On the morning of 17 November 2007, Amazon took its first big step towards conquering the known universe by launching its Kindle ereader, priced at the princely sum of US$399 (€352). It sold out in five-and-a-half hours. This, proclaimed the doomsayers, was the first nail in the coffin for traditional paper books, signalling the biggest revolution in publishing since 1455, when the Gutenberg Bible became the first tome mass-produced using movable metal type.
It proved to be a premature funeral. After an initial surge, during which a host of other ereaders came to market, ebook sales flatlined. Pre-pandemic figures from Nielsen BookScan showed that only 15–20 per cent of all books bought in Australia were in electronic format, a trend reflected in most major countries. Fourteen years after the Kindle came for its blood, print publishing and its physical, touchy-feely products are still thriving.
And the reason? Because the industry adapted its thinking. Beautiful cover design turned books into desirable objects again; bookshops remodelled artfully while curating stock towards local tastes. In short, print publishing pinpointed what motivated the modern book buyer.
“You have to gain the trust of the people you want to work with, and that you want to provide value to.”
The ebook versus print saga would no doubt resonate with a man like Jens Strømnes. As Managing Director of global retail alliance Expert International, the Norwegian operates on the front line of another potential tectonic shift in buying habits, where customers are migrating away from physical stores and purchasing online instead – not only in the consumer electronics sector that Expert inhabits, but also across the board.
“We see, of course, that the consumer is going more and more online,” Jens confirms. “The pandemic accelerated that. I mean, some people say it was five years’ worth of development in six months – we see that as an impact. But at the same time, the pandemic showed us that people were in many cases looking towards local retailers, store formats or locations where they felt safe.
“That trust has become a bigger factor, not only in our sector but in other sectors too. Retail has moved from being relationship-driven – think of stepping up to the counter in the mama-and-papa store and somebody taking the product off the shelf and putting it in front of you – to something transaction-based, with big-box retailers and self-service.
“Whether it’s consumers seeking local stores and supporting local communities, or whether it’s independent stores communicating with their customers through WhatsApp and Facebook, we’re getting back to a more relationship-driven approach. And that applies when we talk about localisation. We are a big group but we’re not a big corporate structure that is slow to move. We have local decision-making taking place so that the people who know the local consumer can make key decisions.”
It’s this belief in the personal touch that underpins much of Jens’s philosophy. After forging his reputation during a 13-year spell at sports retail giant Intersport, he joined Switzerland-based Expert 18 months ago, becoming part of a success story that began in 1967. In the years since, Expert forged alliances with retailers in 22 countries and counts more than 42,000 people within the extended family. By 2020, group turnover stood at more than €15 billion.
If the company’s size seems like an awkward fit with Jens’s intimate approach, talking to him quickly dispels any doubts. “You have to gain the trust of the people you want to work with, and that you want to provide value to,” he insists. “I think that applies in any relationship, including the way we run retail. And in order to gain trust, you need to talk to people. You need to feel them. You need to build an understanding of them – and that is certainly more difficult on Google Meet than it is if you get to have dinner with somebody or spend some time with them.
“The culture at Expert is very much based on human touch. Last year we and our board, which consists of representatives of five key countries, worked together to create a new strategic framework. We formulated an ambition around the concept of being real and relevant in every relationship we engage in, be that retailers with our consumers, or within the group with various partners, or with suppliers or stakeholders.
“It’s about being true to who we are. It’s about that human touch. And for me the essence of building trust is respecting the person you’re dealing with, but also being true to who you are.”
And after two years with the company – which, lest we forget, coincided with the toughest trading conditions in a generation – how is Jens coping with the switch from the traditional retail set-up he worked with at Intersport to Expert’s alliance model?
“In a way it’s an apple-and-pear comparison,” he says. “They’re both fruits but certainly different. I see the importance of local market adaptation as even more important on the technical consumer sites than on sporting goods.
“OK, there’s a lot of technical differences in the products we deal with, and we talk a lot about the global consumer, but in reality consumers in our field are different in different markets. We see it in purchasing behaviour. We see it obviously in things like buying power, because a lot of the products we deal with are investments for a household. And also how consumption reflects social life to a big extent.
“That was the interesting part during the pandemic. For instance, if you look to southern Europe, typically people socialise much more out of the home than they do in, say, Finland. And then when you force them to spend more time at home, they end up socialising more in the home and accordingly they spend their money differently, because suddenly buying more advanced appliances for the kitchen or a robot vacuum cleaner to ease the day becomes a topic. So in terms of understanding and accepting the local differences, this is probably the biggest lesson so far.”
If this interview were taking place on the morning of the Kindle’s debut back in 2007, you get the impression Jens would be singing the praises of print, reminding his audience of its tactile nature, the musty smell of the paper and the stylish way spines look when artfully shelved.
On the other hand, you can imagine him exalting the virtues of new electronic format, from its portability and convenience to its capacity to hold a library’s worth at any given moment. Far from simply hedging his bets, Jens is a firm believer in omnichannel thinking. Hence his enthusiasm at the omnichannel retail model that he and Expert are striving to build, with feet firmly astride the fence between online and the physical space.
