The next wave in Finnish consumer business - how to win in 2020s?
There are 4 forces that currently drive consumer business and retail in Finland: ecommerce, mobile, omnichannel experience, and seasonality (high seasons). Let’s look at each of these forces.
In what follows, I draw heavily on Fedor Babkin’s excellent keynote in our recent #retailtechFI event (for more details, see below). Babkin works as an Industry Manager at Google. Custobar is a Google partner.
Ecommerce: major development potential
Even though over 80% of Finns shop online at least once this year, Finland is the least mature ecommerce market in the Nordic region. Finnish consumers make the most cross-border purchases out of all Nordic countries. This means less revenue for Finnish businesses.
The leading reasons behind cross-border digital purchases are
- lower prices
- products not available offline, in local stores
- larger selection of products
There are opportunities for growth here! Lower prices point to the opportunity for perception game.
Sniffie Software specializes in optimizing ecommerce pricing, which, according to them, “is neither hard nor complicated.” Price optimization does not automatically mean lower nor the lowest prices in the market. To survive and thrive in the global marketplace, consumer businesses need right pricing as well as meaningful marketing reminded Sniffie Software’s Tomi Grönfors.
If your customers go cross-border with their purchases because the product they are seeking is not available in local stores, this creates an obvious opportunity for domestic retailers and consumer industries. And if larger selection is the issue, ensure that you have online what you also have offline. Exceed your offline stock keeping units (SKUs) online only with specials.
Mobile: a key player in ecommerce
Mobile has taken a central role from consumer research to ecommerce and payment. Mobile payment usage increased 39% in 2018. 60% of all retail-related searches were done through mobile in 2018. The role of mobile is so prominent, that we will soon speak of M-commerce over e-commerce.
This has very clear ramifications for consumer businesses. Mobile first in website building and digital marketing is a given, a default. Babkin reminds us to work on speed and set Geo Tests to assess the power of mobile.
Omnichannel experience: making a difference
A Google case study states, that mobile users are 1.3 times more likely to buy offline after clicking an ad online. The ROPO effect (research online, purchase offline) is a well-known consumer phenomenon. Physical retail is still going strong, and as much as 50% of millennials actually prefer going to the brick-and-mortar stores at some point in their buying journey. It is the seamless customer experience, the online-offline-continuum, that it the key success factor. In fact, omnichannel customer behaviour drives revenue both off- and online.
Make sure that you have good O2O (online-to-offline) capabilities! Custobar can help you with the details and actions, since it is one of the only customer data platforms and marketing automation tools available that can access and utilize both online and offline customer data in real time.
Seasonal Events: stronger consumption spikes year after year
There are 100 million Google searches on retail categories during Black Friday weekend in Finland. Seasonal events pace customers’ lives so much so, that there is an average 30% uplift in retail-related YouTube searches during the Holiday season.
There are several critical points to be made here. First of all, do you own the seasonal events that matter to your business the most? Second of all, are your servers ready for these spikes of visitors on your mobile-first website and webshop? If your site is down during a big event, you lose in a way your business cannot afford.
In owning the seasonal events that matter to you, you need to recognise your audiences and anticipate their needs. You can even go beyond these expectations and hit the jackpot with a well-planned, well-timed, and well-executed flash sale. Mikko Rekola, a Growth hacker at Woolman, is your go-to-guy when it comes to flash sales. You can find out more, for instance, by reading Mikko’s post Flash sale! The online merchant’s life of Riley?
This blog post concludes our #retailtechFI series for now. The series is based on the presentations given in the event on changes in retail marketing, hosted by Custobar, Sniffie Software, Woolman and Google. The event took place in late August.
Our post Retail marketing is changing - are you keeping up? posed a few questions and comments, given by the audience, that we promised to cover in later posts. One was already addressed in our most recent #retailtechFI post, Create revenue with the effective use of multichannel customer data in 3 steps. Here are the rest of the questions and answers:
Q: How to recognize if a product’s overall market price is going down because of a competitor’s campaign or a glitch, or if there really is a genuine decline in a product’s value?
A: This is a good question. You need to understand who your real competitors are, and keep a close eye on the market situation as well as changes in pricing both daily and over time. There needs to be knowledge, insights, and real data.
Q: Are Flash Sales Guerilla marketing gone online/into ecommerce because of the advances in martech (marketing technology)?
A: You could say that, at least so far so that flash sales aim to use surprising and unconventional interactions to promote a product or a service. In other words, flash sales are more about promotion than discounts.
We will resume the #retailtechFI series after the next event, which will take place on November 21st. There we will take a look at the latest Slush innovations and their implications to martech and consumer business. Stay tuned!
Also, become part of the #retailtechFI conversion on LinkedIn and other social media channels.