THE SWEDISH CHAMBER OF COMMERCE FOR THE UK SEPTEMBER 2016
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The LINK ABOUT
The Swedish Chamber of Commerce was founded in 1906 and is a not for profit membership organisation aimed at promoting the exchange of ideas and experiences, networking and trade between Sweden and the United Kingdom. Today, the Chamber is one of the largest foreign Chambers in the UK, with approximately 400 Member companies. It is also one of the most active Chambers, hosting approximately 70 events per year.
EDITORS OF THE LINK
THE LINK MAGAZINE: 37 YEARS OF LINKING ANGLO-SWEDISH BUSINESS The LINK celebrated 30 years in 2009 and its 300th issue in June 2011. The publication is distributed free of charge and the readership includes business executives and other staff (incl. MDs, CEOs, Directors and Managers at various levels) at our 400 member companies, prospects, general contacts, other Chambers of Commerce in Sweden and the UK, Swedish Consuls and diplomats, journalists, correspondents and other members of the press. Members of the Young Professionals are also included in the readership. The LINK is edited by the Anders Wall and the Investor Scholar.
JOHANNA BJARSCH FOLLIN INVESTOR SCHOLAR BJARSCH@SCC.ORG.UK
FANNY SILTBERG ANDERS WALL SCHOLAR SILTBERG@SCC.ORG.UK
The LINK is an invaluable tool for companies wishing to promote their products and/or services to a unique target group of professionals and key stakeholders within Anglo-Swedish trade and business. If you are interested in advertising, please contact Rebecca Martin; Communications Manager (martin@scc.org.uk).
YOUNG PROFESSIONALS OF THE SWEDISH CHAMBER OF COMMERCE FOR THE UK The Young Professionals of the Swedish Chamber of Commerce for the UK (YP) is a sub-organisation of the Swedish Chamber of Commerce. Founded in 1994, the Young Professionals boast around 250 Members aged 25 to 35 years. The organisation is dynamic and includes an agenda planned to meet the Members’ interests. It has become a well-known networking organisation for young professionals with an interest in Sweden and the UK.
NOT A MEMBER YET? Visit www.scc.org.uk or contact the Secretariat on +44 (0)20 7224 8001/ email info@scc.org.uk
MIKAEL ANGESJO ASSISTANT DIRECTOR ANGESJO@SCC.ORG.UK ULLA NILSSON MANAGING DIRECTOR NILSSON@SCC.ORG.UK
EBBA WIBERG EVENTS MANAGER WIBERG@SCC.ORG.UK
REBECCA MARTIN COMMUNICATIONS MANAGER MARTIN@SCC.ORG.UK
ELIN HAMMENFORS LUND UNIVERSITY SCHOLAR HAMMENFORS@SCC.ORG.UK
PETER MCNAMEE ACCOUNTANT MCNAMEE@SCC.ORG.UK
LOVISA BERGSTRÖM INTERN BERGSTROM@SCC.ORG.UK
STEFAN WESTMAN STENA LINE SCHOLAR WESTMAN@SCC.ORG.UK
GUSTAV OLSSON INTERN OLSSON@SCC.ORG.UK
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Photo: Suchat Sae-urng/123rf.com
The LINK FEATURE
THE BACKEND OF RETAIL 6
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dvertising and commercials have long since become stapleware in our modern consumption society, and even though we practically take it for granted, we are still affected by it. This might be an obvious statement to most of us, in the same way that we have all heard that the reason why milk is always placed at the inner corner of the supermarket is for us to pick up some extra goods on the way there. The same goes for those tempting sweets that are always conveniently located right by the check-out, which makes it so easy to sneak a chocolate bar into the cart just before it is time to pay. So store layout and advertising affect our purchase decisions on a daily basis. But what about everything else? Just as there is no coincidence that milk and sweets are strategically placed in the supermarket, there is a strategic thought behind everything that involves our shopping experiences. The how, the what and the when - nothing is a coincidence in retail. In this feature we dive into the back-end of retail and take a closer look at the companies behind some of our purchase decisions, and give an update on fresh research findings on the area. Who and what actually affect what you buy? As it turns out, delivery method, packaging and lighting all have a lot to do with it. SIGNED, SEALED, DELIVERED Long gone are the days when you ordered clothes from a catalogue, then
waited for weeks until you finally received a pick-up slip and could make your way to the Post Office to collect your delivery in great anticipation. Only to find out that the sweater you bought was too small, or the shoes the wrong colour. Today, this process has been shortened considerably, it usually only takes a couple of clicks. One of the companies responsible for that is Urb-it, a Stockholm born company that has developed a new way of shopping in the urban landscape. “We enable consumers to get their online purchases immediately, either through our app or through our integrated retail partners,” Sara Ek, Head of International Expansion tells The Link.
