Elgiganten dares to say yes, right in the store

Already the Nordic region’s largest consumer electronics chain, Elgiganten is currently expanding into the commercial market. And by using a more streamlined credit template, Elgiganten is succeeding in declining ever fewer customers.

Elgiganten has three overarching goals: to be best; to earn money; and to have fun. It does a pretty good job of all three. Elgiganten posts healthy profits each year, and its Swedish head office in Akalla, northern Stockholm, is known for its unusually high morale. But there is always room for improvement, even for the best. In March 2010, Elgiganten joined forces with Soliditet.

“We have been so focused on the consumer market that the commercial market has become a little neglected. However, we realised that we needed better tools to ensure we were selling to the right companies,” explains Fredrik Peterson, Financial Director at Elgiganten.

In partnership with Soliditet, Elgiganten has developed a new, uniform credit policy which is fine-tuned several times a year. The policy is more permissive than previously, and equally, if not more, reliable.

“Now, we avoid turning down business from our customers, although we still envisage keeping our credit losses at the same low level as before, albeit with substantially more customers.”

Elgiganten uses Soliditet’s Decision Support solution in all of its stores across the nation, in order to assess whether companies are credit worthy. As financial director, Fredrik Peterson has enough to occupy him without having to worry about credit issues.

“Eventually, we hope to be able to carry out pretty much all our credit work out in our stores, using the credit template. At the moment, Soliditet is helping us train up our workforce.”

At 18 of its largest stores, Elgiganten has opened Business Centers, catering for commercial customers. In addition to Decision Support, Elgiganten also uses Nordic Business Key, in order to help find attractive commercial customers.

“Our main focus is on the slightly larger companies, with good ratings,” Fredrik says.

Elgiganten also uses Monitoring for its commercial customers, to further minimise credit losses. In this respect, changes in the board of directors are of considerable interest, as well as deteriorations in rating.

“The larger credit losses we have sustained have often been preceded by the previous board being replaced by asset strippers,” explains Fredrik.

Facts about Elgiganten

Elgiganten AB has the highest turnover of any consumer electronics retail chain operating in the Nordic region. The company was formed in 2003, and opened Sweden’s first Elgiganten store the following year, in Barkarby, outside Stockholm.

Today there are 69 Elgiganten stores in Sweden, from Ystad in the south to Haparanda in the north, and the company’s Nordic central warehouse is located in Jönköping. Elgiganten belongs to the Norwegian Elkjöp group, which, in turn, is owned by the British Dixon Group, consumer electronics specialists.

Feel free to read more at www.elgiganten.se


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