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retail sector

Why Sweden’s Retail Sector is Captivating International Retailers

Sweden is considered as an ideal market by several international retailers, primarily due to factors including highly skilled labor force, sophisticated consumers, innovation and technological advancements, smooth business procedures, and stable economy of the country. Sweden has been consistently ranked as one of the most competitive, globalized, and productive countries in the world despite having a relatively smaller population. Furthermore, the country’s dominance in the Nordic marketplace raises the attractiveness of retail sector investments in Sweden. The country also has the highest retail sector attractiveness when it comes to establishing new business ventures, and international retailers continue to selectively expand in the Nordic region at a slightly faster rate when compared to Europe’s key cities at an aggregated level. Moreover, Sweden’s central location and strategic gateway to Northern Europe have also made it a convenient logistics hub and place for consolidated business operations.

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retail sector

Why is Sweden an ideal market for international retailers?

Strong retail sector growth

Fueled by steady population growth and rising disposable income, the Swedish retail sector has enjoyed consecutive growth over the past two decades. Growth in both private consumption and retail sales is stronger in Sweden than most of the European countries and is forecast to outperform most of these countries in the next few years. Swedish consumers have increased retail spending for more than a decade and retail sector sales account for nearly 40 percent of the total household expenditure.

Rising population

Sweden’s population is growing steadily, especially in the urban areas. Net immigration, increasing birth rates, and low mortality are key factors that are contributing to this growth. This trend of rising population is expected to continue in Sweden, creating a broader set of audience for the retail sector companies here to target and serve.

Growth of e-tail

Online sales account for a sizeable portion of the total retail sector sales. Items including consumer electronics, clothes, and books tops the list of most sold of items through e-tail. The consumers in Sweden also indulge in shopping from international sites, especially in the case of fashion items and accessories.

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Shopping tourism

The fashionable lifestyle and five-star culinary adventures are garnering the attention of travelers from around the globe to Sweden. Also, tourism is the fastest growing industry in Sweden. This has had a significant impact on retail sector and shopping culture in the region. Revenues from international visitors have doubled in the last five-years and visitor volumes have increased faster than the European average. This trend can be observed in Stockholm, where luxury brands compete for the affluent traveler’s attention.

Growth of e-tail

Online sales account for a sizeable portion of the total retail sector sales. Items including consumer electronics, clothes, and books tops the list of most sold of items through e-tail. The consumers in Sweden also indulge in shopping from international sites, especially in the case of fashion items and accessories.

Opportunities for different retail segments

Sweden is well suited to new retail concepts and there are several opportunities available in most segments in the retail sector. The retail market here is unregulated, proving to be highly favorable to international retailers. However, as the global retail industry has expanded rapidly into new markets, the Swedish and Nordic markets have been relatively untapped by international retailers. Traditionally, domestic, and Scandinavian brands have dominated the country, but in recent years new brands have entered the market with further expansion plans. There have been a number of new openings during the last five years. There is also an increasing interest from premium brands among retail sector consumers in the region. Additionally, several international food and beverage players are also increasingly entering the market.

Favorable logistics hub

Sweden ranks top as one of the most trade-friendly and logistics efficient nations in the world by smoothly moving goods and connecting manufacturers and consumers with intentional markets. Sweden is the preferred choice when companies consolidate distribution and warehousing activities in Northern Europe to one central location. From Sweden, major cities in Sweden, Denmark and Norway are accessible by road transport in less than 12 hours, while Finland, Latvia, Lithuania, and western Russia are accessible within 24 hours. Several Swedish locations are used by foreign retail sector companies for centralized distribution in Northern Europe.

