Jakub JirsÃ¡k - stock.adobe.com
E-commerce has evolved over the past year as lockdown life has made online transactions a necessity rather than a choice, but much of the conversation has revolved around the sheer extent and proliferation of online purchases, rather than the nuanced ways that brands have had to evolve to cope with this trend.
Amid this environment, a host of Nordic tech startups are driving change in the retail landscape.
It’s not just the deluge of orders being made online that has proved challenging for retailers over the past 12 months – it’s the expected sustainability of this transition. Many consumers who would previously have been resistant to e-commerce will now be proficient and comfortable with this quick, intuitive and agile way of purchasing.
Retailers have therefore been forced – almost overnight – to reassess their models, capabilities and supply chains to prepare for a much longer-term new norm.
It is a transition that many Nordic startups foresaw long before Covid-19. Gothenburg-based company Touchtech has been transforming retailers’ “customer journeys” since 2008 via its Touchtech Vendo and Touchtech Showroom solutions, which enable customers and brands to access pertinent product data in a dedicated digital environment.
Deniz Chaban, CEO of the company, explained how the sector dynamic has changed since March 2020: “The overall decline of face-to-face sales means the existing business model for bricks-and-mortar retailers is no longer profitable or viable, and retailers will have to move away from using physical stores as hubs for stock and distribution, and instead deliver a brand and buying experience.
“We know from the fashion brands using our tech that many retailers are already planning on entirely rethinking the presence of physical products in their stores by retaining more stock in warehouses and fulfilling orders digitally. When you consider the ongoing e-commerce sales boom, this makes total sense.”
In partnership with Stockholm Fashion District, Touchtech is launching its new Digital Venue platform in reaction to this shift, digitising the presentation and demonstration of physical products to save transportation of goods and samples.
In this respect, fashion is perhaps one of the most poignant examples of retail undergoing a transformation. In “ordinary” times, it’s a segment of shopping that often calls for face-to-face interaction, to gauge sizes, styles and suitability.
With none of those pointers to inform purchases, it has put huge pressure on the notion of returns. People are shopping to relieve boredom or to lighten their daily moods, but certainly don’t want to be locked into acquiring items that aren’t quite as good as they seemed on the laptop.
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Enter Returnado, a Swedish startup providing cloud-based software to retailers, which streamlines the returns process. By partnering with retail brands around the world, the whole process is handled on both sides, making it a more seamless experience for consumers, so that a return is more likely to yield a replacement purchase, rather than a request for a refund.
“This kind of approach is so important at the moment, as it also helps to build brand loyalty,” said Returnado’s CEO and founder, Haider Abdo. “Even before the pandemic, nobody was really looking at how to make returns more of an enjoyable or even valuable experience. But since lockdown, people may well choose whether they continue to use a brand, or not, based on how easy it is to send items back.
“From our perspective, we saw a space of e-commerce that was already growing quickly, and a problem that accounts for 25-50% of companies’ entire business, but barely any focus on it.”
This focus has transformed “returns” into “reconversion” opportunities for the retail sector, as they suddenly explore an additional revenue opportunity among consumers who would previously have detached themselves from that initial transaction.
It is this idea of value-add that Nordic startups seem to be tapping into during this period. Budbee is a Swedish tech company that has looked to solve the “last-mile delivery” challenge through a purpose-built, consumer-focused delivery platform that is used by ASOS, Zalando, H&M and numerous small and medium-sized enterprises.
The app provides flexibility in how, when and where parcels are delivered – another critical, yet previously under-explored portion of the e-commerce experience that has become so important over the past year.
“Since the start of the pandemic, a lot of companies have made it a priority to give power back to consumers, who feel they should have absolute control over their delivery options,” said Budbee’s chief marketing officer, Simon Strindberg.
“While there has always been consumer power in retail, in the world of e-commerce, developments that would have usually taken years have happened in the course of months. And I’m really proud of the level of innovation coming from the Nordics to capitalise on this opportunity.”
Keeping ahead of globalisation
But what is it about the Nordics that yields this level of foresight, and such quick reactions to drastic market shifts?
According to Henrik Müller-Hansen, CEO at Norwegian production-on-demand platform Gelato, a lot of it stems from an initial ambition to solve broader global challenges, and not to restrict sector reach in an era of globalisation. Gelato enables online sellers to produce their products locally to the end customer, reducing carbon emissions and waste and making it a faster and more sustainable option.
Among Gelato’s clients are global e-commerce entrepreneurs, with each realising the value in connecting with professional print and production houses, and billing and logistics companies around the world, so as to manage the sale and delivery of their customised products more immediately, sustainably and cost-effectively.
From the outset, there was a realisation that both the need and the market were global, while the local consumer base would not be big enough to sustain significant development. This broad outlook and research ensured a similarly comprehensive solution that would scale.
Müller-Hansen explained: “Nordic startups have to be quite nomadic in their planning and intentions, starting from quite a small ecosystem. But this allows us to identify pain points on a wider scale, which leads to products that immediately and purposely are not restricted by geographic location.”
In essence, by having a global outlook, these innovators are able to create solutions that keep ahead of retail trends that are impacted by globalisation – namely, aspects such as returns, delivery and distribution, or brands’ own international expansions.
“Ultimately, I think Nordic startups have been great at building tech solutions that are both agile and responsive to changing consumer demand,” said Müller-Hansen. “So, even at a time when that demand has evolved so quickly and drastically, we already had the tools to give brands around the world a chance to keep up.”