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Urb-it is not a shipping method, but a complete shopping experience”
Urb-it’s business model is centered around the idea of being able to buy things on a whim. Customers use the app or a retailer’s online store to buy something, a pair of shoes for example. But instead of ordering it home, or visiting the store to pick it up, Urb-It works with crowdsourced “Urbers”; people who pick up the order by foot, bike or by using public transport. Then they simply deliver it to where you are. In that sense, Urbit is not so much of a delivery method, as a shopping experience in its own right according to Ek.
“We are a smart shopping service that you can use when you don’t have the time or energy to go shopping, when you forgot something or when you just want to treat yourself to some extra convenience,” she explains. “This is something that none of the traditional shipping alternatives can do, hence Urb-it is not a shipping method, but a complete shopping experience. “ Sara Rosengren is Associate Professor at Stockholm School of Economics and Head of Research at their Centre for Retailing (CFR), where a large part of the retail research in Sweden is conducted. She agrees that shopping as an experience is a more widespread phenomenon today. In the nineties, the so called experience economy was established more firmly, predominantly in the service sector through restaurants and museums and the like, while retailers kept doing things the way they always had. It is as the threat, or challenges, from the internet have become more prominent that the retail industry has started to adopt the concept. “Retailers have developed more experience based content, for example through add-on services to their products,” Rosengren tells the Link. It is exactly that kind of service that Urbit provides. Ek thinks that it will become even more important for stores to sell an experience rather than a product in the future. “Urb-it contributes to this by being the extension of the store and bringing the
Urb-it has paved the way for a completely new shopping experience
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brand all the way to the consumer in a personal and convenient way,” she says. But their service also has bearing on the actual purchase process of the consumer. Ek explains that many customers today abandon their shopping carts because the retailer doesn’t offer enough delivery alternatives for example, a scenario where the convenience of a service like Urb-It arguably is hard to beat. Ek also describes a different scenario that most of us can probably relate to - the “should I, or shouldn’t I buy it” conundrum: “Imagine that you try something on but you aren’t 100% sure if you want to buy it at the moment. So you leave the store and then you regret not buying it. In that case, with Urb-It, you could just pick up your phone and buy the product from our app,” she tells The LINK.
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For some brands, a unique packaging is everything, and it is what consumers think of when relating to their particular brand”
Another shift that is becoming increasingly apparent in the retail industry, is how informed the customer is before buying a product. Ek explains how the traffic to physical stores has decreased over the last year while the retail sales levels have remained the same. It has to do with the fact that the purchase decision has, to a higher extent than before, already been made before entering the store. “People are referring to ROBBIS Research Online but Buys in Stores, unplanned purchases decrease as the consumers do more research online and the retailers need to affect the consumers earlier and find new interaction points”, Ek tells The Link. This is something that is also echoed by research. Ten to fifteen years ago, a shop was a means for the customer to understand the supply and actually choose a product. Today, consumers arrive to the physical shop setting with an informed plan on what they are buying, the options have already been scanned online.
“The customers of today have grown considerably more informed and knowledgeable of the products that they purchase, as the internet and other sources of information have allowed them to do so,” Rosengren explains.
In this respect, packaging can be seen as a communication channel for companies, an extension of their graphic brand and indentity. But Magnusson knows that even though looks go a long way, the functionality of packaging also has a strong impact on the consumer.
PACKING IT RIGHT In the 60’s, Andy Warhol made a name for himself by turning plain soup canisters into art. The mundane red and white aluminium suddenly became something valuable in their own right, something worth throwing a second glance at.
“Great design not only graphically but also structurally is essential. Packaging needs to not only look pleasing to the eye, nowadays it also needs to serve a function to stand out,” he explains.
Since then, a lot has happened, and turning packaging into an art form is far from something that is reserved only for the avant garde. The packaging of a product is one of the most important branding outlet for retailers today and it is something that Swedbrand, a Swedish packaging company, has built their business around since 2006. Swedbrand is today a global company with headquarters in Shanghai and offices spread across the globe. The core of the business however, is universal; to strengthen the brands they work with, both in packaging and in the retail environment they operate in. “We turn complex projects into easy processes for our clients, integrating contemporary design with the highest quality production,” Chris Magnusson, founder and Director of Swedbrand tells The Link. It is a service that is in high demand. Many of Swedbrand’s customers work actively to develop their packaging in order to drive traffic towards their brand. “For some brands, unique packaging is everything, and it is what consumers think of when relating to that particular brand,” says Magnusson. Sara Rosengren at Stockholm School of Economics agrees that packaging has a large impact on consumer behaviour, especially in the Fast Moving Consumer Goods market. “The lion’s share of purchase decisions are made in the actual store when it comes to consumer goods and in that scenario, packaging becomes an important communication channel for the suppliers to stand out and be chosen,” she says.
