The retail market has changed dramatically in recent years. For many people, much of their shopping is done online, as groceries, clothes and all manner of goods are delivered directly to homes. But what does this mean for high street retailers? Is it all doom and gloom? We find out from Fredrik Uhrbom, Head of Clas Ohlson’s Swedish operations.
Clas Ohlson is one of the best known and most liked brands in Sweden. This is a great position to be in, but we have to work hard to keep it. Our business model has always revolved around helping people to solve their everyday practical problems, with smart simple and practical solutions. And until recently, this was done through products – but that’s changed.
We are currently transforming from a product retailer that offers rational benefits to a product/service provider that offers emotional benefits. This creates greater customer loyalty which leads to less reliance on price sensitive customers. Any large retailer that wants to successfully make such a shift, has to embrace digital and be prepared to invest and transition with the changing landscape of the retail market. And for those that don’t want to change they need to be aware that there is a line of companies behind them that will.
Acknowledge your colleagues and your competitors
And it’s not the companies that you might expect it to be. What was previously considered a competitor on the high street is considered more like a branch colleague today. They are no longer your biggest threat, it’s the known and in some cases the unknown online providers that quickly gain market share that you have to be most wary off. They could be Swedish or international, either way, they don’t have the same overheads, and can therefore squeeze margins. But at the same time, they can’t offer the same types of service, which is what we have to exploit.
Get to know your customers
But how does one do that? Well, you need to know your customers, and by that, I mean meet them, speak to them and observe them, as we did when developing our latest digital products and services. Before the launch of our smart home solution Clas Ohlson Home we visited the tech savvy and the not so tech savvy to figure out how we could provide a simple solution that would provide real value to customers. And we have a broad customer base – anybody that lives in a home is a potential Clas Ohlson customer, and in Sweden there are 4.2 million homes. Almost every time you observe somebody in their home, you’ll be surprised by how they act. And when you ask a question, most of the time you’ll be surprised by their answer. Basically, the insights you get from observing your customers close up are invaluable. Any other data you have on their behaviour is also extremely valuable. We’re lucky enough to have 2.5 million people in our customer club, which gives us access to well-balanced statistics.
Providing for different market segments
A market of 4.2 million people – and that’s just in Sweden, we’re also active in Norway, Finland, Germany and the UK – needs segmenting. From the broadest perspective, we group our customers into:
People looking for products
People looking for products and advise
People who want a full-service offering, i.e., a problem solved rather than a product to solve a problem
To cater for the last group, we recently launched Clas Fixaren. It’s a new service where people can book a professional tradesman to come and fix or complete those everyday jobs that they never get around to doing. Things like fixing a leaky tap, hanging a curtain rail or changing a wall socket. By offering these services we are meeting customer needs and connecting with them in a completely different way. The service is driven through a new app for iOS and Android, which connects with our backend systems to deliver a great user experience. My goal was always that it should be as simple as booking a seat on a flight, and considering everything involved – from booking a time, to quoting and invoicing, to understanding the individual customer requirements – I think we’ve succeeded pretty well.
Launching something like this in a large organisation isn’t always simple. You have to break with some norms to get inertia and avoid administrative blockages. Creating start-ups within your organisation is a great way to launch quickly. But make sure core members of your team are dedicated to the project and are not constantly being dragged into other corporate projects. That’s not to say expertise from the company can’t be drafted into your project from time to time as needed. The experience of your co-workers will be invaluable. You should embrace the start-up culture too. Launch quickly and often, prototype and test regularly, fail fast and learn from mistakes. Your customers will thank you for it later by using your product.
New partnerships equal new opportunities
As well as new products and services there are other ways to change. Look for new partnerships and collaborations with companies that offer benefits for all parties. We’ve started working with MatHem, one of Sweden’s largest web-based grocery stores. They visit thousands of homes daily and now offer their customers our products – we sell more they sell more. A few years ago, we wouldn’t even have considered such a collaboration, but the new rules of the market have led to a rethink and it’s turning out to be a very successful partnership. We’ve also brought in new product suppliers and started working with new digital companies, such as Daresay, that have helped us produce seamless digital services that customer want.
At the end of the day, you have to keep searching for gaps in the market. And once you find them you have to take risks to exploit them – which is what we did with Clas Fixaren. Mistakes will be made; you just have to learn from them and move on. So far, our digital ventures have proved very successful, but that’s because we have been extremely customercentric. If you take calculated risks and develop the right product at the right time you will be rewarded. The Clas Ohlson Home has sold way beyond expectations and received two Red Dot Design Awards and Clas Fixaren, is now becoming popular in the regions it has been launched.