Iceland is cool: Is your in-store marketing?
Iceland is cool. Really, really cool.
As trends among British 18-30s shift away from hard partying and toward mini-breaks, new experiences and Instagram opportunities, Iceland’s become a more popular tourist destination than the Bahamas, Brazil and China. US travellers have been drawn in droves, too – Iceland is more affordable than ever, and has unprecedented media exposure after everything from Game of Thrones and Rogue One to Black Mirror and Noah filmed scenes there. Millennial travellers are drawn to Rejkjavík’s live music scene – dozens of bands following in the wake of Sigur Rós and Of Monsters and Men – and to its unique, no-chains café culture.
Basically, it’s hipster heaven – and it’s drawing over two million visitors a year, transforming the Icelandic economy. Challenger brands from outside the country have recognised the boom, and are bringing a honed, powerful in-store marketing experience that’s aligned with the emerging consumer demands. It’s not just that they understand what the tourists want – they’re offering an experience that’s new to Icelandic consumers, and shaking up the retail scene as a whole.
The new retail experience – and why Millennials want it
Iceland’s retail environment has been shaped by high prices and limited choice, so big-name brands from Europe and the US already have economy and novelty on their side. Beyond this, however, they’re offering something else – a different kind of shopping. They understand that lower incomes and e-commerce options have turned the high street from a ‘buying things’ place into a ‘finding things to buy’ place, centred on discovering and experiencing products.
Despite the hue and cry about how they’re killing this industry or that, Millennials do actually love shopping. 41% of them ‘showroom’ – they check out a product on the high street, but shop for it online to find the lowest price. They touch, smell and handle merchandise because they don’t like buying sight unseen, and cross-reference that experience with online offers and reviews. If they feel courted by a brand, particularly a brand that treats them like a valued customer and leans in to this “try in-store, buy online” shopping system by offering a personalised discount, 95% of them will become loyal customers.
Millennials also go for different kinds of shops. Pop-ups, which provide distinctive products for a short period, often outperform traditional department stores. They’re more curated and personal, better equipped to provide the courtship experience. Learning zones – environments where the consumer can try out the product, like taking sporting goods for a spin in a fitness studio – also do well. The Boxpark concept – shipping containers that convert into revolving or semi-permanent retail spaces, coworking studios and entertainment venues – offers a blended experience, equal parts work, entertainment and shopping.
Millennial consumers live in a bigger world than before – they’re more connected, they’re always online, but they ‘ache for a sense of unique contribution’. They’re self-advocating, strong-minded, and they don’t believe what they hear from the top. They have to be shown why a product is special, not just told – and that’s why in-store marketing works so well for them.
What Icelandic brands bring to the storefront
The challenger brands who have entered Icelandic retail are used to this experience-driven approach to retail. As a result, they’re beginning to edge out local brands, who aren’t used to foreign competition and, according to McKinsey’s study of the Icelandic economy, have developed in an insular, localised, demand-driven market.
It’s also a small market, and the McKinsey study explicitly references “substantial constraints on how much companies can grow without gaining a dominant market position”. In other words: never mind room at the top, there’s not masses of space for brands underneath it.
What these new brands don’t have, however, is as deep a knowledge of Icelandic culture and retail as the incumbents. Icelanders call each other by their first names, put a specific sauce on almost everything, and are compulsive spenders, working harder and shelling out more than most Europeans.
Culture can easily get lost in translation, particularly with a language that prefers to coin its own words over adopting them from outside and a ruling body concerned about ‘digital extinction’ of its vocabulary traditions.
For instance, signs for Icelanders have to be written in Icelandic – when H&M announced its grand opening in English, it was actually breaking the law. Tech support for Icelandic is poor – Google eventually adopted Icelandic speech recognition, but Apple and Alexa don’t support the language at all, and social media platforms generally implement it poorly. Brands in Iceland are walking a tightrope – they have to be understood by an Icelandic Millennial audience that sees American English as cool, practical, international and reliable, without eroding the sense of attractiveness, relaxation and authenticity that’s attached to the Icelandic language.
In the face to face world of in-store marketing, those values matter. Native brands who can align their Icelandic virtues with the hands-on, “try here buy online” retail experience preferred by Millennial audiences can create something above and beyond what the challengers can offer.
To see how we’ve helped brands build face-to-face in-store experiences in the UK, check out our case studies.