Simply put, it is not just the look of a box that matters, it is also what the box can do that can tip the scales in favour of a purchase. One of Swedbrand’s business areas, Swedbrand Innovations, solely focuses on these issues. In order to achieve growth, the ability to innovate is essential, and the goal is to launch one to two new patented technologies each year. The latest outcome from Swedbrand Innovation is the Topflow technology, a mechanism that quite literally puts everything about wine box packaging on end. A plate in the bottom of the box is attached to a spring that pushes the wine towards the top. In this way, all the wine can be squeezed out of the bag to the last drop, and the glass can be put directly under the nozzle.
LET THERE BE LIGHT In the winter of 1943, Bertil Svensson’s mother was struggling. As the Nordic nights grew darker in the town of Fagerhult, she had a hard time knitting once the sun had set, and it bothered her. Luckily, Bertil was not slow to come up with a solution, and he built a lamp for his mother to sit by as the natural lights grew dim. A new Swedish company was born and in 1945, the first factory was opened in Fagerhult. Today, the Fagerhult Group is one of Europe’s largest light manufacturers, producing professional lighting systems for public environments, both indoors and outdoors, with more than 2,200 employees in 22 locations around the world. Anyyone who has ever stood in a changing room cursing the unflattering beams of fluorescent lights, knows that lighting can make or break a shopping experience.
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Lighting can be used within a store to aid navigation and to draw the customers’ eyes onto feature products and displays”
Daniel Swannack, UK Retail Sales and Marketing Director at Fagerhult Group is well aware of the power that lighting possesses in the retail setting. “Lighting design is a key factor in creating a brand’s desired look and feel throughout a retail space. For instance, the lighting within a changing room can be key to ensuring a customer looks and feels the best they possibly can. Lighting, if done correctly, can have a positive effect on the sales within a store and has been proven to increase the browsing durations of customers,” he tells The LINK. Store lighting is the kind of thing that is most successful when it feels so natural that you don’t have to pay it any mind. But as with both packaging and delivery methods, it still affects us greatly when we shop, and when used correctly it can even tell us what to do. “Lighting can be used within a store to aid navigation and to draw the customer’s eyes onto feature products and displays,” Swannack explains. One example is the Monsoon store in Westfield shopping centre in West London, where Fagerhult is responsible for the lighting. The end result is achieved through a careful process of technology and experimentation. “There are many factors to consider when designing a scheme for retail; each aspect of the light should complement a brand’s image, colour pallet and store design. To achieve a fully tailored lighting design we need to carefully select the colour rendering index and correlated colour temperature of our LEDs before implementing techniques to create contrast and suitable light levels throughout,” Swannack says. There are those who argue that there is no such thing as free will, and given the intricate mechanisms in retail, when it comes to our shopping, perhaps there isn’t. When it comes to what makes us buy, there is always more to it than meets the eye. So the next time you give into the craving of buying that little chocolate bar by the till, don’t be so hard on yourself - blame it on the back-end of retail.
Store display with lighting done by Fagerhult
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BACK TO THE FUTURE The Chamber Looks Ahead
Since its inception in 1906, the Swedish Chamber of Commerce has grown into one of the largest and most active foreign Chambers in the UK. This year, the Chamber is celebrating its 110th anniversary and this will be acknowledged during the year through articles highlighting the Chamber’s history. In this fifth and final Jubilee Article, we focus on the years ahead of us, and what role The Chamber should play in an ever changing future.
WORDS: FANNY SILTBERG
Throughout the last four issues of The LINK, we have been guiding you along memory lane through a 110 year long history that started with the Chamber’s inception in 1906 and continued for a century through prosperous times and hardships, financial crisis, expansion and development. And so here we are, in 2016, far from at the end of our journey. It is time to look at the future, and what it might have in store for a Chamber of Commerce in the 21st century.
two companies can receive from one another doesn’t become apparent until they are introduced to each other, and that is why the Chamber has such an important role in facilitating these connections.
