Consumers in Scandinavia spent 54.54 billion dollars on online shopping in 2021. The Scandinavians were early adopters of internet technology and have in general become digitally mature. Find out what matters to online shoppers in Scandinavia in 2023.
Norway is one of the world’s most wealthy and tech-savvy countries with an online spending of 17.18 billion euros in 2021, in other words, an ideal target for eCommerce businesses. Discerning and quality-conscious consumers are looking for streamlined shopping experiences and innovative technologies that simplify their online shopping.
However, there are various signs that, after a long phase of double-digit growth, the boom in online retail may be over for the time being – and that the e-commerce industry will need to dial back its expectations going forward.
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The Scandinavian sprawling landscape lends themselves to the convenience of online shopping
In February 2022, the Salesforce Shopping Index, for example, was already reporting a 5% dip in worldwide online retail sales. Both Germany, the Netherlands and France reported drop in product sales for January to May 2022, but the turnover was still 15% higher than the same period in 2020.
Due to a big shift from physical stores to e-commerce well before 2020, around 9 in 20 Scandinavian consumers regularly engage in e-commerce.
Norway and Sweden’s population is denser in city centers, but the countries’ sprawling landscape lends themselves to the convenience of online shopping. Many shoppers are even willing to wait a little longer for delivery due to their rural or remote locations. But some of the largest local businesses are major players in the eCommerce space, which can make it difficult for emerging businesses to find a place within the Scandinavian eCommerce market.
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What Matters to Online Shoppers in Scandinavia in 2023? Read on…..
Scandinavian Consumers are happy to buy from other countries
The convenience for consumers supports the expectation that online retail will certainly continue to grow over the medium term. In a recent survey by the German association Bundesverband E-Commerce und Versandhandel (bevh), over two-thirds (68.2%) of respondents of all age groups felt that no longer being able to order online would impair their quality of life. In particular, the 40- to 49-year-old and the 60+ age groups could not imagine relinquishing online shopping. Scandinavian consumers are on the same wavelength.
It’s also important to realize that Scandinavian consumers are also happy to purchase from other countries. 80 to 90% of consumers across Scandinavia engage in “cross-border” e-commerce, and with Amazon now established in Sweden, in addition to already well-established players like Zalando, Wish, eBay and others, this trend is likely to continue.
Widespread smartphone usage
Norway was one of the first countries to use breakthrough 1G communication technology, leading to the mobile-centric culture we see today. Due to a combination of widespread smartphone usage and a healthy eCommerce marketplace, 53% of online transactions across the country are completed using a mobile device.
However, consumers not only expect providers to ensure the convenient supply of a wide range of goods but also to deliver a certain level of service – and respond to current challenges: climate change and a scarcity of resources influence our way of thinking. For example, the slow fashion trend is gaining traction, as is awareness of regional quality outside urban centers. Community-oriented platforms are influencing our buying behavior, and climate change and excess packaging are increasingly leaving online shoppers with a guilty conscience. This was highlighted back in June 2022 in the Seven Senders publication “Roadmap 2025: Sustainability in European e-commerce”.
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What Matters to Online Shoppers in Scandinavia in 2023? It’s more to come….
A whole array of consumer goods
A current study from Seven Senders investigates in detail how European online shoppers’ expectations of the perfect shopping experience have changed recently.
With more than 1,000 euros spent in an average year by Swedish online consumers alone (well above the European average) a whole array of consumer goods is purchased by Scandinavian consumers via e-commerce, such as fashion, groceries, literature and audiobooks, home furnishings, dietary supplements, medication and other pharmaceuticals, sports and leisure products, as well as movies and entertainment and much more.
It’s expected that the gap between desktop and mobile experiences will continue to widen across the globe as mobile technologies become more accessible, and you can reasonably expect that Scandinavia will be ahead of the curve. Businesses trying to break into the Scandinavian eCommerce market should focus on optimizing their sites and checkouts for mobile shopping experiences.
Most important factor – shipping costs
Scandinavian consumers still rate shipping costs as the most important factor when choosing one online store over another but they also seem to enjoy the convenience of having products delivered to them. The vast majority of Scandinavian consumers prefer to have things delivered to their homes or P.O. boxes.
Norwegian consumers typically look to support local brands even as they shop online, which creates another barrier for foreign eCommerce brands. However, high domestic prices often scare customers away. This means cross-border eCommerce stores might already have an “in” with Norwegian shoppers, in terms of pricing, and that’s the reason many Norwegians are shopping online cross-border.
By learning more about the expectations of your target groups (which can differ significantly from country to country), you can take these into account when passing on shipping costs and calculating prices, aiding customer satisfaction and retention. Therefore, it pays to research customer expectations separately in each target market. So, if you are looking to tailor your delivery terms to individual countries, it is advisable to reexamine customer opinions from time to time
30 to 60% of consumers across Scandinavia still prefer to use a debit or credit card to pay for their online purchases. Danes are the happiest to embrace mobile app payments, with nearly 2 in 10 consumers indicating such a preference – this figure is 1 in 10 in Sweden and Norway.
The B2B market
The B2B market seems to be booming across the world as businesses seek out platforms that help them keep up with rapidly evolving business environments. The B2B market in Norway is unique in that it is conducted on a highly personal level. What’s not unique is that, similar to other European markets, there are still hurdles in the B2B space for Norwegians to overcome, mostly related to complex industry pricing and the involvement of numerous third parties.
As far as indirect taxation goes, Norway is not a member of the European Union so it employs its own VAT scheme. B2C online sellers in Norway need to register with the VAT on eCommerce scheme (VOEC) when the sales made to Norwegian consumers in a 12-month period exceed NOK 50,000 ($5,700 US). For B2B online sales the reverse charge mechanism is employed, meaning no VAT is collected at checkout, but the buyer must provide a valid VAT ID.
The standard VAT rate in Norway is 25% with some categories like eBooks or audiobooks benefiting from no taxation at all.
The best way to overcome the challenges of trading across linguistic and cultural borders, is to have a partner that knows how to build those crucial bridges to close the gap and enable you to close the deal. If your company offers an affiliate program, Daily Scandinavian is happy to present your products and your company. Just contact us here.
What Matters to Online Shoppers in Scandinavia in 2023? Compiled by Tor Kjolberg