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Retail customer intelligence

Future of Retail: Top retail industry predictions for 2019

2018 was a year of growth for the retail industry as several brands saw accelerated growth rates due to tax cuts and low unemployment. According to the retail industry analysis by experts at Infiniti Research, 2019 will be a precarious year for players in the retail sector. As the stock market is in flux, the future of retail is expected to be dominated by steepening tariffs. Furthermore, another intriguing retail market trend is emerging markets are taking on a greater share of global growth. However, these challenges could also present several opportunities for savvy retailers who are willing to face the winds heads on. Here’s our take on the key predictions for the future of retail in 2019 and also how retailers can stay prepared for the upheavals in the market.

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Top predictions defining the future of retail

future of retailConsumer centricity to go mainstream

Putting customers at the center has been one of the key factors of focus for most companies in the retail industry today. But most companies have realized that holding a strong market position involves more than merely monitoring and connecting with customers on social media. The future of retail will revolve largely around the use of advanced technologies like Voice of Consumer (Voc) analytics. Such retail industry trends will allow retailers to determine what their customers want and deliver it with speed and at scale. Data will play an integral role in the future of retail to meet customer needs and expectations.

Impact of increasing tariffs

The retail industry will begin to see the real impact of the Trump administration’s tariffs on the Chinese exports which will increase steadily this year. A major portion of the burden of these rising tariffs will ultimately fall on the U.S. shoppers. A detailed retail market analysis undertaken by our experts also reveals that companies will be soon be faced with making decisions to determine the categories and products where they raise prices and push the cost increases onto the customers, and where they need to absorb the cost increases themselves. This may result in retailers evaluating whether it makes sense to exit certain categories which they are not able to sell profitably. The future of retail in the UK and EU will also face similar challenges.

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Algorithms will take control

As the future of retail is now largely being driven by innovative tools to leverage consumer data, 2019 will be a year where retailers increasingly leverage data to make decisions relating to what to offer to the customers. While data has long been available to retailers, its true potential wasn’t realized until the retail industry learned the hard lessons from some popular e-commerce websites, whose assortment decisions are made exclusively using data and bots. The data available can be used to build tailored assortments and target customers effectively to drive conversions.

Learn more about the opportunities and challenges in the retail industry

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Role of Customer Intelligence in the Future of Retail

omnichannel strategy

Creating an Ideal Omnichannel Strategy: What Businesses Must Know

What is an omnichannel strategy?

The consumer path to purchase is no longer linear. Instead, their shopping journey has many touchpoints, both online and offline. An omnichannel strategy refers to an approach to sales that seeks to provide customers with a seamless shopping experience across various channels. Today, it has become increasingly important for businesses to operate on both online and offline channels in order to gain a better foothold in the market and to prevent themselves from losing out on important local sales leads. The bottom-line result of such a strategy is immense, as businesses that provide an omnichannel experience achieve greater annual customer retention rate, compared to companies without an omnichannel strategy.

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How to create an effective omnichannel strategy

omnichannel strategyOmni channel retailing is a great way for companies to enhance their customer experience and promote better business growth. Modern customers rarely depend on only one channel (online or offline) to make a purchase. They tend to shift between both these channels. This makes it vital for brands to ensure that they invest in an omnichannel strategy for their business. Experts at Infiniti have curated some key steps involved in creating an excellent omnichannel strategy:

Discover where the audience is

A company’s omnichannel strategy should begin with a clear idea as to where their customers are. Companies must identify which platform their customers frequent and the medium/devices that they use the most. The goal here is to have a clear idea as to where the target customers hang out, and where they normally shop.

Convert touchpoints

Converting all the touchpoints into shoppable ones is the key to omnichannel strategy. Taking care that customer has a memorable shopping experience irrespective of how they shop is the key here. Identify what other channels can be leveraged other than the offline and online stores to garner sales. For instance, several brands are now using social media channels such as Instagram and Facebook to engage with customers and even lets them shop through these channels.

Ensure smooth transition

Brands that have both online and offline presence must bridge any gaps that exist between the two channels. The ultimate goal here is to ensure a smooth transition between transactions occurring on both channels. For example, customers can be allowed to place their orders online, and then pick them up at the brick-and-mortar store of the company. This will ensure an enhanced customer experience as customers can save a lot of time.

