Netherlands

Social media

A core component of any brand’s marketing communications strategy, social media usage is gaining traction in the Dutch market, both from a consumer and brand point of view. Social media interaction is very strong in both markets, with around 79% of internet users having a Facebook account. Twitter and LinkedIn are important in the Netherlands. YouTube has high levels of usage, really reinforcing the importance of video based advertising spend that was reported by IAB Netherlands. Looking more closely at Facebook engagement, ecommerce in general has high levels of engagement with a combined 14.9 million followers. General retail also fares well with around 10 million fans, according to socialbakers.com.

In terms of social engagement, levels of fan engagement are high in the Netherlands, although heavily one-sided. With an average 300,000 follower per brand in the top 20, they each only post 42 times per month on Facebook. The ratio on Twitter however is much closer, with fans posting over 26,000 times and brands responding 126 times. It would appear that there is potential for brands trading into this market to increase the levels of engagement. Although, Insites Consulting has reported that consumers don’t necessarily want a lot of engagement, particularly around commercial activities such as discounts; although this reluctance is easing as consumers get more comfortable with the social channel. Aside from the marketing opportunity, studies3 have shown that 70% of those social media users contacting customer services expect a response within 15 minutes. 66% of these expect responses through the same channel as well; highlighting the need for close monitoring of the social engagement

Email Marketing

In common with other markets, the use of email as a marketing tool is far from dead. Mobile engagement is reinvigorating this trusted marketing channel. The Dutch and Belgian markets show healthy levels of email engagement with National Email Benchmark reporting Confirmed Open Rates (COR) of over 35%, Click Through Rates (CTR) of 7% and Click To Open (CTO) rates of 17.4%. Irrespective of workday or weekend, desktop still dominates actions driven through email e.g. ‘clicked on’. However, open rates are evenly split by device over the weekend, whilst desktop accounts for 60% of email opening; perhaps mobile is used on the way to work during the morning commute as a way of prioritising follow-up activity. This would appear to be reflected in open rates via mobile, depending on the time of day. Breakfast, lunch and early evening seem to be the time where engagement is highest.

The peaks are much less defined over the weekend, perhaps when time constraints are less rigid. These data points highlight the importance that mobile devices have in the customer journey, particularly during the discovery phase. They also reinforce the role that email has in the marketing mix in the Dutch market whilst suggesting that frequency, timing and content should be tailored depending on the desired outcome. International merchants will notice that these trends are common to many other markets so existing platforms are likely to be able to cope with these local requirements

Direct Mail

The Dutch consumer market still has strong DM activity. Industry data compiled by Post NL and Spring Global Delivery Solutions suggests that 87% of physical DM is opened and read. With reading rates on the same day at 85%, DM can be an e cient mechanism for both acquisition and driving website traffic. Highlighting the impact that DM has on digital enabled sales in these markets, 67% of online searches are trigged by the mail piece. Online advertising, in conjunction with physical DM, leads to a 25% increase in response rates. As a brand development vehicle, DM obviously has its place in its ability to present a ‘physical form’ to the consumer which has benefits when trying to develop a presence in-country. As an activity to drive sales, DM has the potential to reinforce online messaging or to introduce new ideas. This will have benefits in helping to upsell and cross sell, drive brand loyalty and develop cost efficient traffic to an online presence. Where possible, unique URLs and offer codes should be used so as to be able to track the benefit and take the customer directly to the products or offers mentioned in the DM. However, as there is evidence that 35% of Dutch shoppers in the 18 – 24 age group use website ad-blocking so ware, DM combined with digital marketing has a role in consumer communications for some brands. This will be particularly true where DM can support a brand message that arrives amongst the almost 100 marketing emails a week that Dutch online consumers receive.

Major Shopping Categories

The key category is fashion with the majority of growth through to 2020 expected here. The solid growth prospects across the other categories are also interesting, particularly with furniture & appliances expected to challenge electronics for size over the same period.

