Stripe’s recently appointed managing director for Australia and New Zealand, Karl Durrance sat down with Retailbiz to discuss the company’s momentum in the Australian market, his growth plans for the region and insights into the local digital economy.
“When I look at our customers across different industries, there are three key opportunities. The first is around modernising economic infrastructure in the way that businesses manage revenue in their business. This can be as simple as already having a payments partner, but modernising the infrastructure and offering new features.
“The second is helping organisations build entirely new business models or user experiences, such as the work we’ve done with Scentre Group and the launch of Westfield Direct Click & Collect. We’re seeing the Connect product – our multi-party payout capability – experience a lot of growth, particularly in the gig economy among companies like Air Tasker and Deliveroo.
“And thirdly, the proliferation of marketplaces. For example, H&M has an ecommerce capability and physical stores but is also creating secondary marketplaces for products – again, using that multi-party marketplace concept,” Durrance explained.
Stripe engages with customers across verticals, but Durrance sees retail as a key focus area and recognises that the company needs to increase engagement with, and promotion of, retail customers.
“In 2021, we had about 100,000, new signups in Australia and New Zealand across various industries, which was largely fueled by the digital transformation of the pandemic. In the first two months of lockdowns alone, we onboarded about 10,000 customers, many of whom we helped move online for the first time, and we’ve continued to see healthy growth this year so far,” he said.
“We want to work with organisations to see how we can add value and help them expand globally. In aggregate, we have about 40,000 customers each month doing cross-border commerce on our platform. I think it’s an exciting opportunity to see how we can lean into that and help explore Australian innovation and assist businesses in entering new markets.”
Durrance acknowledges that cart abandonment is a huge issue, citing that around 70% of all carts are abandoned, so any opportunity to convert even some of that into a fulfilled order is an opportunity.
“Our research has shown if the checkout process takes two minutes or more, it’s going to be abandoned about 83% of the time and for those that support a digital wallet, particularly on a mobile browsing experience, the checkout time is three times faster,” he said.
“We know that in many cases, it can be harder than it should be for retailers to add additional alternative payment methods like Apple Pay or Google Pay, so a large part of our value proposition is doing the heavy lifting for them. We do the integrations allowing retailers to offer the payment methods that customers want to ultimately speed up the checkout experience, or at the least provide them the buying experience that they want.
“We know this isn’t going to solve the 70% of abandoned carts, but it’s going to solve some of the low hanging fruit and allows retailers to focus on improving conversion rates.”
Despite online commerce only accounting for approximately 10% of sales in Australia, Durrance believes it shouldn’t be underestimated as businesses are punching above their weight when it comes to technology adoption and performance.
“Australia is a smaller market and generally, businesses look at the opportunity in a different way, because overseas markets such as North America are so big. In Australia or New Zealand, there’s a point where you do need to look abroad for scale. It’s a challenge and while we solve the more technical side of what international expansion looks like, expanding into new markets is a complex thing,” he said.
“There is also a skill shortage in the market with respect to access to talent, which is needed to drive change and something that can hold organisations back. Part of our value proposition which is, in times where there is resource contention, it’s an even better time to partner. Don’t go and build everything. Instead, build the things that are specifically differentiating, and bring in a Stripe or another ecommerce platform like Adobe or Salesforce, so that you can get momentum and focus on the areas that are differentiating versus building everything.”
Stripe Climate, which was launched in the last quarter of 2020, is a passion point for Durrance, as it allows organisations to allocate a percentage of their revenue towards climate projects.
“We invest in carbon removal projects and organisations can report on the revenue they’ve contributed towards their ESG goals. We know Australians are passionate about this with around 40% of all Stripe Climate participants in the Asia Pacific located in Australia,” he said.
“When organisations are choosing to partner strategically with other organisations, they’re looking for more than just price. Features and functions are important, but they’re also looking for a degree of shared values, and how strategic objectives can be achieved together. I’m proud to work for a company that is investing in a completely different type of offering purely focused on improving the planet.”
On a final note, when asked for his message to Stripe customers, Durrance said: “We are here, and we are investing in the Australian market. We are keen to engage and work out how we can help organisations innovate, scale globally, reduce cost, improve conversion, and much more. We’ve got a team on the ground so we’re ready to go and I’m ready to help.”