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Online and mobile usage in the Nordics

Online overview

While this country guide groups the four countries together as the ‘Nordics’, it is obvious from various datasets that they each have their own identities. The following chart from the Danish Payments Council / Eurostat highlights, in the latest official comparison data available, that they are all advanced adopters of technology. Norway, Sweden and Denmark are in the top three for countries surveyed for penetration of online shopping amongst the population. Finland is only slightly behind in 7th place with approximately 65% of the population having shopped online.

Figure 3: Percentage of population that shop online at least once during 2012. Source: Danish Payments Council / Eurostat

As part of their Digital Single Market project, the EC publishes regular score-cards showing the adoption levels of technology amongst member states. Reporting on weighted scores, it shows the Nordics performing well in terms of digital adoption, both in terms of government, commercial and citizen usage. Denmark ranked highest in the scorecard closely followed by Sweden and Norway with Finland a respectable fifth. This points to a marketplace that not only has the infrastructure to support a digital economy, but also a high degree of utilisation by consumers.

Figure 4: Digital Economy and Society Index. Source: EC digital scorecard: February 2016

Data from Norden.org illustrates the relatively high percentage of consumers from each of the Nordic countries that have purchased online. At first glance it would appear that growth of consumers making internet purchases has slowed. However, with the base line being so high, it is probably more representative of a maturing trend. It appears that the vast majority of consumers are already making purchases online; the challenge for industry now is to encourage them to spend more of their retail budget through digital devices.

PostNord reported in a 2017 survey that ecommerce was valued at €21.9bn in 2016. The same report also suggested that there are 18.9 million consumers equipped to shop online with 62% doing so in any month. With the largest population it is no surprise that Sweden contributes the most to this overall figure with €8.5bn with Norway and Denmark both generating about €5.1bn.

Figure 6: Internet purchases by individuals by reporting country and time. Source: Nordic Statistics, norden.org

Figure 7: Total ecommerce in the Nordics during 2016. Source: PostNord E-commerce in the Nordics 2017 - E-commerce in the Nordics 2017 is based on consumer surveys conducted monthly in Sweden, Denmark, Norway and Finland during the period February 2016 through January 2017. The number of respondents surveyed totalled 89,223.

At consumer level, this equates to Norwegian consumers having the highest average individual annual spend online at €1,367 per annum, with Denmark at €1,223, Sweden at €1,218 and Finland at €787.

Source: PostNord E-Commerce in the Nordics 2017. Calculated as total online spend divided by adult online population.

These numbers highlight some areas for consideration. Sweden has the lowest level of internet penetration out of the four countries, but the joint highest average spend and largest total market. Norway has by-far the highest annual spend yet also the smallest population.

These figures probably reflect the amount of choice the individual domestic markets currently offer, while the Swedish have been found to be strong advocates for digital and have taken well to online shopping.

Looking at where shoppers spend their money, clothing is the leading category in all Nordic countries according to research by PostNord. Media is the next biggest sector with consumer electronics and health & beauty following close behind.

Figure 8: Top product categories excluding Grocery (average month Jan - Dec) 2016 Source: PostNord E-commerce in the Nordics 2017

Nordics consumers benefit from access to a good range of online merchants. Every country has a different list of the top 10 online stores with very little crossover, except in the international stores that they visit.

The data that follows is from a TNS / Net survey in 2014 showing top online shopping destinations by percentage market share amongst the shoppers surveyed. The key brands to watch, especially in the international space, are Amazon, CDon, eBay, HM.com and Zalando. CDon and Komplett are particularly interesting brands worth investigating further.

Demographics

In terms of shopper demographics, data from payments company DIBS shows interesting differences in relation to shopping frequency depending on age and country. In all countries, apart from Sweden, the most frequent online shoppers are 30-44 years old. In Sweden however, it is the 45-59 age group who are the most prolific.

Figure 9: Average number of online purchases by demographic and each country in the Nordics. Source: DIBS’S Annual Report on ecommerce, Mobile Commerce and Payments 2015

Geography also has a role to play impacting access to markets, both physical and digital.

With the exception of Denmark, which has a relatively flat landscape and very good road networks, the Nordics suffer from having large areas with sparse populations. Norway has a particular challenge in that its landscape is very mountainous, with the second-longest coastline in the world and lots of small inhabited islands – so providing good vehicular access is clearly an issue.

Mobile overview

It is clear when looking at the availability of fixed lines, mobile and internet, the majority of the population of the Nordics has good access to connectivity. This fuels adoption of technology and creates the environment that encourages not just digital commerce, but cross-border commerce as well. The internet provides access to a global resource for discovery and consumption. The Nordics represent a market that has all of the foundations for international, digital commerce.

The table below helps illustrate the importance of mobile communications and therefore mobile configured websites. Due to the challenging geography in the region the more remote parts of these countries rely on mobile networks for internet access.

Figure 5: Telephone and Internet services in the Nordic countries. Source: CIA World Fact Book; March 2016

Although mobile communications are particularly important in remote areas, all four countries have concentrations of their populations in small areas so there isn’t a direct correlation between users accessing the internet via mobile devices and their remoteness. The below OECD figures do illustrate a high level of internet access via smartphones suggesting that consumers in urban and otherwise well-connected areas still access online shops through mobile devices. The very fact that this is a measurement of the use of smartphones also shouldn’t be a surprise; the main functionality and purpose of having such a device is not to make calls, but rather to utilise the functionality derived from being able to access the internet on the move.

Figure 10: 2014 OECD rankings – internet access by smartphones. Source: OECD

The OECD notes that the data excludes laptops, netbooks and tablets but includes mobile/smart phones, media or games player and e-book reader.

