Claudia Patocchi is Team Leader of the Product Management for International Business Solutions at Swiss Post in Berne. In this function she is also a specialist for world-wide distance selling solutions for e-commerce customers in Switzerland. She started her carrier in the product management of B2C solutions and within the partner management of alternative distribution solutions, which allowed her to gain many years of experience in the distance selling area. Ms. Patocchi graduated in Business Administration at the University of Cologne and also studied International Management at the Haute Ecole de Commerce (HEC) in Paris.
1) E-commerce is growing at full speed in Switzerland, but international markets are developing their potential as well, throughout Europe and overseas. Why should a Swiss company sell internationally?
The Swiss market is very small in comparison to the European market, and if the Americas and Asia are added as well, there are almost unlimited possibilities for Swiss companies to increase and multiply their sales potential abroad. The excellent quality of Swiss products wins over customers. This can justify a higher price. Typical Swiss products in particular are very popular abroad (for example: Victorinox, Freitag bags, etc.). However, higher-value products where customers know that they can rely on the quality and will not receive counterfeit or damaged goods are also in demand, especially in Asia. In addition, shop operators with lower-value goods can use the locational advantage of Switzerland and profit from VAT advantages in comparison with their European colleagues.
2) Becoming international is a multifaceted challenge: what are the main factors, particularly concerning currency value, to be taken into account?
If a Swiss company opens up its homepage for international orders as well, it makes sense to react to the respective conditions regarding purchasing power and currency in the price strategy as well. Customers in Germany are offered the products directly in euros (depending on whether it is more inexpensive than in Switzerland). At this time, shop operators bear the currency risk but can also orient their price policy to the respective target country.
Legal aspects must also be checked and properly regulated (general terms and conditions, etc.).
3) What are the key issues in the logistics and distribution field that an e-commerce seller should also consider when handling cross-border operations?
Cross-border e-commerce is both a challenge and an opportunity!
It must not be forgotten that the delivery of the ordered goods is the only physical contact between the shop operator and the customer. It is therefore important that everything runs smoothly during this process and that the important aspects are taken into account and planned for at the very beginning. Then there will be no nasty surprises for the shop operator or the purchaser, and the purchaser will become a satisfied customer.
Frequently mentioned barriers to cross-border e-commerce are the high delivery costs, long delivery times, complex customs and VAT formalities, and complicated return processes.
For this reason, it is important to have the right partner at your side for logistics, in order to overcome these barriers together and be transparent to customers at the same time. As a result, efficient logistics and properly running delivery services lead to a successful shopping experience for the customer, which in turn leads to repeat purchases and positive feedback in online forums.
Specific examples for logistics/distribution that can be considered from the very beginning are: In Warehousing & Fulfilment: Clarification of the correct franking and labelling of the goods helps to achieve a smooth procedure when delivery staff hand over and deliver the consignment in the destination country. Selecting a warehouse location near an airport/letter center can also reduce delivery times. Clarifications regarding customs and VAT, dangerous goods and the correct declaration on the consignments prevent blocking at customs and delays in delivery. Selecting a DDP solution (delivery duty paid) for higher-value products allows customers to receive goods conveniently in their letter box without further expenditure. In the case of lower-value consignments, the online shop and recipient benefit from VAT exemption limits without incidental expenses.
In Delivery, it is important to communicate realistic delivery times in order not to strain the recipient’s expectations. The Track & Trace option relieves shop operators and their customer service, as customers can independently check the progress of their consignments. At the same time, the shop operator can react if there are unexpected problems with shipping (customs blocking, delivery to neighbour) and inform the customer correspondingly or send out a replacement consignment. Returns management can also be planned in advance with various steps, for example with a precise description of the goods (reduction of returns) as well as the use of online return labels that require a certain initiative on the part of the customer and simultaneously inform shop operators about the goods returning to the warehouse for new orders.
4) How prepared do you feel Swiss entrepreneurs are, particularly in understanding opportunities and challenges? How could awareness and knowledge be promoted further?
Currently, Swiss companies, especially SMEs, are still reluctant to take the step abroad. The above-mentioned barriers in particular are over-interpreted, as the corresponding information and contacts are lacking. Companies such as Swiss Post must increasingly present themselves as a support for customers and advise them in taking a step abroad.