Keeping up with the changing customer demands can prove to be challenging. Request a free proposal to know how we can help you stay updated with the market trends and build agile strategies to meet the changing demands.

Omnichannel strategy vs multichannel strategy

Multi-channel and omnichannel strategy, though quite similar, aren’t exactly the same thing. So, what is the difference, and what is its importance to retailers?

Earlier, multi-channel selling in retail took two forms:  in-store and mail-order catalogs. However, a multichannel strategy in retail now takes several forms including brick and mortar, pop-ups, catalogs, telephone, online store, social media, mobile apps, and third-party online marketplaces. Multi-channel retailing strategy involves selling to customers through both traditional offline outlets like brick-and-mortar locations as well as online outlets.

Omnichannel strategy, on the other hand, includes more than just the transactional channels, it refers to every interaction and touchpoint customers have with your brand. Omnichannel strategy in retailing is a more holistic approach to understanding how all of the various entities, interactions, and transactions work together to create a singular experience.

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trend analysis

Top KPI Metrics to Squeeze More Dollars From Your Retail Store

For a long time, retail stores have been using pretty straightforward KPI metrics to measure their performance. The performance was usually measured in terms of physical transactions, including costs, margins, stock turnover, and like-for-like sales. Such KPI metrics typically omit the customer relationship side of the business or individual segment potential. At a time when the retail industry is highly competitive, they have to look at various facets of their operations to improve themselves and deliver superior results. So what are the top KPI metrics retail stores shouldIR_Brochure focus on to improve their productivity?

Sale per square foot

Total sales/total surface area in sq.ft.

Real estate expenses are one of the most significant spend areas for retail stores. Retail stores usually pay out large sums of money for the lease, rent, or purchase of prime real estate locations. Thereby, it is crucial for them to generate maximum revenue from the available space. Sale per square foot is an essential retail KPI as it can benchmark performance of small retail stores against larger ones. Additionally, the metrics also tells a lot about the effectiveness of the store layout and the performance of the sales personnel.

Average customer spend

Total sales/number of transactions

One of the most obvious goals of a retail store is to get customers to spend more. Average customer spend calculates the average amount customers are spending during each purchase. Average number of units per transaction (UPT) is another form of this KPI metrics. These metrics depend on the type of retail stores as customers’ spend will be higher in an electronics store, whereas UPT will be higher in grocery stores. Average customer spend can be helpful for retailers to segment their customers in order to plan their sales and marketing efforts accordingly.

Conversion rate

(total transactions/total shopper traffic) *100%

The conversion rate is a simple metrics which calculates how many visitors have been converted into a shopper. For data capturing purpose, sensors from the door counter can keep track of total number of visitors and number of transactions can be retrieved from the POS system. Analyzing conversion rates can provide insights into staffing requirements and promotional efficiency. Retailers can gauge their promotional campaigns based on the conversion rate. A low conversion rate usually signifies poor marketing effort or inadequate performance from sales associates.

Year over year (YoY) percentage change in sales

((sales for time period this year/sales for time period last year)-1) *100%

Financial goal or wealth maximization is the goal of every business in existence. The same holds true for retail stores as well, since retailers measure year over year percentage change in sales to assess the growth rate. However, retailers should be careful while using this KPI metrics for performance measurement as it does not take into account shopper behavior changes, economic fluctuations, or other external factors.

Sell through rate

Number of units sold (time period)/starting on-hand inventory for the period

Sell through rate is the ratio between the number of units sold in a particular period and the starting on-hand inventory for that period. This KPI metrics gives an overview of the amount of inventory a retail store is able to sell in a given period. A higher sell-through rate indicates better performance as the retailer is able to sell most of its stock and maintain an optimum level of inventory. Sell through rate becomes even more critical for seasonal merchandizes as retailers want to sell most of the stock before the season ends.