Security

EU Unfair Commercial Practices Directive 2005/29/EC transposed by NL – Book 6 Part 6.3.3A Dutch Civil Code on commercial practices, consumer information and consumer protection (‘LPMC’) replaced with Book VI of the Belgian Code of Economic Law – Market Practices and Consumer Protection 21 December 2013. Meant to protect consumers from unfair commercial practices such as advertising, pricing and contract terms.

EU Consumer Rights Directive (CRD) 2011/83/ EU amending 93/13/EEC and 1999/44/EC – NL – Book 6.5.2B of the Civil Code and Book 7.1 – 11 March 2014:

1. Confirmation requirements around conclusion of a contract e.g. digital services
2. Clarification of rights with digital products / services
3. Delivery periods made clear and limited changes with agreement
4. Ancillary contracts automatically cancelled e.g. insurance associated with a product which is then returned.
5. Cooling off periods extended; 7 business days to 14 calendar days
6. Reduced refund period – 30 days to 14
7. Linking of receipt of returned product and refund period activation
8. Banning of pre-ticked boxes
9. Improved cost transparency
10. Obligation to pay – clear text at point of order confirmation (‘buy’ button)

eCommerce Directive 2000/31/EC of 8 June 2000 – NL – Amended Civil Code, 11 March 2003 of Civil Procedure, the Criminal Code and the Economic Offenses Act. The purpose is to protect legal aspects of the provision of information society service such as commerce. Requires online traders to meet certain requirements:

1. Impacts most eCommerce traders with some exceptions, such as gambling operators.
2. Provides for the freedom of establishment – allowing traders to conduct business in other EU member states without permission; areas exempt include consumer contracts and financial services products/services
3. Information Requirements – certain business details must be available on the website, including contact information and how contracts are concluded. Failure to display some of the information requirements can invalidate contracts.
4. Commercial communications must be clearly marked as such.

Domestic and preferred card schemes

In the Netherlands a lot of people pay online with iDEAL, an online payment method that allows customers to order online using direct online transfers from their bank account. Since the introduction in 2005 more than 400 million transactions has been completed with iDEAL. 

The number one payment method is iDeal. This payment method that’s supported by the majority of local banks, is the preferred payment method for 55% of online shoppers.

Mobile Appetite

Mobile technology is used widely in both countries with mobile phone penetration in both well over 100%. Smartphones are also gaining traction at 69% in the Netherlands. Tablet usage is increasing, meaning mobile strategy will be an important element for any merchant trading into the region. Around 18% of Dutch e-retail is carried out via a mobile device. Overall, the use of mobile devices for transactions in the Netherlands, at 18.3% of total online retail sales, is only marginally lower than the European average, which is really driven by massive adoption in the UK and German markets.

Alternative Payments Methods

Credit card use online is low in The Netherlands. The predominant payment method is iDEAL, an inter-bank system for online banking. Direct debits (“incasso”) and other bank account-based payment methods such as regular bank transfers are also popular. Circa one third of the population has a credit card, but 98% have a bank account and can use iDEAL and direct debit.

Other Payment Methods

• 55% iDeal
• 23% Credit Card
• 15% Direct Debit
• 7% PayPal 
  

Custormer Experience

The Dutch market is relatively straight forward from a language perspective. Dutch is the official language but English and German is widely spoken. International merchants would gain a degree of traction in this market using either of these although a native Dutch site would provide more potential. As in any territory, there is always a reluctance to trust online merchants early on in the trading relationship, certainly until a degree of transactional history has been created. Ge ing customers to purchase for the first time is the biggest challenge; keeping them comes down to the strength of the proposition and how closely the brand sticks to the customer promise. In Belgium, key drivers for online purchasing are price (46%) and simple returns (57%).

Payment Security

Consumer concerns around online security and payments is key to the success of online. 15% of Dutch consumers are very concerned about online banking fraud according to data compiled by Statista.com in 2014, while 39% are fairly concerned and these figures go some way to explain the success of iDeal which is seen as being more secure than card payments.

The international card schemes, Visa, MasterCard and American Express have all introduced additional security features for online card payments. The most notable is 3D-Secure. This is a mechanism by which card users have to authenticate themselves during the online transaction by responding to a security challenge, usually providing a full or partial password response. Card issuers in both territories are supporting 3D-Secure functionality and according to the Ogone 3D Secure Barometer in 2014, that latest data available, 60% of Dutch online card transactions are being authenticated by this method.

