet moves. Who would have thought that Google would have fewer hits than Facebook a year ago? Not me, anyway. But that just happens. And yes, that's a movement on the internet, it's more about traffic. Who gets the most media attention on the internet? And at the moment, social media is very hot. What is the next step? That's the question.
M
Martijn Hoogeveen29:22
Martijn, I would not buy shares in Facebook and also not buy more in Google. I think those shares are simply too expensive. And the rapid rise of Facebook and now Groupon, which claims to have built up revenue much faster in its early years than Facebook and Google, proves that we are heading towards flash business. So I think before you know it, Facebook will already be outdated, just like Yahoo. Yahoo was first the big portal, then it became Google, and now Facebook, a social layer on top, blah blah blah, and then something new comes along. And everything works, but in a few years there could be something completely different. So it also makes it fun as an entrepreneur that you might have a lucky shot. But I also think it's important as an entrepreneur to look at long-term developments and focus on basic services or things that last, rather than things that just peak one year. Fufu zela, a download that was hugely successful during the World Cup and brought in good money for the initiators, that's also a flash business, then the business is over, it's gone. There are people who are very good at that and very talented. But I would not buy shares in Groupon, Google, or Facebook. I think before you know it, those shares will be worth nothing.
M
Moderator30:57
Thank you. It's nice to see that the Thuiswinkel organization has been a stable factor in the internet landscape for years. Mr. Niel?
N
Niel31:03
Yes, I would also like to answer your question. I read this week that the 10 billionth app was downloaded from the App Store. At the same time, I also read that 80% of apps are used only once or twice. In other words, people download them and then store them in their archive and never use them again. In short, it is very unpredictable. What I always hold on to is a beautiful quote from Bill Gates, who once said during the presentation of one of his annual reports: 'If you think you can predict the development of the internet over a 2-year period, you are extremely smart. If you can predict it over a 3-year period, you are brilliant. If you think you can predict it over a 4-year period, you are crazy.' And I always stick to that. I think it is completely unpredictable what the world will look like in 4 years in this area.