A path to billion – a growth strategy for Verkkokauppa.com
Verkkokauppa.com, the leading Finnish online retailer, had enjoyed double digit growth for the past years and had reached 500m€ turnover milestone.
However, while the opportunities were ample, it became more difficult to deliver high growth numbers and a focused growth plan was needed to set new milestones. The first external CEO of Verkkokauppa.com, Panu Porkka, while maintaining the entrepreneurial spirit of the company, had formed a more structured way for managing the company, wanted also to renew their strategy process and to use an external partner to assist in crafting a growth strategy and Marketing Clinic was invited for the cooperation.
The task was clear: identify the sources of growth in terms of business model, customers, geographies and offerings. Both organic and inorganic growth paths needed to be explored.
Questions that needed to be answered:
- What is the underlying growth capability of current offerings & business model?
- How can we leverage the current competitive advantages and what are the new competitive advantages needed to build?
- What are the most cost effective growth building blocks?
- What should we aim for in terms of top- and bottom line growth in the next strategy period?
The work process was designed to be highly collaborative to ensure early on buy-in and ownership for the strategy among management team as well as the board. A large amount of potential growth areas were explored and analyzed in small task force teams that consisted of Marketing Clinic team and assigned Verkkokauppa.com team members.
Verkkokauppa.com’s refined strategy describes the future growth path, which is primarily organic and driven by the accelerating transition from brick-and-mortar stores to online.
Growth is driven both from within core categories as well as by expanding into new categories with attractive margin potential, especially online. Additional growth opportunities are in the B2B segment, private labelling and value added services. The target is to double the B2B and private label business by 2025. In addition, Verkkokauppa.com is looking for potential new business and M&A opportunities, especially among local complementary ecommerce companies.
The strategy was communicated in February 2021 with positive feedback and raised recommendations and target prices by e.g. Nordea, Evli, Danske Bank and Inderes.