Building Scandinavias smartest shopping mall
Nordby Shoppingcenter is a shopping mall located on the Westcoast of Sweden, close to the E6 highway and the Norwegian border, 20 km north of the town of Strömstad. It is the first shopping mall in Sweden built specifically to serve customers in Norway travelling across the border to save money on buying food, candy, beverages and other products that are significantly cheaper in Sweden.
This border trade is primarily a result of Norwegian tax policies that serves to protect domestic producers from cheap imports and has created an industry reaching almost 14 billion in sales every year. The largest trade area is located in Svinesund and Strömstad, approximately 120 km south of the Norwegian capital Oslo, close to the largest populated area in Norway. It has not been without controversy and many call it “Harry handel”, a description referring to a clientele mostly made up of greasers and low income families shopping cheap, low quality goods in shady outlets.
Insight – what we found out
The ambition with Nordby Shoppingcenter was to explore the trade even further by offering Norwegian consumers 42 stores and 30 000 square meters of merchandising space with all the comforts and services of a modern shopping mall. But establishing a business of this size entirely based on price differences between two countries, located as far as 120 km from some of its most important customers, has its challenges.
Firstly, most stores in Sweden don’t offer a distinct price advantage to Norwegian customers, making the line between success and failure thin, which many commercial developers trying to establish themselves in the area have learned.
Secondly, even though you can save a significant amount of money on number of products in Sweden, particularly food items, price differences vary depending on the exchange rate, the time of season, the rate of inflation and from store to store, making it difficult to make relevant price comparisons.
Thirdly, products like alcohol and tobacco, with comparatively large price differences between the countries, can’t be communicated at all due to regulations in both Sweden and Norway. Liquor stores are also established with a strict policy of keeping consumption to a minimum.
Last but not least, stores located in Sweden targeting Norwegian customers in Norway, will have to rely entirely on their own marketing efforts since the marketing done by their principals in Sweden, does not reach customers living in Norway. Vice versa, marketing done by the same principals for stores located in Norway does not apply to stores in Sweden. This meant that the success of each store at Nordby would depend heavily on the marketing done by the mall, who had to operate with half the marketing budget of their competitors in Norway.
Focus – what we proposed
In the spring of 2004 we were contacted by the newly appointed manager of the mall to come up with a master plan for the launch and the years ahead.
Since Norwegians had been travelling across the border to buy food, candy and other affordable goods in Sweden for decades, our conclusion was that to be able to compete successfully with established outlets as well as local malls in Norway, we needed to focus on the things that made Nordby different; 42 stores gathered under one roof offering the same comfort and services as malls in Norway as well as great savings on food and other typical border trade goods. In addition, the stores and assortment you find in Sweden differ from Norway, adding an exotic flavour to the shopping experience.
In the light of this conclusion, our first course of action was to develop a strategy for the brand, defining a mission, a vision and a proposition that would help focus our message and marketing efforts.
Through research and price comparisons regularly made by VG, one of the largest newspapers in Norway, we found that an average family could save more than 40 % on their food budget, or almost 1 500 Norwegian crowns on just one visit to Nordby, equalling savings of up to 20 000 a year depending on how frequently they visited. Money that could be spent on other items the family needed.
The mission we arrived at was that Nordby Shoppingcenter would help people in general and families in particular, to spend their money more wisely and get more out of their household budget by making big savings on food and buying all the other things the family needed at Nordby for the money they were saving.
The vision was that Nordby Shoppingcenter would be the preferred destination for families in Norway looking for a smart way to spend their money.
The proposition was: Everything you need at prices you can afford.
Action – what we did
We arrived at a marketing plan that would be launched in 3 stages:
Stage 1: Build awareness around the opening of this new destination for Norwegian families eager to save money, letting them know that you now can buy all the items your family needs in a comfortable shopping environment.
To build awareness we started by pushing aggressive messages on savings using boards, inserts and ads in medias all across the 6 counties Nordby was targeting.
Stage 2: Build on the momentum created in the first stage by communicating the large diversity of stores found at Nordby, with everything from food and candy to fashion, accessories, interior decoration, fitness and health products, books, home electronics, appliances and more.
When we reached a high level of awareness, we turned more of our efforts to owned media, building knowledge and trust by pulling them into the website through online ads and social media.
Stage 3: Keep the momentum going with a steady flow of products and offerings that help save money and get more out of the family’s household budget.
Using the website as a digital hub, we connected all the stores to relevant touchpoints, creating a steady flow of diverse offerings and money saving tips through owned, earned and paid media.
Result – how it all turned out
Nordby Shoppingcenter has since the launch in 2004 grown from 42 stores and sales reaching SEK 400 million during the first year to one of the largest shopping malls in Scandinavia with more than 100 stores, 7 million visitors each year and sales reaching over SEK 4 billion.