Elgiganten thrive in challenging market conditions by adopting an omnichannel strategy

Electronics retailer Elgiganten respond to the demands of a highly competitive marketplace by adopting an omnichannel strategy that places customers at the heart of the brand’s operations.

GOALS
Be the most customer-oriented store chain
Optimise the customer journey for omnichannel
Maximise total sales, irrespective of channel
APPROACH
Implemented identical pricing in-store and online
Launched ‘Click and Collect’ service
Omnichannel approach for digital marketing with total sales as a main goal
RESULTS
+63% increase in store visits for Search campaigns year on year
Google Display Network campaign delivered 92x more store sales than online sales
+8.8% increase in total sales YoY growth, while local industry fell by -1.4%
Best Service Award from ServiceScore® in 2015 and 2016
Almost 90% NKI (Swedish Happy Customer Index) for two consecutive years
Think with Google: Elgiganten thrive by adopting an omnichannel strategy

Elgiganten was founded in Norway in 1962 (under the brand name Elkjøp), and since then has become one of the largest electronics retailers in the Nordics, selling both online and offline. In 1999 they became part of electronics retail giant Dixons Carphone, where they sit alongside brands such as Currys, PC World and Carphone Warehouse.

Electronics retail in Sweden

In Sweden, the brand is among the highest turnover retailers in the country, and has more than 160 warehouse stores and almost 3200 employees. Operating in a highly competitive marketplace where low margins and modest growth have driven many competitors out of business, the brand continues to thrive by offering customer-oriented service, low prices and some of the strongest customer performance in the industry. Elgiganten is now focused on maintaining their market-leading position by adopting customer centric business strategies and measuring their success in terms of customer loyalty and satisfaction.

Embracing Omnichannel

A key aspect of this strategy has been the launch of an omnichannel approach within the business, which involves treating the online and offline sales experiences as part of the same framework. Beginning in 2011 with the unification of ecommerce and store sales under a single sales function, Elgiganten have worked to create a seamless experience for customers, regardless of how they engage with the brand. By adopting tactics such as identical pricing across physical stores and online, click-and-collect delivery and detailed reporting across channels, the brand has gradually reinvented itself as an omnichannel business from the ground up.

“We see a close connection between online and our stores, where strong e-commerce provides strong sales in the stores,” says Niclas Eriksson, CEO of Elgiganten. “The e-commerce and physical department stores live in symbiosis, and we plan to keep improving our omnichannel offering by developing our ecommerce, offering more and better delivery options, and enhancing the skills and customer-focus of our employees.”

As of 2015, click-and-collect sales - where customers buy online and pick up their goods from warehouses - became part of the individual warehouse sales budgets, making store managers less inclined to perceive digital as a threat. By January 2017, 50% of all online orders were click-and-collect.

Omnichannel Marketing

With marketing a core business driver for Elgiganten, the company has worked closely with Google to shift their communication towards an omnichannel approach. “Our communication should be needs-oriented, relevant and effective.. We are shifting our media budget to channels where it’s most efficient”, says Johan Järnliden, Marketing and Digital Manager at Elgiganten.

Marketing messaging is crafted to represent the business as a whole, rather than focusing on individual channels, with campaigns active across Search, Display and YouTube. Reflecting their early grasp of the importance of omnichannel, Elgiganten were one of the first brands to adopt location extensions when they launched in Sweden back in 2012, and they continue to lead from the front by making use of new features such as store visits reporting as they become available. Store visits data has been particularly valuable, as evidenced in a  recent display campaign which promoted an exchange offer for old computers and laptops; the campaign drove 92x more in-store conversions than online, revealing a return-on-ad-spend of almost 3000%.

 

We see a direct correlation between our digital campaigns on Google media and our store traffic

Niko Niva, Digital Specialist, Elgiganten

“We see a direct correlation between our digital campaigns on Google media and our store traffic,” says Niko Niva, Digital Specialist at Elgiganten. “With store visits we are able to turn consumer insights into actions. We can see which products are more likely to drive people to the store rather than buying online, and how people who are close to a retail location and using a mobile device are more likely to visit the store. However, it’s hard to single out the incremental effect, as we’re active in other media channels at the same time. This is why we conduct media mix modeling to ensure we see the true return on ad spend we get from each marketing channel.”

During the first six months of 2017, Elgiganten’s Search campaigns have seen an increase in store visits of 63% compared to last year. Video campaigns are also contributing to store visits, with a store visit rate of 6-10% among users who view Elgiganten ads on YouTube. And with the extra insight into how mobile search traffic drives visits to Elgiganten stores, return on ad spend has been revealed to be 21% higher on mobile phones than on desktop.

Awards and Rewards

In 2016, Elgiganten’s market leadership was acknowledged when they were voted ‘Best Omnichannel Solution 2016’ at the EHI Retail Technology Awards in Düsseldorf, Germany. Their strategy has led to significant gains for the business, with improvements to the website reducing customer support query volume and speeding the time-to-market for new products by up to 60%.

The brand has also been voted #1 for customer service in Sweden for the second year in a row by a panel of 3000 Swedish consumers. The benefits are equally visible in Elgiganten’s commercial performance, with three consecutive years of 8.7% CAGR in turnover annual - outperforming the electronics retail sector which fell by -1.4% during the last 12 months.

"Our long-term focus on the customer is beginning to have an impact,” says Niclas Eriksson, “not least in customer satisfaction and other core brand measurements. Our multi-channel offer is a great advantage, providing accessibility and simplicity for customers to shop with us.”

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