The global rank also serves to highlight how advanced Nordic consumers are in the adoption of smartphones yet, although the usage of mobile devices is growing, it is also important to note that (as the following graphic illustrates) desktops are still an important component in the digital journey. In many countries, desktops are often the first point of contact when researching activities associated with a consumer’s ‘digital’ life. In Finland, this is the case for over half of the connected population while in Sweden and Norway, a mobile device is the preferred choice.

Figure 20: Device used for first online interaction of a day. Source: Salesforce.com state of marketing survey, Nordics 2014

The age of the customer segment will also have an impact but this is better planned at a brand level, where customer insight can inform investment priorities.

In general however, across the Nordics, mobile adoption is gaining pace and should certainly be part of a merchant’s development roadmap, making full consideration of the mobile shopper’s experience both for browsing and completing online purchases.

A survey by YouGov, commissioned by payments company DIBS, looked at buying behaviours across the Nordics and showed there has been a dramatic increase in the use of mobile devices (smartphone and tablet) for making payments with the number of users who have made a transaction in the past six months increasing by over 90% between 2012 and 2015.

Figure 11: Showing mobile device users who have made a purchase via these devices in the last 6 months. Source: YouGov/DIBs survey 2015

These figures do combine smartphones and tablets as mobile devices. However, it is known from other territories that tablet use is typically in the home and represents a displacement activity; replacing the use of other technology such as laptops, desktops or even telephone ordering from a catalogue. High levels of internet access via smartphones indicate a lot of potential for growth in ‘on the move’ transactions.

The same survey also highlights very similar consumption patterns across Norway, Denmark and Sweden. As we saw earlier – for online shopping across all devices – clothing, media and consumer electronics are the most popular sectors. When shopping on mobile devices travel is by-far the biggest individual sector but clothing and consumer electronics still retain a strong presence. Swedish consumers are ahead in the clothing sector while Norwegians lead in consumer electronics.

Figure 12: Mobile transaction patterns in the Nordics. Source: DIBS’S Annual Report on eCommerce, Mobile Commerce and Payments 2015

There is an interesting split between mobile transactions by smartphone / tablet, as illustrated by the Adobe Digital Index. Focusing purely on the travel sector, smartphones accounted for around 7% of mobile device transactions in Norway and Sweden, 5% in Denmark and 3% in Finland. As a rough guide, in this study, about one third of mobile transactions are carried out by smartphone.

Figure 13: Expected m-commerce share of online holiday sales. Source: Adobe Digital Index 2015

Using Norway as an indicator, Apple smartphones hold a slim majority over Android devices. While not covering the whole region the numbers do reflect other geographical comparisons. On this basis, merchants would be advised to consider the balance that their brand sees in other territories when looking at mobile design elements.

Figure 14: Market share of mobile phones by manufacturer in Norway. Source: TNS Gallup Norway InterBuss Q2 2015

A similar survey in Denmark showed that Apple has a significant lead in terms of handsets and by operating system; even with all of the other OSs added together.

Figure 15: Smartphone manufacturer market share in Denmark. Source: IAB Denmark / TNS Gallup June 2015

When considering the optimisation of the mobile experience, it is worth understanding what local merchants are doing in the area. A recent study by the Nordics Smarter eCommerce Group showed that 80% of Danish retailers use a responsive site to optimise the customer experience. App usage is quite low at 6%. Sweden demonstrates similar characteristics while nearly a quarter of Finnish merchants are utilising apps.

Figure 16: How Nordics retailers optimise the mobile shopping experience. Source: Nordics Smarter eCommerce Group 2015

With regards to the age profile of smartphone users, not too much can be inferred from this profile. The challenge with this metric is that ownership doesn’t equate to usage; it is very difficult to buy a ‘dumb’ phone with a mobile contract. It does however highlight market potential and, for certain brands, taking age into account might actual enable them to encourage uptake by their customers.

Figure 17: Consumers owning a smartphone by age. Source: Salesforce.com state of marketing survey, Nordics 2014

Other media

Technology usage has shifted consumption patterns around all different kinds of media, from print to television. In many territories, TV viewing has been hit hard as other pastimes compete for consumers’ free time. In the Nordics however, the net impact has been minimal. The data points in the following table show peaks in certain years, thought to be the result of major sporting activities such as football. Additionally, certain territories have seen an increase in Pay-TV subscriptions and the streaming of programmes to digital devices has also helped consumers. Users are now much more in control of curating their own content and viewing when convenient to them. This does offer challenges to advertisers but increasing multi-screen usage, where a TV viewer will often have a tablet to hand, is improving opportunities in the advertising space.

Figure 18: TV viewing time (minutes / day) in Nordic countries. Source: TNS Gallup Danmark / Norge 2014

These wider media consumption trends can also be seen in the numbers of users signing up for subscription services. Grocery subscriptions are a niche market at present, aimed at high-end customers and music streaming is replacing CD purchases, particularly where there are local players such as Spotify in Sweden and WiMp in Norway.

% What products or services have you subscribed to online?

Figure 19: Subscription service usage in Nordics 2014. Source: DIBS’S Annual Report on ecommerce, Mobile Commerce and Payments 2015

Magazines and newspapers have been hit by free online content but TV / video streaming is on the increase, with many mobile networks providing subscriptions to these services as part of the mobile contract.

 

 

Demographics

Political and socioeconomic environment

Online shopping behaviour

Marketing

Optimising customer experience

Trust and dispute resolution

Legal framework and regulation

Logistics and delivery

Finance and payment

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