Money 2020 Asia | Adyen Keynote & Singapore POS Announcement by Adyen CCO Roelant Prins

Chief Commercial Officer at Adyen. Our DNA is a payments platform, and we help merchants across the world accept payments from their consumers. A lot of people know us for all the work we do with many of the leading tech companies, so people like Netflix, Facebook, Uber, Grab in this region. But we do much more. We work a lot with airlines, 40 across the world, a lot of travel companies, and we spend a lot of time with marketplaces, companies like Etsy. And recently we announced a deal with eBay. What we do is we're really bringing together our global sellers and buyers to make transactions go frictionless for them. But today I'd like to talk about something differently. I'd like to have a close look at what are the main trends in the retail space right now, what are consumers actually thinking about it, and how can payments play a role to help them get to the future. And I'll show you some actual examples of what we're doing with a lot of leading retailers to get to that next phase. At the end we have a small announcement to share as well. So let's have a look at today's retail landscape and what's going on. First of all, if you look at the growth of retail, these are US numbers: 4% of retail growth last year. But if you look a bit closer, e-commerce growth for retail was 16%. We're seeing similar numbers across the UK and many other countries. And then of course this is just a snapshot from the news from the past weeks: Amazon moving into Brazil, Amazon moving into Australia, Amazon Go opening up six new stores, Amazon going into fashion. It's like this big dark cloud over retailers. What do you do against this? Everywhere we work with companies, people talk about it. This is something I borrowed from L2 last year. They are better in fast delivery, lower prices, better product choice, better user experience. They're winning on efficiency and convenience. It's really hard to compete with that. So specifically for highly comparable products, electronics, sports apparel, it's almost game over for traditional retail, you can say. So why do traditional retailers and stores still matter at all? Well, there's a few other things going on. Amazon is opening actual physical stores. There's quite a few more. So Noses is opening stores. Why? Because people can really get the experience. There's a really good statement I thought. Indochino, they started as an online player selling custom suits for men online, but their CEO said, "Not every customer wants to do something one way. We know that our customers like to buy online, but we also know that there's a whole other set of customers that prefer to have someone walk them through the process and give some personal advice." They're opening up stores. So what do consumers want? It's such an important area for us. Last year we conducted quite a few researches and surveys across the US, the UK, Australia, here, Paris, France, to get a feel for what do consumers want. The same huge annoyance: long queues are the biggest annoyance for people when shopping in stores. This is an annoyance that has to be dealt with, a main annoyance factor everywhere. But there's also other sites. Bright lights. 76% of people actually like to go shopping. They like it in the US. 33% of shoppers actually state that they see shopping as a social activity. They like to go out there, spend time in stores. There's more in the UK. 63% of people want to touch and try products. On the other side, 49% of people in the US claim they're not interested in advice from a sales assistant in store. They don't want it. Even stronger in Britain, almost two-thirds of people state that they probably think they know much better what they want, and they know much better than the actual sales assistant. Something to think about. In Australia, half of the people made clear that they would really like to have the possibility that if something is not in stock in a store, they can still purchase it and have it shipped to their home. So a lot is going on, things are changing. And in our opinion, the way we look at it, there's three things that are really key for retailers to survive and actually thrive in the future. Those three things are: you gotta make consumers really fall in love with your brands. You gotta find ways for them to build a relationship with you, to build an emotional relationship and have a true experience that they go and love and connect with you. Secondly, the experience has to be super convenient. This is the norm today set by a lot of the e-commerce players, but you have to make it very easy. How does payments fit into this picture? What can payments do for retailers to get to where they want to get? In our opinion, hey, we're a payments company, but still we feel that payments can play a real big role in enabling retailers to get to where they want to get to. And I have a few examples for you, some of the leading retailers across the world and some of the things they've implemented to get to that next phase. Before I show them to you, I'd like to talk very briefly about the end because they'll give you a bit of context on the examples. Australia. So Adyen is known to be an online payments company, but for a few years now we've been very actively working on the same platform. So they have a unified view of their customers, and they have much more understanding of their customer behavior and can make the interactions much more easy and convenient. If you look at the companies we work with, this is a snapshot, but there's companies like Adidas, Scotch & Soda, Sephora, Zara, all companies we work with. And they're working with us both for online and in-store