Year over year (YoY) percent change in shopper traffic by time period

((traffic for time period this year/traffic for time period last year)-1) *100%

YoY change in shopper traffic provides an insight into the reasons why shopper traffic is fluctuating. For instance, a positive change in the local economy can steer shoppers towards the retail store. Additionally, it can also help retailers plan inventory and sales personnel to cater to the demand of the changing shopper traffic.

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e commerce companies

Counting Down the Pioneers of the eCommerce Business

The shopping habits of the consumers across the world has changed significantly. Today, they prefer to make purchases from the comfort of their home. Online shopping is rapidly replacing traditional store shopping. Although traditional retailing still accounts for a significant portion of the retail sales, the trend has been shifting with e commerce companies growing at an unprecedented rate.

The increasing use of internet and smartphone has also fueled the growth of the e commerce business. In order to attain further growth prospects and provide the best possible customer experience, top players have been continually tinkering with the e commerce business models.

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Top five global e commerce companies

#5 – Alibaba

Alibaba is one of the top Chinese e commerce companies that executes about 80% of China’s e-commerce transactions. The company was founded by Jack Ma in 1999 as a business-to-business (B2B) sales platform. Today however, they offer a wide range of products and services including electronic payment services, shopping search engines, and data-centric cloud computing services.

The company also runs a business to consumer marketplace under the brand name Tmall and a consumer to consumer marketplace similar to eBay called Taobao. The company also pioneered the concept of Single’s day which generated record sales of $25 billion in 2017.

#4 – Walmart

Walmart, the largest retailer in the world, makes it to number four on the list. The presence of the American retailer signifies the growing importance of the e commerce business. Walmart’s focus on becoming one of the biggest e commerce companies globally was even more solidified by market expansions and M&As.

In order to fight its competitor Amazon, Walmart has invested heavily in their e commerce business and introduced Walmart Pay and OpenOps, a cloud administration service. However, the online business of Walmart currently accounts for 3% of their total revenue.

#3 –  Macy’s

Macy’s is a one the world’s leading American e commerce companies with a department store chain called Macy’s Inc. The company owns more than 780 retail establishments across the US, Hawaii, Puerto Rico, and Guam. In 2017, Macy’s restructured their retail business to focus on their digital business as they poured in $550 million of investment and also closed down about 68 store locations. The retailers also used services from SAP to gain better insight into customer behavior with predictive analytics.

#2 – JD.com

JD.com, previously known as 360buy, is one of the leading Chinese B2C e commerce companies. The company is a member of the Fortune Global 500 and had 266.3 million active users as of September 2017. The company also possess the largest drone delivery system along with superior technology for robotic delivery services, drone delivery airports, and autonomous trucks.

#1 – Amazon

It comes as no surprise that Amazon tops the list of the biggest e commerce business. The company started out as an online book delivery service in 1994 by Jeff Bezos. The company now provides a host of products and services including Amazon Prime Video, Amazon Prime Music, Amazon Web Services, Amazon Kindle, Amazon Alexa, and Amazon Echo. In 2017, the company generated revenues of $178 billion with 566,400 employees across the world. The company owns multiple subsidiaries including Zappos, Diapers.com, Audible, Goodreads, IMDb, and Kiva Systems.

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What is in Store for E-commerce Packaging in 2018?

With each passing year, ecommerce has started swallowing up a significant chunk of the retail market share. Several players in the online retail space have managed to garner customers’ trust and establish themselves in a short span of time. In order maintain this customer base in the future, it is a requisite for companies to ensure that their offerings, right from the packaging of the product to the delivery stage, are streamlined to meet the customers’ expectations. Customers form an impression about a product on the retail shelf through its packaging; this is exactly what the packaging of the goods does for ecommerce companies. Any damaged or frayed packaging could lead to severe dissatisfaction, and loss of trust in the company from the customers. This makes ecommerce packaging solutions one of the critical factors that require serious consideration from online retail platforms. Thinking of ways in which you can make ecommerce packaging solutions more effective for your business? Here are few trends that you can look up to for some packaging inspiration:IR_Brochure

