Hey. Would like to wish everyone a very warm welcome to this afternoon where we will talk about the future for Clas Ohlson. I hope it will be an interesting and informative afternoon for all of you. I know that some think that it took a long time to get here. Actually, that's probably a reflection of some of my holy cows as a leader. I believe that it's crucial to do the homework. What you will see here today is really based on solid analysis that we have made, not only of our own business, but also our customers and the context that we operate in. Secondly, I believe a strategy is nothing without a plan.
What you will see here today is definitely our strategy, but there is also a plan, activities, some already actually in the works, but also, full financing and resources connected to it. Finally, this is not the time for quick fixes. It's about sustainable change. Sustainable change can only be achieved if it's anchored. We have spent quite some time during these months to also anchor the whys and the whats of this strategy. A little bit about today's speakers. Apart from myself, you will meet Eva Berg, who is our Assortment Development Manager. You will meet Geir Hoff, who is Director of our New Markets and Expansion, and former Country Manager of Norway for many, many years. You will meet Göran, who is CFO, Göran Melin, until end of June.
Also in the room, we have Pär Christiansen assuming the CFO position on July first You will meet Jacob Sten who is our Chief Growth Officer. Finally, Fredrik Urbom, who is manager for Clas Ohlson Sweden. Before I jump into the content, I would also like to highlight another important focus that I've had during this first eight months in this position, and that has been to get a structure into group management that enables us to now make this strategy a reality. To highlight a couple of important dimensions in this. One is that I think the reality that we live in today makes it extremely important to have someone who has responsibility for the entire customer experience, integrating the offer, the channels, and the communication that meet the market. That is what we have put in place in the growth function.
Jacob Sten , in his role as Chief Growth Officer, has that responsibility, and we are adapting the organization accordingly. I believe that it's critical for us leading a retail company to be as close to the customer as ever possible. One way of doing that is to make sure that the markets and the people leading the markets are close to leading the company. Therefore, I very early on brought the country managers into group management. Finally, we will, when Pär Christiansen joins as CFO, also change the scope of the CFO role. Among the responsibilities that Pär Christiansen will get is to have a very clear leadership for our cost and efficiency agenda. I mention these things because they are important dimensions to be led in an appropriate way in order for this strategy to become reality.
From a group management perspective, I think we are well organized and good to go. To give you a very brief summary of the strategy before we step into the different parts, we have decided to stick to the mission that our founder put in place for this fantastic company 100 years ago. We have decided to build on the customer base and the trust from our customers that have been built during many, many years. The financial strength that has resulted in is also an important platform for this strategy. We have decided to make the home our territory. Home is not the same thing as home furnishing. It's much bigger than that, and we will come back to that later this afternoon.
Core, in this strategy is that we intend to make our offer to customers more relevant and more unique. Part of that is, of course, optimizing and developing the product range. Maybe even more importantly, the way to make it complete and a solution to people's problems is adding guidance in new ways and adding services for those who prefer to have the solution fully done. We believe that convenience has been one of the reasons behind Clas Ohlson's success, and we believe that convenience is the real reason behind the attractiveness of shopping online. We will make online as convenient in Clas Ohlson as the store experience have been. That is another important pillar in this strategy, and we'll describe this afternoon more how.
Apart from this, it is fundamental for any retailer, and maybe any company actually, to be as efficient as ever possible. We have a job to do when it comes to both our cost structure and the way we operate together with our suppliers. All in all, with this strategy, we believe that we have the knowledge, the ideas, and the financial muscles to grow this company 5% on average organically during this 5-year period. We will deliver a profitability and operating margin, an EBIT margin of 6%-8%. We will, while quite dramatically developing the company during the coming years, at the same time, keep financial stability and the dividend policy intact. This was a little bit of a snapshot that I'm sure many of you have already grasped in the press release.
Now we will go into more of the details, and taking it really from the beginning because this is where it all started. When we embarked on this journey 8 months ago, we decided to step into our founder's shoes. We wanted this from the beginning to be the start of building a long-term foundation for Clas Ohlson, not only a quick fix. Starting from our founder was, in that sense, very natural. What did we then bring with us from him? Well, I think you will see it's obvious that we share his passion for actually making a difference through practical solutions. We bring with us the values that he actually planted as a person when he started the company.
We are committed to developing Clas Ohlson and grow the company together with our customers. This has led to that we will keep the mission as the heart of the strategy going forward. We believe it is as relevant today as when Clas Ohlson founded the company. In fact, I would even say that it's eternal. Why do I say that? Well, it talks about people, everyday life, and practical, convenient solutions at good value. As long as there's people, as long as there is an everyday life, and as long as there is a demand for everyday practical solutions, Clas Ohlson has a role to play. Those solutions will be different depending on the times we live in. We have thought quite thoroughly about who do we want to be for our customers, and why is that important?