On 14 September, the Jubilee Celebrations culminated in a magnificent gala at the new Switch House of Tate Modern in London. As the sun set over the Thames, guests arrived to listen to an inspiring speech by Jacob Wallenberg, and to see Spotify, Kopparberg and Max Martin receiving awards for each being a pride for Sweden in their own right. The evening saw young mix with old, startups meeting established businesses, and royalty and ambassadors mingle with the entrepreneurs of tomorrow. Mikael Angesjö, Assistant Director of the Swedish Chamber, thinks the night was an embodiment of the very essence of the Chamber’s function.
“It is only in these unique meetings that people suddenly realise how size and experience can be traded for disruptive thinking and innovation in the latest technology. It is that kind of platform that we have to be and should be. That is what the Chamber is.” he says.
“There is no other natural meeting place where people from old and traditional financial and manufacturing industries can meet new, innovative businesses from the tech and creative industries. We have created one of very few platforms where they get a chance to interact with one another.” he tells The LINK. Angesjö goes on to explain how this is also a very important goal for the Chamber as a whole, and how, by connecting people and industries that rarely connect in daily business life, the aim is to create the highest possible value for everyone involved. Often, he explains, the immense exchange
The examples are many. In recent years, The Chamber has directly or indirectly been behind collaborations between Salta Tours and Skanska, Trowers & Hamlins and Vistra and Stockholm Deli and Rekorderlig Cider, to name but a few. Translating human meetings into value in pounds and pennies is not always easy, but looking at the collaborations that The Chamber has helped to create
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THERE IS NO OTHER NATURAL MEETING PLACE WHERE PEOPLE FROM TRADITIONAL INDUSTRIES CAN MEET NEW, INNOVATIVE BUSINESSES.
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is a strong testament as to how great connections can indeed be invaluable. The goals for the future are clear - to keep on diversifying the network and enable all Members to capitalize on their membership in order to see new possibilities where they least expect it and find the collaborators to help realise them. For the past 110 years, The Chamber has worked ceaselessly to build an ever more representative mirror image of the business community around us. For the next 110 years to come, we are happy that you have joined us on this journey to engage, network, discover and connect.
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NEW KID ON THE BLOCK.
In the wake of the digital currency Bitcoin’s failure, the world has instead turned its eyes to blockchain, the underlying technology behind bitcoin. Where some hail it as the next technology revolution - a means to a new democratic and transparent world order where banks are rendered obsolete - others scoff at the mere thought of the blockchain becoming anything more than a feverish fantasy for coders and cryptocurrency enthusiasts. Is there a future for “The Internet of Value”? The LINK tries to find out what is what in the world of blockchain.
Blockchain Technology - Road to Revolution or Financial Fairytale? WORDS: FANNY SILTBERG
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But why do we have intermediaries such as banks in the first place? Simple, it is all down to trust. In order for us to want to give away our money, we need some kind of entity that can validate and manage transactions. We trust them to guarantee that our money end up where it should, to the right person and without being corrupted in some way.
n late 2008, as the world was trying to come to terms with the financial crisis, a certain Satoshi Nakamoto published a paper called “Bitcoin P2P e-cash paper”. It came to be the foundation of Bitcoin, a so called cryptocurrency that not only caught the attention of the whole world, but promised a revolution of the monetary system. However, the years that followed didn’t fall out as expected, and today it is quite clear that Bitcoin wasn’t all that it promised to be. But in recent years, the technology behind it, blockchain, has increasingly come into focus. And it is gathering up a storm of attention within the fintech industries. But why, you may venture to ask.
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So, if blockchain works without any intermediates or middlemen, how can we trust it? The answer is “mining”. The mining computers, or miners, collect the transaction history into blocks and once a block is finished, transform them into a mathematical puzzle. Then the “mining” begins. To validate the block and the transactions it contains, all miners compete to solve these mathematical puzzles. The first one to solve it, notifies the rest of the miners, who control that the calculation is true. Once this is done, the block is approved and is added to the chain. In this way, a chronological chain of blocks is created, where each block is time stamped and validated individually.
Before answering that question, let’s look at the basics of how a blockchain actually works. In the same way that internet is a transmitter of information and data, blockchain is a way of transmitting assets. For the bitcoin, it was used to trade and transfer currency, but it can also be used for sending money, carrying out transactions, and for foreign exchange trading. For those of us less enlightened in the backend of digital solutions, it is not the most straightforward process to understand. The short explanation is this: blockchain is a publically shared, transparent ledger of transaction records that enables secure peer to peer transactions without the interference of middlemen. Let’s look at an example of a simple purchase process and how it would work on a blockchain. As the name suggests, it is a chain of blocks. Each block contains 10 minutes of transaction history, and is connected in chronological order to all blocks before and after it in the chain. It is, in other words, a ledger of transactions. This is a function that our banks provide today, together with a number of other actors who are involved each time we make a purchase. But unlike a traditional bank, whose ledgers are centralised, the blockchain ledger is distributed on thousands of specialised computers around the world, so called mining computers.