The aim is not to be deterred by the obstacles but to understand these barriers and overcome them together with strong partners. In this case, the online shops are not alone. And the Internet offers too many possibilities for increasing one’s own limited market and sales to withdraw or be deterred from taking the step abroad out of fear. This means that everyone must become more aware of the opportunities that the Internet offers, and the challenges have to be relativized or well planned and thereby overcome. We have noticed that smaller startups in particular are currently taking the step abroad more quickly and are successful at this.
5) If you had to sort industries and target countries, where do you think that the priority should lie?
According to European studies, countries such as the UK and France as well as the Scandinavian countries are very strong in cross-border e-commerce. However, Asian countries such as China and Japan also like to order from abroad. Due to the language affinity, the neighbouring countries would initially be attractive to Swiss e-commerce operators, as this would reduce the expense of opening up an website.
The product groups vary quite a bit; these can be typical Swiss products such as pocket knives and chocolate, or higher-quality products such as watches or simply niche products. The VAT advantages from Switzerland for lower-value products should of course also be kept in mind.
6) What are the current challenges for Asendia Switzerland?
Swiss Post also faces the familiar obstacles in e-commerce: delivery cost pressure, T&T requirements, customs and VAT challenges, returns management and fast delivery times.
7) How does Swiss Post, as a postal service provider, deal with these challenges?
Swiss Post is in close contact with its customers, both to support them in successful efforts in cross-border e-commerce and to learn about new customer requirements and to find solutions.
In addition, Swiss Post also works on an international level on various projects in the field of delivery with T&T, so-called DDP solutions and returns management.
8) What are the next projects and activities? Are there events that entrepreneurs and entrepreneurial associations can attend in order to share knowledge and spread information?
Specific projects include the Interconnect Project of the IPC (International Postal Corporation), an e-commerce initiative with the goal of offering a fast, reliable delivery option including state-of-the-art RFID tracking. Swiss Post also works together with other postal companies on a solution for a prepaid, trackable returns solution. Projects in the field of DDP solutions are currently in development as well, so that goods ordered from Switzerland arrive at the recipient without additional costs.
Within Swiss Post, the importance of e-commerce is also recognized, which is why a Group-wide e-commerce group known as PostCommerce has been set up. Part of this project is the YellowCube service. This offers SMEs outsourcing options for storage and ordering.
We can help customers along the entire value chain.
With this service, customers can rely on the expertise of Swiss Post from A to Z and freely select individual service modules (e-marketing, distribution, payment service, returns management, customer care service).
The next interesting event is a Netcomm YellowCube event, at which SMEs can familiarize themselves with the YellowCube options, find out a lot of new information about the service and support from Swiss Post, Netcomm and further partners on the topic of internationalization, and make contacts. In addition, there is another interesting conference with a trade fair in Baden, Switzerland in November, Swiss E-commerce Conference TRAFO.
9) What is the added value does Asendia Switzerland offer to any customers interested in starting to operate internationally?
Apart from that, Swiss Post acts as an integrated e-commerce provider; end customers can rely on a national and international partner in the e-commerce business and select the support that they desire from among different modules. Experienced project team members are available for this. In the field of internationalization, Swiss Post can also look back on lengthy experience and a portfolio of satisfied customers. Swiss Post’s strength is that it can respond to individual customers and their requirements and develop individual solutions with customers to allow them a successful start in cross-border business.
10) Why are you supporting Netcomm Suisse and what are the objectives that such an organization should meet in order to help the market as a whole to grow and mature?
Netcomm Switzerland is the first e-commerce association in Switzerland. Netcomm is committed to ensuring that operating frameworks are created that support entrepreneurial performance within the e-commerce sector. The association also offers a platform that serves knowledge transfer and exchange of opinions among individual market participants. Furthermore, Netcomm organizes regular information events at which the latest conditions, market developments and trends in the international e-commerce sector are discussed.
As a logistics company, we are active in the international e-commerce sector and offer our customers the right solutions. To continuously optimize our range of services, we require a regular transfer of knowledge with all market participants. The partnership with Netcomm helps us to do this.
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