Mastering retail requires mastering detail – a fact not lost on Elkjøp, one of Scandinavia’s largest consumer electronics brands. The chain was desperate to mirror the enviable quality of its in-store engagement through its online and mobile channels, but was stuck with customers frequently abandoning the checkout process. And in the consumer electronics market, where every interaction is of huge significance, knowing what will drive a customer to buy is crucial.
Unlike grocery stores, which have the luxury of customers buying multiple products every week, firms like Elkjøp instead rely on occasional or even distress purchases. That includes products like washing machines, usually acquired when their predecessors have catastrophically failed, but also phone and television upgrades, which usually happen every two or three years. Since the turnover of returning customers is much lower than in other sectors, consumer electronics brands must ensure that the purchasing process is slick and personalised for their patrons – the better to ensure that, when their iPad breaks or their dishwasher floods the kitchen, their first instinct is to return to the same retailer in two years.
Elkjøp had perfected that dynamic in its 400 physical stores, where it received high marks from customers for its technical support, product information and customer service. Online was a different story, explains the firm’s director of e-commerce, Julia Paulsen. “On the mobile channel, which is used by 67% of our customers, checkout options using a carousel model were difficult to use,” says Paulsen. “People could not easily see all the payment and delivery options – so the user experience was shit.”
From reactive to predictive
Paulsen’s response was twofold. Firstly, using digital experience analytics platform Contentsquare, she proposed a revamp of the checkout page so that customers could quickly and easily see the delivery and payment options available to them. “We have four different markets, so we tested a different layout for Black Friday offers in each; one had the carousel, one had lots of text, and so on,” she explains. “We found most people were using the category banners, which resulted in a 3% higher completion rate. Just displaying the same information in a different way had a big impact on customer experience and sales.” Clearly, it worked: from week one, add-to-cart rates rose by 6%, driving a revenue increase of 44.5m Norwegian kroner (equivalent to £3.26m.)
Secondly, Paulsen also laid down a pathway towards AI-driven predictive customer personalisation for Elkjøp’s online purchasing channels. Bringing together AI, customer feedback, and business-wide data, she drastically altered how the brand communicated with customers by enabling the company to predict what its patrons needed before they even started searching for products. This new framework, says Paulsen, has enabled Elkjøp to become much more responsive to feedback from new customers.
The new platform has also seen Paulsen’s team now constantly testing possible solutions to knotty customer satisfaction roadblocks, using its available data to make small improvements in real time. AI is additionally helping customers to find their way through the 420,000 products on Elkjøp’s site with personalised recommendations.
The changes have already yielded value. Online revenue share has risen from 24% to 30%, and the in-store channel remains strong. Around 54% of sales are still connected to the store in some way, which is good for business, as online margins will never reach the same high level, but there is more consistency across channels.
The timing couldn’t have been better, with Elkjøp moving towards a model of 80% data-driven merchandising (previously 80% human-driven). As a result of the new strategy, the firm has already greatly reduced the dropout rate for online customers.
Finding the optimal customer experience is always a work in progress (it’s with that goal in mind that Paulsen’s personal mantra, she tells Tech Monitor, is “progression over perfection”.) A lack of data was never the issue, but the data was not revealing its true value. Now, there is a lean and structured approach focused on the customer and defined by the data, which is improving Elkjøp’s ability to predict the behaviour and preferences of the people to whom it is selling.
“Before, we had platforms to monitor customer data, but they were so complex that no one was using them,” Paulsen admits. “I wanted the systems to be used by everyone, not just by an army of data analysts – and that is what we have now.”
Read more: The AA’s rescue vans kept losing signal. Here’s how they got back in touch.