“UNLIKE A TRADITIONAL BANK, WHOSE LEDGERS ARE CENTRALISED, THE BLOCKCHAIN LEDGER IS DISTRIBUTED ON THOUSANDS OF SPECIALISED COMPUTERS AROUND THE WORLD, SO CALLED MINING COMPUTERS. ”
The process continues and the chain grows as miners direct their attention to the next block of transaction that has aggregated in the meantime. This process continues to form an ever growing ledger of transactions - the blockchain, and the transactions are carried out and validated without passing any kind of centralised middleman. It is instead the mathematical puzzle solving, the miners, that protect the blockchain network. In order to hack a transaction, a hacker would need to hack not only all the blocks leading back to the transaction in question, i.e the entire history of commerce, but also do it on more than 50% of the connected mining computers simultaneously, since the ledger is distributed on thousands of computers across the world. No mean feat to say the least. Given the above, it is easier to see why the arrival of blockchain has put the financial industry on the edge of their seats. It has the potential of opening up a world of possibilities in terms of time saving, participation and personal integrity.
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The fact that the middleman is cut out has several positive implications according to blockchain proponents. Don Tapscott, author of the book “Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business and the World” calls Blockchain The internet of Value and is one of the more prominent enthusiasts of blockchain. He argues that blockchain can bring prosperity through a truly shared economy and personal data control among other things. He describes how, in his view, shared economy celebrities like Uber, AirBnb and Lyft, aren’t successful because they share and spread the profit as the term “sharing economy” suggests, but rather because they have aggregated services together and then sell them. The capitalisation is still centralised. “What if, rather than Airbnb being a $25 billion corporation, there was a distributed application on a blockchain that was essentially owned by all of the people who have a room to rent? And when someone wants to rent a room, they go onto the blockchain database and it helps them find the right room, and then the blockchain helps with the contracting, it identifies the party, it handles the payments just through digital payments -- they’re built into the system. So, the big sharing-economy disruptors in Silicon Valley could be disrupted, and this would be good for prosperity”, he said in his TED Talk from June this year. The financial industry hasn’t been slow to jump on the bandwagon either. Goldman Sachs recently filed a patent in the hope of being able to facilitating foreign exchange trade via blockchain. The transaction process of today is a rather cumbersome one, where a party’s funds are held up in an intermediary’s transit until the counterpart has provided theirs. This can take up to a day, which means that the foreign exchange market is not as efficient as it could be. “But to me, the blockchain, the underlying technology, is the biggest innovation in computer science - the idea of a distributed database where trust is established through mass collaboration and clever code rather than through
a powerful institution that does the authentication and the settlement”, Don Tapscott writes in a report for McKinsey. Of course, even a rose has its thorns and the blockchain technology has by no means gone uncriticised. Ian Harper and Peter Evans-Greenwood work for The Centre of the Edge, a Deloitte department focusing on digital trends. They shed some balance to what they call the blockchain hype.
“SO, THE BIG SHARING ECONOMY DISRUPTORS IN SILICON VALLEY COULD BE DISRUPTED, AND THIS WOULD BE GOOD FOR PROSPERITY.”
“The challenge is that blockchain is a limited technology. Bitcoin – the genesis of the technology – can only process a few transactions a second and is already struggling with performance limitations. This problem is compounded by enthusiastic marketing where the term ‘blockchain’ is being stretched so thin it has become nebulous”, they state in a report published earlier in 2016. An even bigger issue perhaps, is the fact that blockchain lacks a governing body. As the internet was established round the world, several organisation revolved it that made sure that there were some sort of guidelines in place, for example The Internet Corporation for Numbers and Names who controls web domains. The problem with blockchain, being open source and distributed worldwide, is that it lacks that stability and direction. Tapscott himself sees this as one of the biggest issues and describes it as being a complete Wild West. Many associate Bitcoin with illegal activity, something that contributes to the scepticism. But despite the many challenges ahead, many financial institutions seem to take the blockchain seriously enough to at least give it a try. JP Morgan, Goldman Sachs and Santander are just a few big players that all have stakes in the blockchain game through investments in blockchain start-ups and research. The praise for blockchain still runs in a steady stream through the media, and new start-ups focusing on the technology emerge every day. The last word has not been said, and all that is left is to just wait and see whether your future transactions will be facilitated by a bank, or if you will simply “put them on the blockchain.”
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