It is no secret that the Nordic countries have strong GDPs and citizens with plenty of purchasing power. As a business owner at the crossroads between the Nordics and the rest of Europe, I understand well how Nordic consumers can represent a veritable goldmine of revenue for businesses with multinational aspirations.
But at the same time, it is also a vast and diverse region in both cultural and commercial terms. As a business, how can you know for certain which countries and regions you ought to target? And how can you connect with Nordic shoppers and convince them to choose your products over the crowded competition?
Those questions and more are just what I would like to address in this latest article for LinkedIn, so read on below for some answers!
Nordic Super Consumers!
The Nordics are well used to topping the charts when countries are pitted against each other. Whether it be happiness, sustainability or business, the Nordics often come out on top.
And when it comes to purchasing power – or what is known as actual individual consumption – the Nordics are no exception. In 2019, a study by Statistics Norway found that Norway has the second highest levels of consumption in Europe, and it was followed closely by Iceland and Denmark. Sweden and Finland were not far behind either, nestled among economic powerhouses such as Germany, Austria and Belgium.
In some cases, the Nordics even beat countries with higher GDPs on actual individual consumption. Norway, for example, beats both Switzerland and Ireland on this metric, despite both countries having higher levels of market value overall. This is largely because a lot of the money generated in the Nordic economies stays at home, where it ends up as disposable income in the pockets of Nordic consumers.
Ravenous Icelanders and Fun-Loving Swedes
So the fact that Nordic consumers have lots of money to spend is well established, but what exactly do they like to spend it on? What trends can we look to as guidance when contemplating a move into one or more of the Nordics?
Well, food and drinks businesses may want to set their sights on the outer reaches of the continent. The same study by Statistics Norway also found that Icelanders spend more than any other nation in Europe on food and non-alcoholic drinks. Their consumption per capita for this category was a whole thirty-six percent above the EU average. Figures from Statista suggest this is a trend that has been growing steadily ever since Iceland emerged from the economic crisis at the start of the last decade.
Swedes, on the other hand, prefer fun over food. According to a study by Statistics Sweden from 2008, consumers in this country spend more on cultural and recreational activities than they do on groceries. This trend has only continued since then, with figures from Trading Economics showing that in 2021, Swedes spent 11.5% of household expenditure on culture and recreation. This was the highest percentage anywhere in Europe, followed closely by the Danes at 10.9%.
Other trends include a fondness for rosé wine among the Danes and a penchant for video poker and slot machines among the Finns.
What about the Cost-of-Living Crisis?
Despite being in pole position, the Nordics are not immune to the global tremors affecting consumer confidence across Europe and the wider world. Many Nordic consumers have expressed concern about their household finances and traded down to cheaper alternatives.
However, according to research by the Boston Consulting Group, the situation in the Nordics represents more of a spending shift than a spending stop. Consumers are typically looking for cheaper alternatives, and this could represent an opportunity for budget food and clothing brands, for example.
Meanwhile, research by Deloitte suggests that home entertainment services seem poised to remain steady following their boost during the pandemic as Nordic citizens continue to spend time at home. However, this sector has become increasingly fragmented by competition and different brands perform well in different countries.
How Can Businesses Target the Nordics?
Deciding where and when to launch your product is the first step – and hopefully the data above will go some way towards helping you make that decision. However, perhaps even more important is figuring out how to position your product and present it to potential customers.
More than anything, it is important to speak the local language – and by this, I don’t just mean translating text word-for-word into Danish, Norwegian, Swedish, Finnish or Icelandic. In order to claim your share of all that disposable income, you will need to connect with potential consumers on a deeper level.
The key to this is a word we have discussed many times before, both in articles for LinkedIn and on elsewhere on our website blog – localisation. It is not enough simply to take your existing texts and run them through a machine translation programme or have a human translate them literally. Instead, you will need to tap into that unique Nordic sense of humour and connect with the Nordic way of life to make your products relevant.
In some cases, it may also be a good idea to reposition your goods and services in line with Nordic values. For example, studies have shown that Nordic consumers are generally more conscious about sustainability and eco-credentials than consumers in other countries, and they tend to select brands that are clear about their goals around net zero and climate change.
Your Guide to the Nordic Market
As you can see, there is a lot to consider when launching a new product or service in the Nordics. Purchasing power is strong all across the region, but certain trends prevail in some countries over others. Nowhere is immune to the seismic geopolitical uncertainties we are seeing globally right now, but that does not mean that these hit each country in the same way.
Breaking into a new market requires an acute awareness of all the above, and a prevailing ability to connect and communicate with consumers. At Comunica, beyond simply translating words, our mission is to keep our finger steadily on the pulse of all these developments and more, so that we can offer guidance to our clients beyond just the words already on the page.
If you would like to read more about how we can help businesses break into the Nordics, explore our range of services or feel free to send me an email.
Together, we can help you conquer the Nordics!
