Verkkokauppa.com’s secret to a successful e-commerce renewal: Broaden your horizons but stay loyal to your most important customer segment
Verkkokauppa.com is the biggest online retailer and consumer electronics retailer in Finland. It has had a loyal and satisfied core customer group of technology experts for thirty years. After extensive research into potential customer segments, the company has now added several new customer profiles to its target market and aims to deliver quality service with a renewed customer experience.
For Verkkokauppa.com, their website is not just a channel; it’s the channel. Their site affects 98% of purchase journeys, and over 60% of revenue comes through it.
Verkkokauppa.com has its own technology stack, where all operations are built around an e-commerce solution: Data and process transparency are well executed and everything the customer sees on the site is connected to the underlying system in real-time.
Pekka Litmanen joined Verkkokauppa.com’s team two years ago. As Chief Experience Officer, he’s responsible for sales in all their channels.
“My focus has always been on the customers – trying to find ways to connect their needs to the needs of the company”, Litmanen says.
“We’ve been very good at serving a certain type of customer demographic: the expert. That’s someone interested in technology who likes gadgets and knows what they’re looking for. Most of the employees and even the company’s founder Samuli Seppälä fit this customer profile well.”
Although Verkkokauppa.com enjoyed high customer loyalty and satisfaction when Litmanen joined, the unilateral target group was limiting their potential.
Many associate Verkkokauppa.com solely with consumer electronics: smartphones, computers, home electronics, and appliances. In addition, Verkkokauppa.com has a wide selection of items in, e.g., outdoor activities, babycare, children, baking, and has even piloted with Bajamajas.
“What people often don’t know is the amplitude of our selection. So although our revenue was already 500 million, with our substantial basket size our sales had room to grow way beyond the expert profile.”
Overlooking important customer groups leaves money on the table
Before Verkkokauppa.com started its customer experience renewal, it segmented its market. From the multiple ways of doing this, Verkkokauppa.com chose clustering analysis that combines consumers’ motivations, needs, and values. This data was quantified to publicly available market data.
“Customer segmentation should not be done through the lenses of a single department or project. The whole company from marketing, sales, offering, and all the way to the supply chain needs to have a shared understanding of who the customer is”, says Litmanen.
The renewal was done piece by piece while operating business as usual.
The company set two types of intentions: goals for what the customer gets and goals for internal objectives. The vision for Verkkokauppa.com’s customer experience stated that Verkkokauppa.com should be inspiring and personal and yet reliable, easy, and fast.
Internally, the company wanted to support their business’s critical key performance indicators, such as conversion and retention, and simplify adding to the assortment.
“In addition to the expert customer profile, we found 5 other segments: the aesthetics, the socials, the non-consumers, the optimists, and the responsibles. Two to three of these were perfect fits for us, and we chose those as our lead segments in addition to the expert customer. Now, instead of only one, we have three to four key personas to consider”, Litmanen says.
Once the company had done the segmentation, they started linking segments to customer pains and gains. Verkkokauppa.com carefully mapped the customer experience through the lens of each customer persona.
Once the current state and desired results of the customer experience had been determined, the e-commerce team started mapping features and ideas. They defined the ideal customer journey, and the solution space for each phase was mapped: from awareness, inspiration, and finding products to evaluating them, making an order, receiving products and using them. Finally, outcomes were prioritised.
Don’t be shy to publish new things – let the customer feedback guide you
Although the first phase of the development process was dedicated to the problem-solution space, the company wanted to begin implementation as soon as possible. Starting from the second increment, the development team completed the finished designs and put them into A/B testing.
Litmanen emphasises that getting customer feedback as early as possible is crucial – it will guide you.
“If you’re not a little ashamed of what you’re putting out there, you’re doing it wrong. You can dive deeper into use cases, variances, and the last bits of finesse when you already have things in production”, Litmanen says.
“As soon as you have some sort of a vision for your customer experience, try to make it concrete, into something that is clickable and easy to share among stakeholders. It enables conversation around your vision.”
Eventually, Verkkokauppa.com ended up revising almost their whole site. Navigation, front page, category pages, product listing pages, content concepts, content design, brand page concepts, and brand page design have all been renewed – along with some bonus features, such as simplified checkout and product comparison and an expert chat where the customer can get help with their needs from Verkkokauppa.com’s salespersons.
Along the way, the company naturally updated the way it functions. The e-commerce team’s operating model was updated, and the team was introduced to a new content management system. The operational improvements have allowed business to maintain the site while technology teams focus on more important things.
As an outcome of the renewal, Verkkokauppa.com was able to tap into new market potential. To summarise their road to this, Litmanen talks about three things:
1. Don’t be product centric
Your website should be more than a fantastic product catalog. Otherwise, customers only come to your site when they already know what they want. The customer journey starts long before that. If you don’t provide inspiration and guidance regarding solutions on your site, the potential customers won’t end up there.
2. Focus on customer journeys
Having your product categories and content individually dispersed over the site will not provide the best experience. You need to have carefully curated customer journeys. Otherwise, your products will be hard to find. Spending all your money on incredible buying guides is pointless if no one reads them.
3. Challenge the technical approach
If you treat your primary sales channel as a technical work of art, its features and performance will fall short. If you want to serve a substantial customer base, consider who your customer is. You might have an intuitive thought about your lead customer persona, but you need to research who else buys from you and why. Otherwise, you’re leaving money on the table.
Join Qvik’s next Digital Product meetup?
This article is based on Qvik’s Digital Product Meetup held at Qvik’s office on October 5th. The DiP meetups are a place for product managers, product owners and people in product management to discuss and learn about relevant themes.
The next meetup will be an afterwork event on November 5th. There Emilia Ala-Kurikka, the Product Lead of S-kaupat, will share insights on how a common vision and shared goals enabled S-kaupat to reach market leader position in food e-commerce and what S-kaupat’s development model is like.