PostNord Retail Day began with the presentation of the report E-barometern for Q2 2024. On the whole, e-commerce is increasing by 3% in Sweden. The pharmacy industry once again accounted for the largest growth of a impressive 20%, while the construction trade decreased by 7% during the second quarter. Clothes and shoes have a positive development of 6%, with price increases accounting for part of this. Grocery trade also increased this quarter by 5%.
The theme of the report is the customer journey with a focus on deliveries, returns and payments. 59% say that the most important thing in the delivery experience is being able to choose the delivery method. Parcel boxes are on the rise and some are even willing to pay extra for that convenience. 83% of consumers followed their latest e-commerce delivery where the younger generation is driving. Ideally, you want to follow the delivery in a delivery app. Swish is increasing as a payment option and is the third most popular, close to overtaking debit or credit cards in terms of consumer preference.
Households now view the economy more positively going forward with interest rate cuts and lower inflation. The global situation remains unstable and the search for low prices continues to be important. It is becoming increasingly important to have a dialogue with the customer and listen to understand what influences the new buying behaviors we see.
What happens to consumers when the economy changes?
Erik Modig, doctor and researcher at the Stockholm School of Economics, had a session on what happens to consumers when the economy changes. He talked about consumers going through different phases that can be good to keep in mind when analyzing and adapting your marketing strategies.
- Phase 1 – During recession. Customers are more price sensitive during a recession. It can both mean that you stop buying certain products and that you look at cheaper alternatives. What has actually happened in terms of price focus? What is driven by the consumer and what is driven by the companies? The consumer abandons and questions habits, they focus a lot on the here and now. But keep in mind that they are not only abandoning you, there are also customers to find who have abandoned other brands. Recession can also lead to more online shopping.
- Phase 2 – The transition from recession to normality. New habits and buying behaviors are questioned here. Some will remain in the behavior they created during the recession, while some will return to the way they consumed before the recession. Here one might reason about quality differences in products and the value. A strategic question to ask yourself as a trader is what do you make the most money on? You may actually want customers to buy the cheaper option. Here the brands have to do the work and show what they want the customers to do.
- Phase 3 – Back to normal. Consumers are returning to more emotionally driven shopping. You want to be inspired more, you want to treat yourself and feel a little more luxurious. Here, it is important for retailers to switch from a product and price focus to a focus on feeling and brand. Here, consumers can dare to dream a little more. A key in this phase for e-tailers is to inspire purchase. How can we work away from price focus? Create exclusivity without price focus, that is where you can build margins.
Erik advises to use social proof, here we can show consumers who do exactly what we want during the different phases. When it comes to communicating feelings, the easiest and most effective way is to show people who feel the current feeling. Preferably customers who show an emotion when buying or consuming.
The path to profitable circular trade
Houdini has worked for many years with services to increase the lifespan of garments by, among other things, renting out, offering subscriptions, second hand and repairing products. The basis is to start by designing products that can have a long life so that they can be used circularly. Houdini Circle is a hub in Stockholm where all services have been gathered under one roof. Malva Carlsson, Regeneration Lead at Houdini Sportswear, recommends looking at the customer journey from a longer perspective.
The industry organization Hållbar E-handels working group recommerce is developing a common language for used goods online so that it becomes easier to understand the condition of an item for both sellers and buyers. Condition grading is available so far for home electronics and the work also continues for the clothing and furniture trade.
Close the security gaps before the cyber attack
Cyber threats are a major business risk for many companies. Right now, the amount of intrusions is decreasing and it is the first time in many years. Successful efforts have been made to access the infrastructure that enables cyber attacks. But there are still many who try to deceive companies with various forms of fraud. Different ways of contacting people to commit intrusions can be phishing – you email, chat or use the internet, vishing – you call or smishing – you send an SMS. Alternatively, you can go through security hatches.
The panel consisting of Jan Olsson, Criminal Commissioner, Alexis Larsson, Head of Security at PostNord and Petter Fahlström, COO at Truesec, share their best security tips:
- Patch environments. Make sure to get rid of all vulnerabilities. Do this quickly, it won't take many days for someone to figure out what the vulnerability is and try to exploit it using the information.
- Protect the digital identity. Make sure to use complex passwords and not to use the same password in multiple places. Enable multi-factor authentication.
- Healthy suspicion. Traders need to make an assessment, it is not reasonable to send 10 mobile phones to a summer cottage address. Make sure you are doing business with the right person.
- Check backups. Practice restoring from backup so that you ensure that it works as you intended once the situation is sharp. How often are backups taken? There needs to be updated information if the backup is to be useful.
- Forgiving and permissive culture. Attract your employees to tell you about something that has happened, it is important to know about something that has happened in order to act on it. Few report fraud, it is necessary for more to report in order to create budgets and space to work more preventively from different parts of society.
The vast majority who listened believe in approx. 5% increase for e-commerce in 2024, we will see how the development will be when PostNord Retail Day returns in February 2025.