Local Entities

Almost every major country in the world has a NFIA office: http://investinholland.com/ This network support large and medium size companies to establish an entity in the Netherlands. Access to their network and recommendations are free of charge.

Mobile Payments

Overall, the use of mobile devices for transactions in the Netherlands, at 18.3% of total online retail sales, is only marginally lower than the European average, which is really driven by massive adoption in the UK and German markets.

Infrastructure

Global Carriersl Carriers

Fed Ex / TNT

These two companies have now combined and dependent on the service required and the point of origin, different services may be offered. As examples transit times are shown from the UK and the US:

• Fed Ex – International Priority – 2 business day to main centres – from the US
• Fed Ex – International Economy – 2 to 5 business days – from the US
• TNT Economy Express – 2-day delivery – from the UK
• TNT Express – Next day delivery – from the UK

UPS

UPS offers a range of services and delivery times to the Netherlands subject to country of origin and the specific destination. The example service times below are from the UK from where all the services are available except UPS Expedited (which applies only to non-EU destinations). UPS services are designed for business deliveries and the service times shown are for delivery to business areas. Residential / rural areas may take a little longer and may incur a surcharge.

• UPS Express Plus – next business day – delivery by 09:00
• UPS Express – next business day – delivery typically by 10:30 noon or by 12:00
• UPS Express Saver – delivery by end of next business day
• UPS Expedited – 2-5 business days – delivery by end of day – 2 days from the UK
• UPS Standard – day definite by date scheduled – delivery during the day – 2 days from the UK

The Express services come with a money back guarantee should the delivery be attempted after the specified time.

DHL

DHL offers four service options to Belgium and the Netherlands with example transit times to main centres shown below – deliveries to remote areas may take slightly longer:

• Export Express 09:00 delivery the next possible working day
• Export Express 12:00 delivery the next possible working day
• Export Express Worldwide – Guaranteed delivery by the end of the next possible working day
• Export Economy Select

For ecommerce deliveries it is likely that the most viable option will be Export Economy Select where, by example delivery from the UK is 2 working days.

DPD

DPD offers four main international services to the Netherlands with availability and transit times dependent on the origin of the shipments:

• DPD Direct – a consolidation service with transit times of 3 to 4-days from the UK
• DPD Classic – offers an intra Europe service with delivery typically between 2 and 6 days » 2 days from the UK
• DPD Air Classic – typically offering global delivery in between 3 and 10 days » 3 to 4-days days from the UK
• DPD Express – typically offering global delivery in between 2 and 8 days » 2 days from the UK 
  

Domestic carriers

In addition to the global carriers mentioned (which will also be domestic carriers in some markets), domestic carriers based in the retailer’s own market will often accept online retail orders and ship them to the Netherlands through third parties. Domestic carriers will sub-contract the onward shipment, often to a global carriers or postal service, but for a retailer holding a contract with a domestic carrier this can be a natural starting point for accessing services in cross-border markets. Finding out what options they provide can be a useful benchmark. Service times will vary depending on the line haul arrangements in place and the service partner chosen.

Direct access

Direct access describes a solution used to consolidate volumes from di erent senders to achieve be er air transport rates. Consolidated orders are shipped to the destination country where they are handed to local partners for the final delivery. Direct access operators provide a managed service that can include:

• In-transit tracking
• Customs clearance – often ‘wheels up’ in advance of arrival
• Multiple points of entry – reducing ‘in country’ line haul costs and lead times
• Calculation and payment of duties in advance of order and dispatch
• HTS (Harmonised Tari Schedule) code classification
• Tracked returns – for unwanted and undeliverable items

Where a retailer has sufficient volume to be able to contract with a direct access operator there is the opportunity to get a ‘courier’ level service at less than ‘courier’ rates.

