A low cloud hangs over the continent this dull autumn afternoon, but the chill in the air can’t suppress the warmth in Niclas Eriksson’s voice. “We’re opening three stores today,” the Managing Director of Elgiganten AB (Elgiganten) says excitedly. One in Lund, another in Västerås, and the third in Stockholm, which will be the first city-based concept store the electrical goods giant rolls out.

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In an era when the trend is for retailers to close their doors rather than open new ones, his enthusiasm needs no explanation. Yet, rather than a siloed approach to business, Niclas acknowledges that Elgiganten’s online presence and physical stores are actually interdependent.

“We see clearly that, from a customer perspective, there is a need to have a seamless combination of both channels, but approached from different angles and different needs,” he explains.

“If it’s a quick purchase, a simple product, you go online. It’s the method of convenience. But a lot of products in electrical retail are more advanced and you really need an expert to talk through your requirements – someone who will advise you on the right purchase.”

Elgiganten’s business is built on selling electronic equipment, but Niclas’s strategy is all heart. Having joined the company at the age of 21 in a part-time role, he has held positions such as store manager, marketing manager and operations manager on his journey to the executive suite.

The first move he initiated on his promotion to Managing Director in 2012 was to shift the emphasis away from price and over to people. “It’s been the main factor in our success, actually,” he reflects.

“For Elgiganten, the main two characters are our customers and our co-workers. Everything we do must be for their benefit – all of our meetings, all our training – it’s all about them.”

With a workforce of over 3,200, the transformation didn’t happen overnight. “It has been a daily process to focus on creating engagement in the stores and among the teams in the entire organisation,” he explains.

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Along the way, an important lesson has been learned. “This is more than a business; it has become a lifestyle. We’ve realised that how you interact with a customer has an impact that extends beyond the walls of the store,” he says.

After all, in our increasingly anonymous society, a simple hello from a stranger can often be the ingredient that brightens a day. “If you are met by a friendly face and a warm greeting, it puts you at ease and makes you more likely to talk, whether you are in a shop or on the subway,” Niclas affirms, who is speaking to The CEO Magazine from Elgiganten’s Kungsgatan branch in central Stockholm, where he has spent the day on the shop floor meeting customers.

“In society, we are no longer likely to say hello or really interact with each other, and I think we can change that,” he continues. “I think our people believe it as well, and not only in a business context but in terms of the bigger picture.”

If current figures are anything to go by, it would seem the feelings are reciprocated. “Every year, 85% of Swedes visit Elgiganten,” he reveals. “When we drill down to the detail to see how frequent those visits are, just four years ago we met a customer twice a year and then that increased to monthly.”

“Every year, 85% of Swedes visit Elgiganten.”

Today, he says, that figure is closer to every two weeks. And, while this may not have translated into a significant spike in revenue, he believes this increase does demonstrate the company’s importance in the entire customer decision-making process. “We need to be relevant in all three steps: before, during and after the purchase,” he says.

In its quest to become “the natural first choice for every customer in Sweden,” Niclas also explains how the scope of the business has widened. “What really matters for us is to have the right product at the best possible price, something which varies from customer to customer,” he says. Three years ago, Elgiganten stocked 7,000 products. “Today we are close to 40,000,” he smiles.

While its traditional selection of computers and home appliances remain bestsellers, the segments for B2B, gaming and kitchens are currently experiencing growth. In the latter, the company has started manufacturing its own brand.

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“We understand the challenges of buying kitchen appliances in one store and the cupboards and benchtops in another,” he says. “Now, we can offer everything.” Even the installation.

“It’s about introducing our customers to all the possibilities,” he continues. “How can digital products be combined in a new way to make your kitchen an even more wonderful place to come together with family and friends? Because the kitchen is more than a place to cook, it is a place where we spend time together. It’s the heart of the home.”

Heart is a word that peppers our conversation and, while Niclas acknowledges that he can’t escape the bottom line, he believes in viewing the numbers from a larger perspective. “Of course, price and product are important, but we try to present it in the context of how our products are so much more than a material thing. We demonstrate how they enhance your day-to-day life and how they allow people to connect to each other,” he explains.

“Of course, price and product are important, but we try to present it in the context of how our products are so much more than a material thing.”

Inevitably, such a customer-centric strategy has also brought about a transformation of its supplier relations. “We now tell our suppliers that when they launch a new product, they need to be able to explain to us the clear advantages of it. Brief bullet points are no use to us,” he says.

Tech jargon, he continues, has been replaced by tangible benefits. “At first, many suppliers were quite frustrated because pixels, for example, are quite cool to talk about. But, in reality, no-one understands what the term actually means,” he laughs.

  

In the family

     

Elgiganten’s parent company, Dixons Carphone, employs more than 42,000 people and owns 14 brands across eight European countries. Eight of these are in the UK and Ireland and include high street mainstays Carphone Warehouse and Currys PC World. Niclas explains that this larger network brings strength and global purchasing power. “But our owner understands the importance of a strong local focus as well,” he adds.

“Nowadays, they are really supportive and think about what the product really means for our customers instead of simply feeding us some numbers.”

Since his early days on the shop floor in 1995, selling fax machines and other pieces of now-obsolete technology, Elgiganten’s business has changed dramatically. But, in this age of Artificial Intelligence, where does Niclas think the company will be in five years?

“I think we will be totally seamless between all our channels,” he responds. “The products will be different, which will make it even more imperative to have really good knowledge and understanding of the customers’ needs.”

Continuing to remain relevant to the customer, he affirms, is the secret to tomorrow’s success. “You really need to be where the customer is. You cannot demand that the customer goes wherever you want them to. You need to be where they are.”

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