Digital acceleration and a new marketplace are Stockmann’s responses to the market transformation

Digital acceleration and a new marketplace are Stockmann’s responses to the market transformation

Stockmann, which is famous for its brick-and-mortar stores, is making major investments in its online operations. The strong connection between the brick-and-mortar stores and online stores manifests itself in several ways, including the diverse range of delivery options. The forthcoming marketplace promises to shake up the Finnish online store business.

The imposing stone building in central Helsinki is a landmark familiar to many. Stockmann’s flagship department store stands in a central location and is an essential part of the capital’s history. Although the building itself recalls times gone by, Stockmann has its sights set firmly on the future.

The company is over 150 years old but it is undergoing a new transformation. Familiar themes in the retail sector, such as digitalisation, consumers switching from brick-and-mortar shops to online stores and a multichannel approach, are also drivers of change at Stockmann. The digital acceleration, which started at the beginning of 2018, is preparing the company to ensure that the Stockmann brand remains relevant as the market changes.

A more extensive product range for customers

The digital acceleration has led to significant changes at Stockmann. Under the project, the company, which previously relied heavily on its brick-and-mortar stores, made strong outlays on the comprehensive development of digital solutions, including e-commerce and background processes influencing the customer experience.

“The most significant step in 2018 – one that was also outwardly visible – is the increase in product availability on the online store. In its present form, the online store is already able to represent Stockmann’s entire product range reasonably well, and the products available at the Helsinki department store are now better available to all customers,” says Anna Salmi, Stockmann’s CDO.

According to Salmi, the extended product range soon translated into better financial performance.

“Since the product range was expanded in November, the changes have been reflected in the growth figures for the online store, which have been a sight to behold.”

Aiming for genuine channel independence

Click & Collect, ship-from-store, placing online store orders directly from salespeople’s tablets – the modernisation of Stockmann’s online business has resulted in more than an expanded product range; it has also represented a step towards more diverse delivery options and genuine channel independence. According to Salmi, the distribution centre opened in Jussla, Tuusula in April 2016 is one of the key enablers of a multichannel business.

“The distribution centre is highly automated and we are now beginning to make the most of it. At present, 70% of orders are dispatched within one day, and this has been a major step forward for us.”

In addition to the distribution centre, Stockmann delivers products directly from its department stores if the products are out of stock in the warehouse. So far, products have been dispatched from the Helsinki department store, but there are plans to expand the ship-from-store concept to other Stockmann department stores in Finland. The Click & Collect point offers further flexibility for customers, enabling them to pick up their online store orders any day of the week before midnight.

Marketplace expands the product range

Stockmann has long been renowned for its product range and customer service. A marketplace focusing on fashion, beauty and home design will open in spring 2019, providing Stockmann’s online store with a more comprehensive range of products from different brands. Orders and customer service are handled via Stockmann, but the products are delivered directly by partners.

“We offer brands a reliable and secure marketplace to offer their products and we offer customers a guarantee of the quality of products. For us, this also lowers the threshold for making interesting brands available to customers. The customers are the winners, as they get to enjoy a large range of products,” Salmi summarises.

Comparisons with Amazon began as soon as Stockmann announced its plan for the marketplace. However, there are some fundamental differences.

“Finland is naturally the number one market for us, and we already have information about our customers which we can utilise in order to succeed in our home market. In addition, this is a closed marketplace, which means that we will select the partners whose products are offered,” Salmi says.

“Our core business is operating as a trading centre. Building a digital ecosystem like a marketplace is a natural step forward in this regard. We are now doing the same things online which we have long been doing in our brick-and-mortar stores.”

Skills complement each other in a partnership

Nowadays, digital competence requires deep professional skill, and few companies are able to build everything on their own. This means that it is essential to find good partners with complementary expertise.

“We start with the idea that we do not need to be the best at everything necessary to build the commerce of the future. That is why it is important for us to collaborate with other experts to build the future together,” Salmi says.

“Digia is our most important partner in developing the online business, and we consider Digia’s personnel to be a strong part of Stockmann’s online store team.”

Together with Stockmann’s team, Digia is responsible for maintaining and developing the stockmann.com and Crazy Days online stores. According to Salmi, good collaboration is based on a desire to address all types of challenges together.

“If challenges arise, they are always handled and a solution is sought together. Digia has shown a strong level of commitment.”

The magic of brick-and-mortar is enduring

As the digital acceleration takes place, attention turns to online store projects. What will become of Stockmann’s department stores in the new digital world?

According to Salmi, Stockmann believes in a strong alliance between the online business and brick-and-mortar stores. Stockmann has made investments in the experience customers receive at brick-and-mortar stores by means such as staging opera performances and developing the restaurant services.

“The department store is a unique meeting place and we have had the pleasure and the honour of being a traditional and important place for many people to meet their friends and family members, go shopping and spend time. And through this, the experience consists of different things in different contexts at different times,” Salmi says.

“This building has its own sense of magic, which is bound to endure long into the future.