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Latest Benchmark on Nordic Omni-Channel Retailing

This is an archived post from OrderDynamics, now Tecsys retail division.
Latest Benchmark on Nordic Omni-Channel Retailing This year’s annual Nordic Benchmark report, "The Digital Powerhouse," was recently released. The research asked omni-channel, ecommerce, and mobile commerce focused questions of 100 retail executives across Sweden, Denmark, Norway, Finland, Iceland, UK, and Germany. It raises important questions for retailing executives, when it comes to Nordic omni-channel retailing. But even other regions face many similar questions regarding their own omni-channel strategies.

A healthy number of executives feel their business is keeping up with omni-channel retailing changes. But, have retailers changed their internal structures to reflect this? Is omni-channel only a customer facing objective? Or does it require a unifying structure within the retail sales organization? Are price differences across channels a good practice? Additionally, does mobile commerce really drive sales, or is it more of an attention-grabbing headline?

Omni-Channel in the Nordics, Today

51% of Nordic retailers state they are on par with the competition with respect to their omni-channel operations. An additional 6% of executives feel confident that they are ahead of the competitors in Nordic omni-channel retailing. Altogether, 57% of executives feel that they are on par, or ahead of the game. This is a solid indicator that omni-channel retailing is top of mind, and a key strategy retailers are pursuing. As Peter Hvidberg, head of eCommerce and Customer Service, Intersport Group Denmark states “this is a good representation of the competitiveness in the region.”    

Integrated Teams

To make omni-channel retail a true success, you must evaluate the engagement of your teams. Are they collaborating across channels? Are you aligning your promotions? Is one selling channel supportive of the other? After all, from a customer’s perspective, there are no channels. Consumers only care that they are able to get the products they want, as fast as they can get it, at a reasonable price (value). All this in a buying journey that is not interrupted due to the retailer’s business structure. Shoppers want a seamless path to buying their product regardless of where or how they choose to purchase. To them a retailer’s brand is the key relationship holder. A consumer wants to know they are purchasing from IKEA for example. They don't care that it is technically from IKEA online versus IKEA in-store. As such, a deeply important question emerges from this year's research. Between online, in-store and mobile retail, are the teams separate or or working together? Here, 61% of retail executives admit that in their respective organizations, these are separate teams for online, in-store and mobile retail. Having technical and operational divisions and specializations, is understandable. It drives greater focus, and efficiency. However, separated retail teams can also drive disconnect, and internal competition that sometimes becomes visible to the consumer. These are not good effects. Retailers need to put a greater focus on integrating teams, sharing common goals, and training front-line associates on how to help customers with any and all purchasing channels.

Separated = Challenge

One of the greatest challenges in separating retail teams by channel is that one group is not compensated or incented for sales that go to another channel. If your in-store associates are ONLY compensated for sales made by consumers in the store, then they will not want to help customers with click and collect orders, pickups, or stepping them through an online order at an in-store kiosk. That is bad for business, and for the retail brand image. Check out one of our previous post with personal experience about what in-store associates need for success.

Channel Based Pricing

Another particularly interesting and telling finding in this Nordic Omni-channel retailing research is the question about pricing consistency across channels. Over 42% of Nordic retail executives admitted that their pricing varied by channel. Although this could be a smart profit maximizing strategy, it may have a harmful effect on the retail brand in customer’s minds. As Nordic consumers become savvier to omni-channel purchasing, they will quickly notice pricing differences between merchandise purchased using a mobile, online and in-store method. Let’s face it, as consumers ourselves, we all price compare and price shop – sometimes. So, continuing to have price differences depending on the channel can be a risky strategy.

Mobile Commerce Growing

Residents in the Nordics have long been the early adopters and prolific users of mobile technologies. As such, 69% of retailers register that between 11% - 25% of their eCommerce sales occur on mobile devices. Hvidberg adds that for Intersport Group “the amount of mobile users is actually increasing and right now we are experiencing 40% - 50% of sales on mobile.” Not only is it important that retailers make sure their online commerce is optimized for mobile shopping, but to also realize that mobile gives shoppers more information right in your store. IndustryDive states that “Nearly 60% of shoppers look up product information and prices while using their mobile phones in stores”. For this growing group of customers, mobile shopping has to be a very positive, smooth experience. Increasingly, consumers just won’t spend time on sites that are not optimized for mobile devices. The other important point goes back to the earlier observation about disparate pricing across channels. With so many shoppers using mobile to price compare while in your store, do you want them to find out that it is cheaper to buy from your online store, than from your physical store? Will this discovery by your consumers inspire them to avoid coming into your physical store locations? Alternatively, can you use this strategically, to lock in sales on mobile and eCommerce – and drive in-store pickups (click & collect)?

The Digital Power House Report

Altogether, the eTail Nordics Benchmark Report is a great revelation about how Nordic omni-channel retailing is progressing. The study results raise important questions with which retail executives are grappling. How much focus should there be on mobile commerce? Should channel pricing align with one another? Does it matter? What impact will it have on the bottom line, and on my retail brand’s reputation? How about the channel structure within my organization? All these questions are challenging ones to answer and will vary by retailer. However, the benchmark report sheds some light on how the industry is handling these issues. Omni-channel retail in the Nordic region is progressing well, albeit with the need for further fine tuning of the model, and refinement with many retailers.

Stay Tuned

Stay tuned for another report specifically on the Nordic region, to be published in September – October 2017, called the OrderDynamics Omni-1000. It will look at retailers in the region, with a specific focus on click & collect capabilities, and general Nordic Omni-channel Retailing.   Author: Charles Dimov is Director of Marketing at OrderDynamics. Charles has 21+ years experience in Marketing, Sales and Management across various IT and Technology businesses. Previous roles include Chief of Staff, Director Product Marketing, and Director Sales. Charles has held roles in brand name firms like IBM, Ericsson, HP, ADP, and OrderDynamics.     Related:   
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