In the Nordic market, there are approximately 19 million potential customers. Although many people describe Norwegian consumers as conservative and old-fashioned, the use of e-commerce is increasing considerably. What do we spend the most money on? And are we shopping online?
The Norwegian consumers started early with the use of Autogiro, eInvoices and e-commerce services. The use of the internet is very high across the population, also among the oldest part of the population. The elderly have challenges with the use of online services and technology where the usage pattern is different from using a web browser, for example, reading online newspaper articles, checking emails, using BankID, installing software, anti-virus solutions and the like.
Our hypothesis is that it is not only the elderly who find it demanding with IT-related challenges. This is one thing we must think about and bear in mind regarding online shopping.
Are you able to keep up?
Nets writes that e-commerce in Norway increased by 17 % when compared with figures from 2017. In theory, this means that if your company does not have an increase of more than 10-15 % in e-commerce, you will soon be lagging from the competition. There are, of course, differences between industries, and there is a difference between B2B- and B2C online shopping. These differences between industries and customer groups will gradually be erased.
According to Postnord, we buy on average four times more per month in 2018 when we compare with a similar survey from 2008. They estimate that a Norwegian spends around 20,000 a year on e-commerce.
What do we spend the most money on, and do we buy this online?
FOOD SERVICES: In the survey for Nets in 2018, we read that 10 % of Norwegians have subscribed to food services. The way this question is asked gives a lot of room for misinterpretation. The fact that a consumer has subscribed to food does not mean that this is how they shop food.
Players such as Adams Matkasse, Kolonial.no and others who have specialized in food have not been very successful. The food industry is adapted to constant repetitive purchases, relatively low margins and great demands for both distribution and handling of the goods.
We know that Norwegians shop on average four times a week, and there is a big difference between grocery shopping on weekdays, on weekends, and shopping for special occasions. Although several of the chains have e-commerce solutions, it is important to make these even simpler. We also need help to plan and cook the food. I do not necessarily mean that Hellstrøm comes to your home and makes quail omelette with truffle oil, but that recipes are easy to understand, and to be able to cook without having gone four years to cooking school in Paris.
The largest online revenue is from travel. It's become nearly impossible to call to book tickets, and many use apps such as Vy and Ruter when using public transport. Additionally, we book hotels, flights and holiday trips online.
Thousands of Norwegians pay money to be on the list to buy the latest electric cars, while the old diesel cars are bought by Nettbil and sold through over 800 car dealers across the country. When we park the car, we pay through the app to the parking companies or the municipality.
BEAUTY PRODUCTS: 15 % of Nets’ respondents state that they have purchased beauty products online as a subscriber. We use makeup, beard products, shavers and shampoo every single day, why shouldn't it just appear when the supplier knows you're most likely empty? Three out of ten Nordic customers say that they can be comfortable with artificial intelligence ordering consumables on their behalf (Postnord).
ENTERTAINMENT: When we want to be entertained, we use streaming services for music and web. There are only a few who buy physical products, because there is so much to see and hear that the neighbor no longer impressed by how many CDs you have from the 80s. Our kids don't know what a CD player is. How many people watch "regular TV"?
CLOTHING: Shopping clothes online is a more differentiated subject, there is a big difference between a person with a "normal body" who buys the same garments from all the same-sized manufacturers where everything fits, and those who are slightly different. Within this market there is a desire for both "click and retrieve" solutions and the opportunity to try on garments and send back the ones that do not fit.
Up to 70% of these types of orders are returned, which is one of the reasons Zalando has changed practices recently. Reversed logistics costs money, and it requires many routines to check that the products are not used and that they can be resold. Often the packaging must be replaced, otherwise the item must be sold at the outlet. The legislation also gives the opportunity for returns without having to justify them. It can be that the customer was irrational at the time of ordering. According to Postnord, 15 % of Norwegians in their survey returned products in the last month.
It also turns out that those who return goods also shop online more than the average. This is important to keep in mind.
E-commerce and behavior-based marketing
A challenge for companies selling products that last for a while is the frequency of purchases. If your customer buys a large piece of furniture or a home appliance, there is a high probability that the customer will not be buying that exact product for the next 3-5 years. Then you must think of something clever to make sure the customer returns to your online store the next time they are going to shop.
Here comes the combination of e-commerce and behavior-based marketing. You need to use smart solutions to know what your customer is most likely to want to buy next time. This should be based on a mix of customer behavior in your channels as well as patterns throughout the customer base. Each customer expects that they will receive marketing tailored to their needs in the future, unless they do not bother subscribing to your newsletter or joining the loyalty club.
Feel free to contact us to find out how your business can succeed better with e-commerce:
Jens Fossum, Sales and Marketing Manager
Mobil: +47 470 34 200
Nets – report on Nordic eCommerce 2018
Postnord – eCommerce Report 2018
Sifo – rapport om «Eldres bruk av digitale verktøy og internett: En landsdekkende undersøkelse av mestring, støttebehov, motivasjon og hindringer» fra 2014