Are catalogs missing out on Scandinavia?

Scandinavia may offer catalogers one of the most promising markets in Europe. The region’s 24 million consumers make up the most affluent European population, with a per capita gross domestic product of $28,282, according to United Nations statistics.

Compare this figure to the U.K. ($21,823) or Germany ($25,592). And while the combined populations of Denmark, Finland, Iceland, Norway, and Sweden total roughly one-third of the German market and less than one-half of the British market, Scandinavia’s gross national product grew 3.4% in 1997, faster than that of the U.K. (3.3%) or Germany (2.2%).

Scandinavia’s appeal to direct marketers is further enhanced by its relatively open marketplace. Mail order sales make up only 2.4% of the region’s retail sales. Compare this to tighter markets such as Germany, where according to Detlev Heinrich, president of German list and marketing consultancy Mail-Select, 5.8% of retail sales are transacted through the mail.

And the region’s direct marketing audience isn’t limited to mail offers. According to Sweden’s Torget network of online stores, Scandinavia’s online population is more than 20% of Europe’s total.

But despite these advantages, Scandinavian postal companies believe the market has been ignored by foreign and domestic marketers. A report commissioned by the post offices of Denmark, Finland, Norway, and Sweden finds that few business-to-business direct marketers operate in Scandinavia, and even fewer upscale and niche catalog marketers serve the consumer sector.

“Catalogers have concentrated on other markets,” laments Magnus Englund, area sales manager for Sweden Post Ltd. He points to estimates that the region’s $2.4 billion mail order market can be expanded by up to $1.6 billion simply by offering Scandinavian consumers more catalogs.

But while the Scandinavian postal consortium boasts that “all but the very young and very old can speak English,” Englund warns that reaching Scandinavian consumers is not quite as simple as mailing British or American catalogs and waiting for the flood of orders. “Many home goods and apparel should be sold in customers’ native languages, but selling high-tech products and computers in English will work because consumers are used to English instructions and product names.”

Gunnar Lindbald, managing director of Lawrence, PA-based Black Box’s Scandinavian division, says the computer network supplier’s sales in the region have grown 50% annually over the past three years. But Lindbald notes that customer service should be supplied in the buyers’ native language. “We mail our catalog in English, and for a small percentage of our customers, it’s like Christmas when the catalog comes – they know what they want and they order it. But it’s difficult for the rest. They need information about the product, and they need to talk to someone who speaks their language.”

Denmark, Finland, Iceland, Norway, and Sweden each have their own native language and currency. And while all but Norway and Iceland belong to the European Union, and will conduct transactions in euros, the language barrier is problematic for foreign marketers, because the individual markets are relatively small. Sweden is the most populous with 8.85 million; Denmark, Finland, and Norway each has between 4.4 million and 5.3 million citizens; and fewer than 275,000 people live in Iceland.

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