Parcel brokers

Parcel brokers provide retailers a way of accessing be er pre-contract rates through postal operators, global and domestic carriers and direct access providers. Parcel brokers do not offer all carrier options, only those that choose to contract with them and some are more suited to consumer and SME retailer dispatches. For example, companies like Parcel2Go and Parcel Monkey provide this channel into the Netherlands using the likes of TNT, DPD, Asendia, UPS, Hermes and Parcelforce. For larger retailers, bulk brokerage is available to Belgium. A leading broker for these markets is Spring Global Delivery Solutions who consolidate volumes and use their resultant buying power to obtain preferential rates from service partners, creating savings which can be shared with their clients. Brokers may, in some cases simply sell on the services of their chosen partners or, acting in a similar way to direct access operators, can also create service packages.

Integrators

Retailers with a reasonable volume of orders going to the Netherlands may wish to consider the option of parcel management service integrators who can provide immediate integration with a wide range of service providers delivering into the Belgium and the Netherlands market. These will include most of the options above (excluding parcel brokers) and many others. The retailer will need to have or enter into a contract with the delivery service provider but then the integrator will o er the ability to allocate orders to the most appropriate service – using agreed business rules – printing labels and customs documentation, providing tracking and helping to manage returns. For smaller retailers some integrators o er their own parcel broker option that can help obtain better rates. Providers of such services include MetaPack, ITinSell, Consignor and Electio.

In-country fulfillment

Should a cross-border retailer generate suffcient orders to fulfil those orders ‘in country’ then it may choose to hold its inventory more locally. For example, PostNL – the Dutch postal operator, provides a fully managed solution including warehousing and warehouse management, order picking and packing, IT and customer services support with, of course access to a full range of transportation and distribution services

Imports Duties

The question of taxes and duties needs to be referenced under the heading of logistics because any error can clearly delay clearance and delivery to the customer. The delivery operator selected will be able to provide full details and advice on the necessary documentation and processes and some can go further by pre-clearing orders whilst the goods are in transit or at the start of their journey using a Consumer Duty Paid process. This can be done using the HTS (Harmonised Tariff Schedule) code assigned to each product category and can reduce delivery times and remove a potential barrier of having the goods held when they arrive in the Netherlands. Retailers are therefore advised to specifically ask what their chosen delivery partner can do to facilitate customs clearance and duty calculation / collection. Of course as a member of the European Union dispatches from within the European Union to the Netherlands will not be subject to customs clearance.

For both the Dutch and Belgian markets, there is a €150 threshold8 above which consumers are expected to pay duties. VAT registered businesses based in another EU state, selling goods online to Dutch consumers, must register in the Netherlands for VAT when those sales exceed €100,000 per annum. Because the rules around duties are complex, particularly around di erent product categories, the Dutch customs authorities provide guidance for consumers which is also indicative for businesses. For example, for consignments up to €22, consumers aren’t liable for either VAT or duties when purchasing online from a non-EU business. Between €22 and €150, VAT becomes due but duties aren’t applied. Over €150 and both VAT and duties become chargeable. Alcohol, perfumes and toilet waters attract excise duty at any value. VAT in the Netherlands for most consumer products is at the standard rate of 21%. Duties however are much more varied. For example, footwear varies between 3.5% and 17%, depending on its constituent parts.

Delivery Times

The speed of delivery available from a retailer is important to consumers when they are making the decision to shop with them. 43% of Dutch consumers consumers consider it important that a maximum 3-day delivery option should be on o er 13.

Dutch shoppers have a higher than normal expectation for fast delivery with 32% expecting delivery in 1 to 2 days and 57% in 3 to 5 days 14.

The Dutch requirement is confirmed by independent surveys: » A DHL Global study in 2013 showed that the maximum acceptable delivery time for Dutch shoppers is less than 5 days, one of the shortest delivery window expectations in Europe 15. » A UPS study showed that against a European average score of 15%, 18% of Dutch consumers ranked delivery speed as the most important consideration when selecting a retailer to shop with 16

The UPS study also confirms that the majority of Dutch consumers (76%) expect next day delivery as the norm from local retailers, compared with an average 38% of shoppers in the other European countries surveyed where a 2-day delivery is acceptable (60%).