Frustration-free CPEX

The difficult packaging of products could end up putting customers into a wrap rage, especially in situations where they are eager to get their hands on the product ordered. Good ecommerce packaging solutions aim at making unboxing of products a pleasant experience for the customers. Taking this into consideration, popular ecommerce players such as Amazon have introduced frustration-free CPEX (Customer Packaging Experience). This ecommerce packaging solution packs the products into specifically designed frustration-free packaging directly at their facilities. It means that customers will receive the same product that they find on a retail store-shelf, the only difference being it would be in much better packaging.

Unique design features

When a packaging displays unique packaging designs, it elevates the brand in the eyes of the customer. Ecommerce packaging solutions can incorporate uniqueness in packaging either in terms of functionality or decoration. The basic idea is to make the process of receiving the package more exciting for the customers. When customers feel that they are getting more value and a differential experience, their morale towards the company would simultaneously rise.

Big data design optimization

Ecommerce packaging solutions must aim at optimizing packaging infrastructure with storage in mind. This would help the company to gain efficiency in large fulfillment warehouses. A typical example is incorporating RFID tags and barcodes on the packaging, which allows to speed up the process of picking and packing items from the shelves. Ecommerce companies can use packaging analytics data to help increase efficiency at all stages of packaging development.

Personalized packaging

When customers get equally excited and happy about the packaging – you know that you have just raised the bar for good packaging. Personalized packaging is not new to the retail industry; however, they were previously adopted only by luxury brands. But thanks, to personalization software developments, the experience of personalized packaging can be implemented into businesses in an affordable way. Ecommerce packaging solutions that aim at creating a unique experience for customers must consider adopting personalization measures to make the customers feel a connection to the brand. This would eventually enhance the overall experience and delight of the customers.

Sustainable packaging materials

The rising demand for environmental-friendly are attracting more companies to shift to green packaging techniques. These degradable and recyclable materials also make it easier for customers to dispose them. If you are looking to go-green and appeal to customers at the same time, then sustainable packaging is the way forward.

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Related Posts

Retail stores Vs. E-tail: Major Barriers and Top Benefits

The concept of retail stores or the brick and mortar model has been in existence from time immemorial. But with digitization spreading like forest fire around the globe, new models of trade and commerce famously termed as e-tail has taken birth. Like two sides of a coin, both retail and e-tail have their respective perks and drawbacks. While ease and convenience are the key factors that give e-commerce an edge over retail stores, the lack of touch and feel and the risk involved is a significant drawback of going digital. What are the other critical points of difference between these two models of shopping? Let us find out:IR_Brochure

Personal Assistance

Many times, especially while shopping for clothes or electronics at retail stores, we seek assistance from the store consultant for opinions and more information about the products before making a purchase. This is one of the key factors lacking in the case of an e-tail model. While making a purchase online, the customers have to go by the information given on the online shopping portal and trust their intuitions to make the right purchase decision.

Deals and Offers

As you may be aware, the cost of setting up retail stores are much higher when compared to that of e-commerce. This is one of the primary reasons why you will find more attractive price cuts and offers in an online shopping platform when compared to retail stores selling the same products. For the price conscious customers, the digital shopping model is nothing less than a boon.

The Conversion Rates

Digitization has given birth to new models of marketing and advertising as well. Though in many cases, online advertisements have been found to have a comparatively more extensive reach, the conversion rates of e-commerce sites are much lesser. In a regular retail store, out of the number of customers who walk in, the conversion rate or the sale rate is much higher when compared to the e-tail platform.

The Power of Choice

The players in the e-tail platforms widely exploit the benefits of low set-up costs by giving the customers a wide range of choice and options, which is not very feasible in case of retail stores. This makes online platforms of shopping more attractive and convenient for customers when compared to retail outlets where the alternatives available to them are limited.

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