Economic and social megatrends that affect Solteq’s business operations
Especially four global social and economic megatrends offer Solteq several growth opportunities related to digital commerce in the company’s current and potential markets.
Urbanisation will increase offering and demand in both traditional and digital commerce. At the same time, increased leisure time will enhance consumption.
Digitalisation of commerce
Consumer behaviour has been an important change agent in the digitalisation of commerce. Consumers have readily adopted online shopping. Digital commerce will expand possibilities and product ranges for both stores and consumers. At the same time, the significance of efficient and customer-oriented online retail as a competitive advantage and point of difference will increase. Digitalisation will increase the number of retailing channels and fragment the offering.
Internationalisation of commerce
Efficient, customer-oriented logistics will be increasingly important in commerce. Logistics will play a key role as an enabler of global e-commerce. Multichannel commerce and digital marketing will open up international markets to retail operators of all sizes; e-commerce has no borders.
Strengthening role of mobile services
Mobile buying and paying alternatives are increasing fast. Consumers are going mobile. According to Gartner, more than 80% of the millennials sleep with their smartphones.
Solteq sees growth potential despite the adverse macroeconomic situation
The current challenging macroeconomic situation in Finland has a negative impact on market growth. The growth of Finland’s GNP is estimated to remain at a modest level in 2016.This may also mean a slower growth rate in the Finnish software services market. In Sweden, the GNP is expected to grow, and the development of the software services market is expected to be more positive than in Finland.
Solteq’s financial development will depend on the success and future prospects of the Finnish retail sector. Solteq sees two main scenarios in its market situation: On the one hand, digitalisation will increase investments in the multichannel retail services and back end systems that Solteq offers. On the other hand, digitalisation may lead to replacement investments in more traditional basic retail systems rather than new investments.
According to studies, only 22% of Finnish companies consider that they are able to fully utilise the possibilities offered by digitalisation in their business operations at the moment. This means that there is a lot of potential in the market, and therefore we see our own economic operating environment more positively than the general macroeconomic situation would indicate.
In Finland, investments in digital marketing services have remained in the low priority investment category in many companies. According to studies, this has been the most important single cause of disappointment concerning the profitability of online retail. We see good growth potential for our digital marketing services.
We at Solteq believe that the next growth leap in the digitalisation of commerce will be in the industrial B2B sector, for example in spare part sales. Another trend is that manufactures are seeking direct channels to certain customer segments past the traditional supply chain. For Solteq, changes like this will open a significant market both in Finland and abroad.
As customers change their buying behaviours, retail operators change their operating models. Digital technologies and operating models allows us to offer the customers of our clients better customer experiences. The digitalisation of commerce is expanding from B2C to B2B.
In retail and logistics, companies invest in advanced solutions directed to increasingly more demanding customers to be able to better identify customer needs and strengthen loyal customer relationships. Digitalisation helps companies offer a coherent customer experience to customers who shop through several different channels. Demand for e-commerce solutions has stayed good, and the interest of retailers and their staff in digitalisation has increased lately.
Faced with the radical changes that have taken place in commerce, it is increasingly important for retailers to identify the channels in which customers move and what their purchasing processes are like. Our clients aim at identifying their customers better than before to be able to forecast their buying behaviours and offer them more personal and high-quality services. One sign of the changes taking place in commerce is that physical stores are making increasing investments in the development of their customer service encounters to differentiate themselves from their competitors and from e-businesses. In 2015, demand focused especially on multichannel commerce solutions. There is a widespread interest in the utilisation of the possibilities brought about by new technologies in the grocery and special retail sector, and as we see it, also in the industrial sector in the next few years.
Today’s customer behaviour and market developments are characterised by bimodality. In the retail sector, the life cycles of existing systems are extended by means of less costly replacement investments, while new investments are directed to multichannel commerce. On the other hand, fast experimental operating models and proof of concepts are increasingly common and replace traditional ways of defining and implementing large operations and projects. Solteq’s bimodal operating models support both these market approaches.
Solteq has two main types of competitors. In more tradition retail solutions, such as ERP systems and POS terminals, our main competitors are major software companies. In applications, solutions and marketing services, the range of competitors is much wider, and our competitors also include advertising agencies specialising in digital marketing and consulting companies.
Solteq differentiates itself from its competitors by means of a comprehensive offering involving true life cycle thinking and strong long-term client relationships. We are agile. We are large enough to be a trustworthy partner, but at the same time, we are small enough to serve our clients in a flexible, innovative manner.