Elgiganten is outstanding at omnichannel
And they're just getting started...
The consumer electronics retailer is second to none in IMPACT’s Omnichannel Index 2020.We have talked with Elgigantens CMO/CDO, Jimmi Frederiksen, about their success and their sky-high omni-ambitions for the immediate future.
Black Friday 2015 was a defining moment for Elgiganten omnichannel-wise. The consumer electronics retailer had at least 40,000 customers trying to enter Elgiganten.dk every 5 seconds at midnight when the sale began.
“It was huge!” Jimmi Frederiksen remembers.
The result? A homepage that went unintentionally black, leaving the Elgiganten technical team scratching their heads.
That experience made us realise that we had to invest in a much smoother and stronger digital platform. A platform that was connected to the cloud.
The tech wizard of Elgiganten
Jimmi Frederiksen has been working at Elgiganten for 23 years and still counting, and he’s been head of digital since 2010.
With such a long history at Elgiganten, it’s no wonder that Jimmi Frederiksen has been one of the driving forces behind much of the digital success the company has achieved through the years.
A success that culminates with the superior first place in this year’s IMPACT Omnichannel Index.
That kind of success was not to be expected when the young, tech-savvy Jimmi Frederiksen, full of ideas, was appointed ‘to take care of the web’ back in 2002.
At that point, the internet was seen as a diurnal fly. So besides being responsible for the web, I also had to take shifts at the call center.
In 2002, Elgiganten had around 9,000 visitors on Elgiganten.dk a year. This number grew steadily in the years that followed, and Jimmi soon got rid of his call center duties. At first Elgiganten.dk hit 10 million visitors annually. Then 20 million – and the numbers continued to grow.
Luckily, Jimmi Frederiksen’s team grew in size as well, and today where Elgiganten boasts 76 mio. visitors a year in Denmark alone, his crew has surpassed fifteen.
First Omnichannel steps
In Jimmi Frederiksens view, the first signs of omnichannel implementation by Elgiganten took place in 2012, when the company aligned their prices in their stores with the prices on their webshop.
At that time all adjustment had to be done manually, so of course, it resulted in a lot of mishaps concerning what things should actually cost.
“Since 2014, all our prices have been automated and interconnected, so when a price change was made online it would change instantaneously on all digital price tags in our stores”, Jimmi Frederiksen says and adds:
“We've been on a journey towards a deep centralisation. So nowadays, when we change a price on a product, it changes in all of our marketing as well.”
Simultaneously, Elgiganten also introduced collect-at-store as one of the first retailers in Denmark. That proved to be an add-on with a significant effect, Jimmi Frederiksen says:
Collect-at-store was a big part of our online success and was a consolidation of that our omnichannel journey was in full motion.
In the early days, only 15% of the online orders were ‘collect at store’, but it quickly expanded and today, it constitutes a baffling 60% of what Elgiganten’s customers buy online.
Elgiganten.dk was the most used internet shop in Denmark for five consecutive years spanning from 2012 to 2017. Now, also outperforming everyone in the IMPACT Omnichannel Index.
What’s the secret behind Elgiganten’s strength in omnichannel?
I think one of the main strengths of Elgiganten is our 38 stores and how we've been able to merge them with our online presence - making them uniform in regards to service, prices, and info. We perform better than average on all touchpoints and we have the same look and feel no matter which channel you encounter.
No resting on laurels
In September 2020, Elgiganten announced that the company – for the sixth successive year – has a record-breaking turnover.
Even though everything appears to be moving in the right direction for Elgiganten, in 2019, they still felt it necessary to invest half a billion danish kroner on a total overhaul of their IT system – Elgiganten’s biggest digital investment to date.
“The reason we invested so heavily was that we used an old system from the 80’es in all of our stores in combination with an old website that was built back in 2000. We needed to step up. We had kept afloat with tiny updates on existing software, but at some point, you need to say stop and start over from scratch”, Jimmi Frederiksen says.
