Kogan.com: Driving efficiency with unified payments

Listed on the ASX in 2016, Kogan is Australia’s number one purely online retailer and it has improved the experience for its customers by connecting Kogan.com’s world class proprietary cart technology at the front-end to Adyen’s world class payment stack at the back-end. The result has been a more standardised and streamlined experience for Kogan.com’s customers across its various web properties, thanks to the ability to more quickly add new payment methods and adopt other payments innovations for the benefit of Kogan.com’s customers. With more than 3 million active customers, Kogan.com’s popularity continues to rise. Compared to the corresponding prior period, H1FY21 Gross Sales grew by more than 96%, while EBITDA grew by more than 140%.

Kogan.com’s portfolio of retail and services businesses includes retail (the Kogan.com and DickSmith.com.au retail websites), marketplace, mobile, internet, insurance, travel and furniture business Matt Blatt. The Kogan.com brand is renowned for price leadership through digital efficiency. By keeping business processes lean, it offers shoppers the best value and helps maximise customer savings.

Managing the large Kogan.com portfolio is an opportunity to add to this efficiency. The myriad ofpayment systemsat the backend of its six websites and two apps meant considerable resources could be required to deal with the different systems. Kogan.com has improved the experience for its customers by connecting Kogan.com’s world class proprietary cart technology at the front-end to Adyen’s world class payment stack at the back-end. The result has been a more standardised and streamlined experience for Kogan.com’s customers across its various web properties, thanks to the ability to more quickly add new payment methods and adopt other payments innovations for the benefit of Kogan.com’s customers

Needing to improve and streamline its payment processes, Kogan.com turned to Adyen in 2016 to integrate reporting and revenue collection to replace a myriad of payment systems across its four websites and two apps. Adyen’s full payment stack allowed Kogan.com to rapidly combine the various systems and be ready to serve customers quickly with no operational downtime.

Switching to Adyen’s single stack platform has yielded numerous benefits that translate into a better customer experience, more payments choices for Kogan.com customers, as well other operational efficiencies for Kogan.com.

For example, by leveraging Adyen’s local acquiring capabilities in Australia and New Zealand, Kogan.com was able to connect directly to all major card schemes, get a strong understanding of payment performance and create tailored risk profiles to specifically address fraud where it arose.

“Having one platform has been extremely effective. Adyen offers acquiring, risk management and gateway services, meaning we leverage a full payment solution as opposed to having one piece of software to process transactions and then having to manage multiple payment providers,” Beahan says.

Adyen’s risk management tool, RevenueProtect, which includes Dynamic 3DS2 (an authentication solution), allowed Kogan.com to easily protect itself from unauthorised payments while ensuring both compliance with regulation and a frictionless user experience.

“The simplicity that Adyen’s platform enables is the biggest thing. It’s saving us a fortune by saving us time and keeping our user experience consistent as we move to 3DS2,” Beahan adds.

In 2019, Adyen added an “experiment” feature to its RevenueProtect solution. Leveraging retail concepts like A/B testing, the feature allowed Kogan.com to leverage the power of payment data provided to them by Adyen. By collating the data in a single place and enabling unprecedented merchant access, Adyen allows Kogan.com to experiment with various factors to test, learn, and optimize its payment flow.

“We’ve had huge victories and Adyen has been excellent to work with. They proactively contact us with ideas on how to manage customer experience while improving authorisation and conversion rates,” Beahan says.

Ultimately, this means it’s easier than ever for customers to place orders seamlessly in their preferred way.

Network Token Optimization is one of Adyen’s RevenueAccelerate features that helps drive increases in authorization rates for Card On File transactions. Unlike regular card tokens, Network Tokens are provisioned by the card schemes and help avoid churn because they never expire.

Adyen’s Network Token Optimization relies on machine learning to ensure that network tokens are only used when they improve authorization performance. The feature requires no integration effort, and with greater issuer trust and real-time updates, boosts approval rates.

Kogan and Adyen piloted Network Tokenisation Optimization across Kogan and Dick Smith Australia and New Zealand, as well as Kogan Mobile New Zealand from mid July to the end of August.

“Prior to Adyen, trying to do simple things like searching for a transaction from months ago would cause the system to go into meltdown. Now all of our brands are searchable under one combined system and we get results almost instantaneously,” Beahan says.

With Adyen’s custom dashboard, each Kogan.com team member can quickly access specific information that’s relevant to them. "We assessed a range of different payment providers and found that while some of the functionalities were similar, Adyen's dashboard provided exactly what we wanted. It was simple to use, while providing sophisticated insights,” he adds.

Adyen is helping Kogan.com keep processes lean in order to continue delivering low prices for its customers.

“I’m also impressed with our dedicated Adyen account manager. In addition to our account performance reviews, we have regular catch-ups and we’re constantly being sent useful information on platform updates and business insights,” he says.

“Adyen regularly shares ideas on how we can improve business and how we can reduce costs to maximise customer savings. We appreciate this attention to detail, and it’s important that we work with a payments partner who believes in and supports what we do,” Beahan says.

Kogan.com is keen to build upon its Adyen relationship. It has been able to explore ways of delivering more convenience and personalisation, particularly for international customers who expect local payment options.

“There’s a whole untapped market of customers who have their preferred payment options. At the flip of a switch we could enable Alipay, UnionPay or WeChat Pay. It’s all built into the Adyen platform and requires minimal effort,” Beahan says.