Big challenges for retail

Over the next ten years the retail sector will change more than over the past 100. With a million customers daily and eight companies in the Group, including Åhléns and Axfood, Mia Brunell Livfors, CEO of Axel Johnson, is right in the eye of the storm.
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“The key to success is the capacity for change. We have to reach our customers; they want to shop no matter where or how,” said Mia Brunell Livfors at a breakfast seminar at IVA.

To succeed, what is needed is a good understanding of the trends that are shaking the retail sector at its foundations.

“The power has shifted to the customers. They have all the information at their fingertips online and can make comparisons. The platform economy with marketplaces like Alibaba and Amazon that don’t have their own products is also a strong trend.”

We are also seeing a blurring of the lines between different industries. A restaurant might want to be a store as well, and the result is that customers can buy the same product in many different places.

“Consumption is becoming increasingly values-driven. Customers are carefully checking if a product is OK from, for example, a sustainability perspective. This trend is affecting all areas.”

Even though online shopping is an ever growing force, Brunell Livfors doesn’t think that physical stores are doomed.

“Customers want to shop in both physical stores and online. Just over one third of what a customer purchases in a store they have first checked out online. The opposite scenario is also quite common.”

Opening a physical store in an area of a city also increases online shopping in the same place.

“If a supermarket moves out of an area all retail in that area is affected and online shopping goes down as well.”

Sweden is different from many other countries in terms of consumption.

“We have not experienced an economic crisis in 25 years that has impacted private consumption. But an increase in interest rates may do that.”

According to Brunell Livfors, interest in digital retail increases during a crisis. To address this trend as well as the discount retail one, Åhléns will open an outlet this spring.

She points out that the total number of physical stores in Sweden reached its peak in 2016. But she doesn’t predict a trend like the one in the USA, where whole city centres are now deserted.

“Society in general is not really adjusting to the consequences of having fewer stores. And new retails space is still being planned and built. It doesn’t add up.”

Axel Johnson, on the other hand, is adapting for the future.

“In ten years half of our business will consist of things we are not doing today. But will that be enough? We are currently running around 200 digital projects. And we’re testing various business models. It’s good that we’re financially strong so we can do that.”

The offering that will attract customers to the Åhléns of the future will be different from the one it has today.

“Åhléns City in Stockholm will have more activities and services. We want people to want to hang out there for a while. And the fact that we’ve closed some department stores around Sweden doesn’t necessarily mean that we’ll continue on that path.” 

Contact information

Linda Olsson
Project Manager
Phone +46 8-791 29 06