The new IT system that is made specifically for Elgiganten has been coined NGR – Next Generation Retail. And the investment will, according to Jimmi Frederiksen, continue. He believes Elgiganten will double the expenditure in NGR before 2022. A further investment which he welcomes.
Right now, we see a new generation of potential customers who expect the same tools in-store as they have on a website. It's our goal to provide them with these tools and with the NGR system, it’s possible.
All in one cloud
One thing is that Elgiganten has invested a historically large sum of money and is probably ready to invest even more in NGR. But what is Next Generation Retail all about?
Jimmi Frederiksen enthusiastically says:
“It’s a new system for the stores. It’s a new system for the web. It’s a new system for the call center. It’s a new system for our drivers. It’s a new system for the customer. It’s everything. It’s Next Generation Retail – and it opens an ocean of opportunties.”
To Jimmi Frederiksen, the biggest challenge of doing omnichannel through the years has been gathering data.
“When you look back on the Elgiganten journey, we had over 20 systems in the beginning. Currently we work with five systems, and in the future, all our data will be connected in one system on the cloud.”
Jimmi Frederiksen continues:
That will have a big effect on how we can handle our customers and provide them with different, new services in the future that would have been pure science fiction without the new system.
Customer journeys as A guiding star
Three years ago, Elgiganten teamed up with Fantasy in New York, which is a high-profile user experience company that specialises in customer journeys.
“We invited Fantasy to come to our division in Norway and started working together on designing the ultimate future customer journey,” Jimmi Frederiksen explains.
The basis of the ambitious customer journey design was a survey where 8,000 people in Elgiganten’s respective markets were asked a multitude of questions in regards to their former shopping experiences, and what they would wish in the future shopping-wise.
The project also analysed eye-tracking of how customers looked at the Elgiganten website, and the retailers’ own employees were also interviewed to provide their hopes for the future.
“Everything was broken down into a future customer journey report of 390 pages. The customer journey functions as the North Star for NGR, and I see this report as the bible that we are building Next Generation Retail on.”
Insights en masse
The customer journey report would show to be a gold mine of interesting insights.
One of the key insights we were getting from this survey was: when you as a customer visit our store and experience a queue, then you are only prepared to wait for five minutes, after which you’ll most likely leave the store.
Jimmi Frederiksen continues:
“If we provide customers with information on their phones regarding how long they’ll have to wait to be serviced, we can change this scenario. If a customer knows that he or she will have to wait for exactly 10 minutes, then the task seems doable.”
Another piece of new-found knowledge was that three out of five questions Elgiganten’s in-store employees get is: what is the difference between this TV and this TV?
Therefore, Elgiganten wants to develop a ‘scan and compare’ function to cater to these questions, so the customers can help themselves instead of waiting.
Taking on Amazon
It’s no secret that Amazon is luring in the horizon – ready to take on Sweden in the near-near future with other Nordic markets soon to follow.
One of the reasons we are so invested in omnichannel is that we are perfectly aware that Amazon is coming. They are probably entering Sweden as we speak, and we’ve been preparing.
He continues: “If we can’t beat them on neither product nor delivery – then how can we attack Amazon the right way?”
Jimmi Frederiksen dwells for a couple of seconds and then answers his own question:
“As a big omnichannel player, it is essential that we get our 38 stores activated as much as possible. We need to be able to offer a supreme customer journey experience to our many loyal customers – both online and offline.
In my opinion, if we provide our customers with the smartest digital tools, we can guarantee them a level of service and an overall shopping experience that Amazon just can’t compete with.
Next omnichannel step
When you speak with Jimmi Frederiksen, it’s obvious that he is not a fan of the status quo. He always strives to push the boundaries and experiment.
“For many people in the industry, omnichannel basically comes down to how a home page and physical shop interact. My goal is to take it much, much further.”
Jimmi Frederiksen continues:
“When our new systems are up and running, my next goal is to create an app where our customers log in. Then we can personalise the customer experience even more with specially-designed content and tailored marketing. That will make the interaction with Elgiganten more relevant and valuable than ever.”
But this is only the beginning - there's much more to come. Just wait and see.