Resilient stores see a spike in sales by pivoting their businesses online amid pandemic

Despite the upheaval and big volume drop in physical retail sales in the wake of the pandemic, sales generated by ecommerce have soared.

Dramatic start

Three weeks after lockdown, turnover for Front Systems customers plunged by nearly 71 percent, compared to the week before & after the measures to combat the coronavirus outbreak were introduced.

- Disruption to businesses from coronavirus have led to permanent store closures for some while those that were open noticed net sales fall by 50 and 60 percent compared to the number prior to the pandemic, says Haakon Skavhaug-Flender, product manager and partner in Front Systems.

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The graph shows the effect Covid-19 has had on 700 Norwegian retailers. The light blue shows total sales and the dark blue shows the number of open stores. Source: Front Systems AS

From traditional retail to ecommerce

Ecommerce was steadily gaining momentum with the onset of the pandemic and the ensuing lockdown. There was a formidable increase in the number of stores transitioning from physical commerce to ecommerce, and just three weeks into the corona crisis net sales amplified.

Skavhaug-Flender explains:
- Before the pandemic hit Norway, our customers have had online sales that accounted for around 10 percent of total revenue. However, post the outbreak they have seen an unprecedented uptick in online sales. It jumped to 45 percent just three weeks after a state of emergency was announced.

Now that all stores have reopened, except for those that have filed for bankruptcy, we see that ecommerce sales are now plateauing. One of the concrete reasons being that majority of consumers, even in the pandemic era, want the tactile experiences offered by physical stores.

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Net sales in NOK per week this year. Week 12 was the week when the descent was underway. Source: Front Systems AS

- Online shopping probably won’t go back to what it was prior to the crisis, says Skavhaug-Flender. There has been a dramatic shift away from online / offline divide, a change that was a long time coming. The global crisis has added greater urgency to this effort. 

- Retailers have woken up to the need for blurring the lines between shopping online and at stores. Today, it is just unified commerce, created by merging real world and digital world experiences and thereby keeping the consumers connected all the time. The pandemic appears to have propelled the demand for technology development, that would have taken 10 - 15 years otherwise. As more businesses close their stores, a unified approach is the difference between surviving and going under. We have recently been approached by several brands and chains that are now willing to take practical measures to rapidly pivot their businesses by uniting the digital and physical with ‘endless aisle’, loyalty, click and collect, send from store, mobile cash register and more, says Skavhaug-Flender.

Post Nord reports that two out of three Norwegians shop online once a month. Several other delivery companies too have seen delivery sales soar in recent weeks.

- To embrace the cultural and behavioral shifts that COVID-19 introduced, it is imperative to know your customer’s touchpoints and be visible, concludes Skavhaug-Flender.

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Haakon Skavhaug-Flender in Front Systems reports increased demand for online store due to changed shopping patterns.

Opened a new store amid pandemic

Retailer Moniker has successfully launched a new store in Oslo, despite the unprecedented challenges of COVID-19.

- We intended to open on April 1st, but the opening of the entire shopping center was put off as the pandemic was churning unabated, says Jørgen Jalland, who along with his spouse Anett Ringstad Jallan owns the concept store that is located at the Valkyrien Center in Bogstadveien, Oslo.
- When the government presented its plan to reopen schools and kindergartens in the first step of gradual lifting of lockdown, we felt hopeful, and after discussing with the owners of the shopping center, a decision was made to open Valkyria center’s doors on Thursday, April 23, says Jalland.

Long-term project

- We have been working on this project for almost a year and a half, and this will continue for a long time for us. The pandemic has slowed the economy to a crawl. While some stores are doing better in comparison to their pre-crisis level, others are beginning to crumble and facing an existential threat. We started with blank sheets, and in that sense unproblematic since it was more about opening the doors and getting started, Jalland says and continues: We were largely uncertain over what to expect, and we had low expectations of both visitors and retail turnover because of the pandemic crisis. The response however has been overwhelming and a lot better than we had hoped for. The number of visitors is at a good level and we feel that we have got off to a good start, he says.

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Ringstad and Jalland opened multiband and sports fashion concept amidst the coronavirus crisis.

Chameleon

The 800-square-foot concept store was developed in close collaboration with the design and architecture firm Snøhetta. The store offers a carefully curated and unique selection of products both in women’s clothing as well as interiors.

This luxury store has five departments that are influenced by five women with strong personalities and distinctive characters: Grace Jones, Jane Birkin, Hedy Lamarr, art collector Peggy Guggenheim and Isabella Bird.

The concept of this retail space is chameleon inspired. The entrepreneur couple explain that each department is imbued with distinctive character and charm, a fresh experience that will resonate with each consumer on an individual level and influence their personality. They state further that the place is all about inspiring customers to explore different styles depending on mood and day, a mode of self-expression akin to chameleon.

In addition, they have a 350-square-foot Moniker Sport store. This one is on the second floor and sells sports fashion for both men and women. Moniker Sport is inspired by Anna Lee Fisher who was the first woman in space and her husband Bill Fisher who was also an astronaut.

Moniker uses a Front Systems mPOS on iPad, and customers can complete their payments wherever they are in the store, without having to queue in busy periods.

Venturing into eCommerce

Jalland says that Moniker plans to invest heavily in ecommerce, but that they have not yet had the time to focus on this.

- We launched the online store a couple of days prior to opening the physical store. For us, it is about being equipped to make our concept available both in physical store as well as online and drive customer experience and loyalty.

Launched physical store two weeks before the corona crisis

Sondre Olstad, general manager of Framsport, started selling Hoka shoes from the clinic where he works as an osteopath. By popular demand, he launched an online store. In early March, he opened a physical store in Sarpsborg, just before the outbreak in Norway.

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Sondre Olstad is experiencing an increase in sales during the corona crisis.

- I was perturbed by the anticipated decline in revenue due to the pandemic-induced lockdowns. However, we experienced a 30 percent increase in online sales in March / April compared to January / February, and higher sales in the physical store than we had expected. You can probably say that it has  transcended  our  expectations, says Olstad, adding, - the only sales deterrent we faced during this crisis was a stock - out at the manufacturer.

A marketing campaign that works

- We did implement infection prevention  measures but have done nothing different during this period to increase sales. We continued to market in the same way we always did. We work actively with product content about the Hoka shoes, with guides on which shoes are more appropriate and practical for different situations, and continuously advertise through Facebook, Instagram, and Google. We write articles, make movies, take our own pictures, and work extensively with search engine optimization (SEO), so that the content we create becomes visible and drives traffic to the website.

- We faced a lot of pressure when we opened the store in Sarpsborg, and this has helped raise awareness around Framsport. We do not run any exclusive offers, but actively work with those who follow us through newsletters, among others. The presence of several channels helps us achieve maximum reach to our customers at any point in their purchase journey. Automated digital marketing has been a revelation to us.

Although Hoka shoes sell well, there have been particularly high sales over the past two months as the fitness centers are closed and many see the need for good shoes for outdoor training and recreation, he says.

Queues outside the store

Framsport did not have to lay off any employees.

- We had to bring in more people to meet the surge in online sales. I was in the store from 7 o'clock every morning, working all day serving customers and sending out items that have been purchased in the online store. Customers queued up outside the store and the demand has been formidable, concludes Olstad.