and bringing the experience together. And we're working with them in many different markets now. Let me show you a few of these things we're doing and some of the specific examples where I feel retailers are taking the next step in improving the experience. They decided to make them themselves. They're a really successful online player, and after a few years they decided to open up stores. By now they run more than 30 stores in the US that aren't traditional stores as we know them. They are what they call guide shops. You make an appointment, you get a personal fitting, and you get the product you really like. There's a coffee or a beer, whatever you like. So it's a very personal approach. They make a profile, and you purchase the product. The moment you buy the pants or the shirt, they will never give it to you right there. They will always ship it from their central warehouses, enabling a really low-cost infrastructure, but also making sure that in payments geek terms, we tokenize. We store the payment details so that for any future product you want to buy in the app or online, you don't have to provide your payment details at all the next time. So they're making the future purchase really, really simple. You already know your size, the payment details are already stored. So if the trousers you bought, you like them, they're on sale in a different color, it's really one click and you buy the product in the right size and you have it the next day. They're making it very convenient and very personal. Another thing we're spending a lot of time on, and one of the things that many of the luxury fashion retailers have a big need for, is the ability to serve Chinese customers. More and more Chinese tourists are coming to Europe, to the US. They're bringing a lot of money and purchasing products. So across these retailers, they need to support Alipay and UnionPay at the point-of-sale. It's very significant. What we do with these companies is we make it available on the actual mainstream payment terminal. So there's not a tablet that has to come out somewhere. It's fully integrated, making it a really convenient and seamless process for Chinese shoppers to purchase with these cards. There's all sorts of things going on, and it's a way to fall in love with a brand. They do that really, really well. And they don't only have counters where you check out if you buy products. Now they actually have a lot of people. Everybody that works there has a mobile checkout payment terminal with them, so that at any time it's really convenient to purchase and pay. And we work closely with them across Europe and the US. So it's a fully standardized solution. This is another example to deal with the queue busting, the queues, the biggest annoyance of shoppers across the world. The way to deal with that is again to use new payment devices, new payment experiences with mobile payment. They do away with the traditional checkout counter altogether and make the entire retail floor filled with mobile checkout. This is what we call the endless aisle. The end of hours when you deal with a big issue that every retailer is focused on: you never want to miss a sale. Someone comes into your store to buy something, it's not available in store, you don't want to let them go without anything. It's a double disappointment. So the endless aisle is where you actually have a web-based terminal in store where people can actually purchase the product and you ship it the next day to their home. It's something we've seen all around. But what we're doing here with bankers again is something that's really important. That token, they actually can pull up all the customer details like the address, etc., so that for the consumer when buying in the endless aisle, they don't have to provide any other information than the payment. The address and everything is there, so the product can be shipped. That's convenience. Something simple but important: if you're able to do payments online and in-store, it's also really simple to allow people that have purchased with you online to bring back the product in store and get a refund. We've all gone through the situation of trying to get a refund for something we bought online in-store, and we had to sign five different receipts somewhere in customer service. By doing it this way, you can do it right where stores play a role. And then the final bit we talked about was cost savings. Scotch & Soda are a Dutch company, but they have stores and are opening many stores across the world. They moved from using 15 different providers for ten different countries for their online and in-store payments, and they're able to move it all to one. By doing so, the cost of managing their financials, the cost of managing their development infrastructure, their hardware has significantly decreased, setting them up for success in the future where low cost is really important. We've seen these different payment terminals and solutions. To move it to a complete new solution is a lot of work and investment. The investment payback time on efforts, however, is six months. And over three years, there's a return on investment on this through higher revenues and lower cost of 106%. 70% of cost efficiencies in streamlining and automation of processes. That's a big deal. Then to wrap it up, there's something we'd like to share with you today which we are excited about. As we are building our company, as we're expanding internationally, there's a new solution for our merchants. This means that it's live today. The zest group out here in Singapore who run ABC Boulangerie, their life today on Kalani streets, so you can actually see the audience solution at work in a live setup. Thank you so much.