“When we talk about growth from an organisational level it’s really about being able to transform,” he explains. “As a retailer, traditionally we have a very strong physical footprint, which we still have, but now with a very strongly growing online share too. We had Nielsen do research for us in six markets recently, and one of the things we asked consumers buying technical consumer goods was how do they predict their purchasing behaviour to be in the future? It was the same amount that said they intend to buy solely online as it was said they intend to buy only in-store.
“And in both cases it’s mid-single digits. So the majority are saying either: I’m going to be buying in equal measure online or offline; or I will be buying both but I have a slight tendency towards one. This cements our belief that physical retail is not dead, but at the same time, for a 600- or 700- or 800-square-metre store to fully meet consumer expectation in the future, it also needs to sell a wider assortment of things than they physically have on display.
“This is where the omnichannel transformation comes in, which is one of our key objectives. To transfer the organisation into a true omnichannel retailer is the best sense of growth we can see, because we focus on the needs of the consumer.”
As technology morphs and evolves at breakneck speed, repainting the social landscape, Jens insists consumers are becoming more cognisant of the power they wield in the marketplace – something he believes companies should welcome, not shut the door on.
“You can relate it to topics like sustainability or the environment or social justice, which of course are hugely important. But consumers are also beginning to be more aware of the choices they make in terms of what they buy and where they buy, and how it is impacting their local community,” he points out.
“In a transactional retail environment the focus becomes disproportionately on price, without people understanding that there is a consequence to that, and that is local business dying out. Meaning that where they live becomes less attractive, jobs disappear and so on.
“I’m not saying price is unimportant, because it is important. It’s important for all of us to provide value to our consumers. But I do think customers are slowly becoming more aware. I mean, look at craft beers, organic food and local restaurants. That aspect is something they are already leveraging in many countries, doing lots of advertising together with the retail constructs around buying local.
“Often consumers have this perception that if they buy online it’s not from their local retailer, it’s from some hidden entity somewhere. But if you look at work that has been done by our colleagues in several markets such as the Netherlands, Germany and Austria, they really advertise the understanding that if you buy online from Expert, you’re buying from your local retailer. You’re supporting your local retailer even if you go to one centralised website.”
If you hadn’t guessed already, a compassionate, humanitarian streak runs through Jens’s business ideology. When he talks about shop floor staff, he speaks of a societal need to “make these vocations attractive again”. He enthuses about “raising the social status” of employees beyond notions of salary. He boasts proudly of Expert being “a big educator”. He mentions the semantic difference between a minimum wage and a living wage. This is the kind of guy you’d like to work for; you want to go the extra mile on his behalf.
Social idealism aside, Jens still pays homage to the nuances of more prosaic retail issues, particularly Expert’s relationship with key partners and suppliers – a topic that regularly comes up in his conversation with The CEO Magazine.
“Retail is one of the overlooked value-adders in society in terms of how we drive development, how we fuel economic activities, and the massive employer that retail is.”
“Historically we at Expert have longstanding and strong relationships with the majority of our key support,” he says. “What is happening in several markets at the moment is that new partnerships, or new elements to an existing partnership, are being explored, going beyond the classic ‘you sell to me and I sell to the consumer’, and more about collaboration.
“There are obviously differences in retail, because we’re not always dealing with uniform products for technical reasons. We’re dealing with everything from a mobile phone cable to a fridge-freezer, which are very, very different in terms of logistics and handling. But from my perspective, working closely with suppliers in the future will be extremely important, and supply chain is a key part of that.”
According to Jens, one of the major reasons for this is because of the number and variety of products on offer to customers. “It’s natural in a business environment, especially when you seek to improve efficiencies in a retail sector with notoriously low margins, that you seek to improve the efficiencies of your assortment,” he shares.
“That’s a topic for lots of other retailers as well. Keep in mind that big-box competitors may face the challenge of having very big real estate to fill, and having to blow up their assortment. But we operate in most cases out of smaller retail outlets where the assortment has been curated to the local customer. So there is already that aspect of focus, but sometimes that is more on a local level than international level.
“At the same time, there is always balance. There are times when we see the need at national level to increase the overlaps that are already there, because the overlaps are driven by consumer demand, and we shouldn’t forget that.
“One thing that has been seen in markets where they have worked closely with suppliers on offering access to the entire assortment of the supplier – mirroring the inventory using omnichannel technologies – is consumers buying products you might not have expected. You cannot rationalise the assortment to the point where you’re centrally deciding everything, or you miss out on opportunities.”
At a time when business models are adapting to a post-COVID economy – one in which staff are increasingly working remotely, where digitalisation has been forcibly accelerated, where localisation is confronting globalisation, and where, pertinently, ecommerce is challenging bricks-and-mortar shopping – Jens retains unerring faith in the role of not just physical and local retail, but also retail as an existential concept, an essential cog in a bigger wheel.
“If we look at Expert, in a lot of markets it’s entrepreneurs behind the success, whether that is independent store owners, independent retailers collaborating through an alliance structure, or companies that have been built with blood, sweat and tears, and a huge amount of entrepreneurial engagement. Retail is one of the overlooked value-adders in society in terms of how we drive development, how we fuel economic activities, and the massive employer that retail is.
“We shouldn’t forget as well that if you look at your personal life and how you engage with technology, that has changed dramatically over the past 10–15 years. It’s an ongoing transformation. We sometimes need to take a little step back in the industry, to look at how we collaborate as retailers and suppliers to help improve society and the lives of the people we’re engaging with.”