Call Me Crazy: Why Stockmann Needs Retail Boost

The 155 year old company launches into its autumn Crazy Days campaign this week, and recent poor financial news means a big push for sales is vital.

Stockmann Crazy Days advertising / Credit: News Now Finland

Stockmann’s twice-yearly “Crazy Days” event gets underway again this week, and the sales promotion couldn’t come at a more timely moment for the company after recent warnings over falling profits.

Yellow Tradition

You can’t fail to notice the splash of yellow around Stockmann’s six stores in Finland, one in Tallinn and one in Riga at this time of year. Yellow plastic bags. Yellow banners. Yellow balloons with the cartoon ghost mascot.

It’s a shopping tradition for Stockmann that goes back more than 30 years.

“When we started in 1986 it was not quite the same Crazy Days as it is today” says Maiju Niskanen, Director of Stockmann’s Finland and Baltic stores.

“It wasn’t yellow at the beginning, and we didn’t have the ghost. It started then and it became very popular […] we have lots of customers who really look forward to Crazy Days. Some customers who even come shopping dressed in yellow” she says.

And Stockmann really needs those customers to show up in strength this autumn, whether they’re wearing yellow clothing or not.

Financial Problems

It’s been a turbulent few years for the iconic Finnish brand, which opened its first Helsinki store 155 years ago.

In 2015, the company posted a €50 million loss, due in part to the weakened rouble hitting its Russia businesses, Finland’s own ongoing recession, and changing shopping habits.

In spring that year, CEO Per Thelin had confidently predicted the company’s fortunes would soon turn around. But by November the company was forced to cut its losses in Russia, and sell seven department store operations cheaply. They closed down the Stockmann Oulu store as well. And six months later Per Thelin was gone, after less than two years on the job.

By 2016, Stockmann Group was once again posting a healthier profit with a new CEO, thanks in large part to a strong performance by Lindex, a Finnish chain that Stockmann had bought a decade before.

But the bad PR continued in spring 2017 when Stockmann announced it would sell its luxury grocery departments to retailers S-Group – seen by many customers in Finland as a down-market move.

The icing on the cake came at the end of September as Lindex’s profits went south, and Stockmann was forced to warn investors that it would miss its earnings forecast with reduced profits for 2017.

Crazy Days Importance

That’s why Crazy Days is so important to the brand – it brings customers through the door, it’s a five day sales Bacchanalia, and it’s a financial shot in the arm.

“For loyal Stockmann customers the Crazy Days are a sign of continuity and tradition, which is good for Stockmann now that there are huge changes happening in the organization” says Essi Pöyry, a postdoctoral researcher and lecturer at Helsinki University’s Consumer Society Research Centre.

“It’s the most important campaign of the season […] last spring we had more than 1.4 million [cash register] receipts” says Maiju Niskanen.

“We sell huge volumes during the five days and we want to make it special, an event for the customers” she states.

The secret to the success of Crazy Days is the sheer amount of merchandise Stockmann can put into the stores, stacking pallets high in the days leading up to the date.

Suppliers offer special discounts, but there’s also other time-tested retail tactics at play.

“Stockmann’s strategy for Crazy Days is to sell products that are left-over from previous seasons and more importantly, products that are produced only for the Crazy Days by key partners. This way the consumer won’t find these products elsewhere and cannot compare the prices” explains Essi Pöyry.

“Stockmann actually doesn’t market the Crazy Days as ‘discount days’ but as ‘special offer days’ so at least this strategy is not illegal. From the fairness point of view, the prices really need to be competitive so that this is a sustainable strategy in the long term” she adds.

Online Growth

The importance of Crazy Days online is also a key factor for driving web sales revenue during the twice yearly campaigns.

Stockmann first extended Crazy Days from their bricks and mortar stores to online in autumn 2012, and it’s become one of the fastest growing sectors for the retailer.

“I believe the financial importance of e-commerce during the Crazy Days continues to grow and this also offers a big opportunity for Stockmann” says Pöyry.

“Most consumers enjoy bargains and discounts regardless of the financial gain. So the specific discount amount is not as important as the enjoyable feeling of making a bargain or feeling like a savvy consumer” she says.

This spring, the company had a million visits to its website during Crazy Days, with more than 50,000 online sales. And Stockmann has now increased the ‘opening hours’ for Crazy Days offers online.

“The suppliers see the value of the campaign so we negotiate with them, and they help us to bring nice prices to the customers” says Niskanen.

A reminder of ‘Calm Days’ from Schoffa in 2014 / Credit: Schoffa Facebook

Counter Culture

While Stockmann stores have a reputation of being overcrowded with shoppers during Crazy Days – “it will be a full house from the minute that we open the doors, people running in” says Niskanen – not everyone appreciates such a frenetic shopping experience.

“There are all kinds of people, but for many it is uncomfortable to queue for a long time to try something on or to go through a huge pile of jeans to find the right size” says Anton Koivisto, CEO of Schoffa, a smart clothing store for gentlemen in Helsinki.

Back in 2014, Schoffa posted a picture on Facebook advertising their ‘Calm Days’, a shopping experience in stark contrast to Stockmann.

“We value high-quality products, excellent customer service and a comfortable atmosphere, and wouldn’t want to compromise on them” says Koivisto.

“For us, this was about reminding people that shopping can be comfortable and stress-free. Why not take a moment for yourself and enjoy trying on a new suit?” he adds.

The 2014 ‘Calm Days’ event wasn’t a campaign as such, explains Koivisto, “just a friendly reminder” of a more serene way to shop.

Future Changes

University researcher Essi Pöyry agrees that the novelty factor of Crazy Days is decreasing – after all, they’re running a 31-year-old campaign that would seem completely familiar to London shoppers at Selfridge’s Department Store a hundred years ago – and says they need to respond to the needs of customers.

“Future department stores will become experience centres where people seek things to do and see” says Pöyry – a philosophy that American entrepreneur Harry Selfridge knew very well.

“To remain relevant, Crazy Days needs to focus on bringing new, interesting products for sale and understand what kinds of bargains create enjoyment the most” she says.

One item at Stockmann does seem to weather the passing of time, and create enjoyment for customers.

They sold 63,000 Crazy Days donuts already this year. With more sugar expected during the autumn campaign.