e recently announced the launch of our newest venture, an commerce incubator based in Tenerife, Spain. This is a project we’ve been working on for some time time now, and we’re very excited to finally be able bring this to the wider business community.
To help our clients gain a better understanding of the program, we sat down for a chat with our CEO Joni Kautto to get his take on what the incubator is all about.
Joni, you have said the goal of the incubator is to focus on international commerce? Could you tell us more about that?
The main idea of the incubator is to work with companies that are looking to operate internationally, especially in Europe, Middle East or East Asia. Companies may be based in Scandinavia or the Baltics, for example, but the location isn’t really important. What’s important is that they have a desire to grow their sales and expand to new markets. The incubator has been set up to provide lifestyle businesses with a partnership where they can benefit from Accolade’s experience in international ecommerce.
We’re a relatively small company and a young company, but we’ve already had the opportunity to work with some very exciting clients and have helped our clients break into new markets not just across Scandinavia, but also in East Asia and China.
What are some of the challenges facing online merchants today, and how can the Incubator help them?
For one thing, the competition in eCommerce, including the lifestyle sector that we specialise in, gets fiercer every year, and this makes it harder for small businesses that are just starting out to achieve significant market or vertical position. Even if you’ve already established a customer base in one niche or a geographic region, businesses may lack the resources to expand their operations to new markets.
We can provide a number of ready-made solutions for clients so they can test their ideas in different markets without huge investments in infrastructure. In addition, we have a culture of innovation where we continually push for cutting edge solutions in our shops to grow sales.
You mentioned that you specialise in lifestyle commerce. Can you expand on this? What is lifestyle commerce?
Good question. Ecommerce is only one part, even though it’s an important part, of the equation when it comes to lifestyle commerce. We specialise in building lifestyle brands, and that means not only focusing on the products themselves, but also providing a number of services that complement the products.
In other words, we’re not just an ecommerce agency. At Accolade, content production for lifestyle brands is one of the core functions. We are specialised in helping on service offering, even as far as providing travel and hospitality permissions. Accolade’s subsidiary is, for example, a registered IATA travel agent, which means that we can provide a number of additional services from booking systems to selling trips and activities for partner companies. For resorts, we can provide advertising directly to customers in places like China, and we also create custom booking systems for hotels and activity providers. There are so many examples.
Actually, what sets us apart from our competitors is that we’re not just an ecommerce agency in the traditional sense. We’re more of a lifestyle incubator, creating opportunities for lifestyle oriented businesses to optimise the whole customer journey, not just in terms of ecommerce, but across the whole range of services they offer.
In that sense, lifestyle commerce could really be defined as selling experiences, that include the whole lifestyle brand portfolio from products to services, and this is what gives your business a competitive advantage against giants like Amazon, which mainly focus on product sales.
Could you tell us more about some of the tools and solutions you utilise?
Of course, designing and providing services is a big part of what we do at Accolade, and the incubator will also focus on service design as a growth driver. This is even more relevant as digital transformation is changing traditional ways of providing services.
The Incubator program also involves Accolade’s partnership with commerce tools and services providers, including Custobar, Glome, Bttn, Emarsys, Bazaarvoice, Feedbackly, SEMrush etc.
Commerce service design sounds like an intriguing concept. Could you give us an example?
There’s a great deal of talk about customer journeys, for example. However, even though you may be able to map your customer touch points and blueprint your business, the real challenge for growing businesses is the lack of resources to analyse, test, optimise and scale.
However, we’re not just interested in giving merchants the whole infrastructure – both physical and technological – but also helping small merchants with any other challenges they might be having, such as creating great content to build their brand. Our content team is built around the needs of lifestyle businesses and includes copywriters as well as photo and video production teams that are out in the sea, on the beach and in the forests and mountains every day. Our teams are producing content, such as product photos, product videos, reviews and YouTube advertisements for online stores.
China presents a huge ecommerce opportunity, but it’s also a very difficult market to crack. What are some of the entry barriers? What methods have you employed to succeed?
In China, both lifestyle and ecommerce landscapes are still growing at a fast rate, but common challenges, from trademark registrations to hosting ecommerce services, inside “The Great Firewall of China” are just some of the basic issues. However, the initial steps to test the demand for a particular product vertical in China are relatively easy, such as using similar Social Listening techniques that we already use for European markets.
And you have Chinese speaking teams as well?
That’s correct. China has been and continues to be a major focus for us. This is why Accolade has Social Media, Translations and Customer Service teams focused solely on China. We have expertise on Chinese social media sites such as Weibo and WeChat. You can see some examples of our China social media efforts with Xwander.
The eCommerce incubator is based in Tenerife. Will this impact the candidates in any way?
The location in Tenerife is actually ideal. We’re part of the Canary Islands Special Zone, which is a special tax zone that has been authorised by the European Commission (EC). Because of its great climate, Tenerife also provides the perfect environment for lifestyle-based content production all year round.
Is it necessary for candidates to relocate their businesses to Tenerife?
The incubatees don’t have to be physically based in Tenerife. Many of Accolade’s clients are located in Scandinavia and the Baltics, so the physical distance is not an issue at all and we work on daily basis with Slack and our project management stack. We work closely with a co-working space in Tenerife, so our incubatees have the option to visit us or relocate to Tenerife temporarily or longer term if and when needed. In the initial phase of the partnership, working in the same physical place is, of course, the most effective and preferable, and we normally do the kickoff workshops in Tenerife.
What are the requirements for candidates?
Candidates for the Incubator must go through a maturity audit process that evaluates the business plan, financing, leadership, market and competition. That might sound daunting, but this is mainly just to establish a dialogue between us, getting to know each other, finding out potential opportunities and how to grow together. Selected brands are responsible for driving execution, with close attention and assistance from Accolade’s operations and support teams.
And how can businesses apply to join the incubator?
The first step would be to get in contact with myself or Tan (COO Chin Tan Tung Fan). We’ll then arrange an informal discussion where we map out your business, your goals and your future plans.