Is shopping tourism in Finland flagging?

Recently there has been a heated discussion about the decreasing number of Russian shoppers coming to Finland and their flagging willingness to purchase. The economic slowdown in Russia, weakened Russian ruble and the Ukrainian events have been considered as the factors having a negative impact on Russian consumers and their purchasing behavior in Finland. Thus, one important issue is under the question: is it still worth doing marketing in Russia?

By sight, the number of Russian shoppers has decreased during the winter period. This pattern was easily observed in Lappeenranta and Imatra regions, where less and less Russian customers were coming to the shopping malls by bus.

Has the number of Russian customers and their willingness to buy turned into the sustainable decline? Russians are not interested in Finnish products and services anymore, are they? Should we wait for the growth of shopping tourism, or good old years are gone forever?

We have explored this issue by comparing Yandex search engine’s keywords and search volume in February 2013 to March 2014. Our aim was to find out whether the Russian consumers are still interested in Finnish products and services, and how the information is searched on the Internet.

Examples of results can be found in the table below:

Search phrase in Finnish Search phrase in Russian Amount of searches in February 2013 Amount of searches in March 2014 Change %
Kaupat suomessa магазины финляндии 23 760 31 313 + 31 %
Verkkokaupat suomessa интернет-магазины в Финляндии 5 702 7623 + 33 %
Mökki Suomessa коттедж в Финляндии 12 132 11 516 - 5 %
Hotelli Suomessa Отель в Финляндии 6 465 8 026 + 24 %
Tavaroita Suomessa товары из финляндии 15 162 15 939 + 5 %
Vauvan vaatteita Suomesta детская одежда из финляндии 2 802 2 712 - 3 %

The results show that the number of Internet searches does not prove the demand slowdown in Finnish services and products. On the contrary, consumers' interest seems to grow in almost all the search areas. Based on these figures, it should have been even more crowded in Finnish stores than before!

The lack of coincidence between the growth of Internet searches and the visual reduction of tourists in shopping malls and supermarkets can be addressed to the customer base segmentation. The economic slowdown mostly affects customers with the weakest purchasing power. Their number in stores has declined, the consumption has been reduced, or the purchase has been just postponed.

Consumers who use the Internet as a primary source of information, usually have greater purchasing power. Their interest towards Finnish products and services does not show any slowdown signs. However, their buying behavior is changing. The interest towards online stores has risen significantly since the last year (30%). Online purchases are strongly growing in Russia, and the consumers’ attention focuses more and more on online stores.

The popularity of online shopping growing during the economic crisis is not just a Russian phenomenon. A similar pattern can be observed also among Finnish consumers. The explanation is simple: the weak economy causes increased price-sensitivity. However, in online stores there is a chance to find cheaper deals and make price comparisons easily.

The future depends strongly on the power of online shops. The recession has taught consumers to make online purchases on a larger scale, and this method is unlikely to disappear in the future, if the economy starts to rise again.

It would be wise of online stores to take advantage of the potential of Russian shoppers and head their businesses towards the Russian market. The confrontation between the online store and the retail store is pointless. However, it is worthwhile to think about how e-commerce can bring more shoppers to the traditional stores and vice versa.

If you have any further questions related to the issue discussed in this blog entry, or you need some business consultation, do not hesitate to contact us!