Well, I think that being in the right place of consumers' minds and hearts is actually the key, and it's the best protection to have towards any competition, be it our existing competitors or Amazon. We have decided to be or want our customers to perceive us as passionate about simplifying life in all kinds of homes. What does this mean then? Well, passionate means going that extra mile, making the customer feel important, that the customer feels that they have a relationship with Clas Ohlson, and that we have a relationship with them. Simplifying life is actually about creating space in the wallet or enabling time or creating quality time, things that you really want to do, time for things that you really want to do. Finally, all kinds of homes.
I believe that there is no reason for anyone living in our markets not to shop at Clas Ohlson. Think about it. Some needs that we have, we all share. I think we all clean. Most of us have picture on the wall. Most of us wash, maybe different extent, but most of us do that. Most of us have all type of stuff in our home that needs to be connected. Many needs are the same in all kinds of homes. The solution can vary. Some want to buy the equipment and install it themselves. Others might want to look at the video online to understand how to drill and what drill to use for hanging that painting. Some like to wash the windows, and some want someone to do it for them.
The solutions will vary, but we want to provide solutions for all kinds of homes. Apart from this starting point, we have also brought some other things with us from our founder. Our culture, he put that in place. He started that. A customer first approach. Finally, he was convinced that in the long run, it's important to do the right thing in the big picture. To comment on this, our culture, it's very much about being down to earth, about being hands-on and always doing good business. From being now in the company almost a year, I can say that this is really something that is alive wherever you go in Clas Ohlson. The customer first approach. When speaking to people who work with Clas Ohlson, this is what they mention first, and it's probably the most prominent characteristic he had.
He always put the customer first. Convenience was his way of doing that. Finally, responsibility. He wanted to do good in the big scheme of things, and our sustainability agenda is the way to carry that forward. We have decided to focus where it makes most effect, and we believe that that is by making our product range a key to a more sustainable lifestyle. All in all, this is what we have then used to build our two business objectives in this strategy. The first one is that we want to be a meaningful and trusted brand and company, and we want customers to recognize us as passionate about simplifying life in all kinds of homes. The intention with this business objective is to make sure that we, at all times, have a big and loyal customer base.
I think that that is the most important asset for any retailer. With that as a base, we generate growth, and through growth, we generate shareholder value. How will we then deliver these objectives? We have identified 3 building blocks that we will focus on. The first one is unique customer offer. I will mention 2 things that stand out in this building block. First of all, we talk about offer, and we talk about solutions. We will work with complete solutions, so a product range that is relevant, guidance, and services. As I'm sure many of you have seen, today we have announced our first step in the service journey announcing the service Clas Fixare.
That is a way for us to secure that people who might not have the will, the knowledge, the time, or who don't enjoy it, can get support to simplify their life at home. We will also work with making this unique offer more accessible using new technology and platform thinking. You will hear more later from Jacob Sten about something that we call the Care of platform that we will develop. A one key, one point of access to the whole Clas Ohlson offer. A completely new way of accessing what we offer. The second building block, outstanding customer service, is something that many people already mention as a competitive advantage of ours, and that comes back to the many fantastic coworkers that we have in our stores. We intend to continue to develop this and continue to have it as a competitive advantage.
What we will do here is strengthen the knowledge part. It might be that you meet Clas Fixare in a store once in a while or maybe can book a time with Clas Fixare to learn about something specific that you want to learn about. We will also use technology to make service accessible in a different way. Clas Fixare will not only be a person you can meet, it will also be someone that you can connect to using video chat, just as you can, for example, connect to a doctor using your cell phone today. The third building block is smartness and simplicity. My view is that growth is the engine of any retail company. That requires investing commercially, and right now, it also requires investing in transforming the business. That needs to be funded.
We have a job to do when it comes to increasing the efficiency of our range. We need to work on getting an even more competitive sourcing setup in place, and we need to make sure that our logistics setup is as efficient for e-com as it is for distribution to the stores. With these three building blocks all together, we will deliver to the two core objectives that we have: build a big, loyal customer base, delivering growth and profitability. What will this then mean for our customers? Well, we intend to reinvent and disrupt the customer journey as we know it today.
The starting point will be a platform that we call Care of. That will be a one point of contact access for customers to Clas Ohlson, whether you decide to meet us in a store or online, or maybe in your home when Clas Fixare is there. Through this, we will also build a unique loyalty setup. We believe that the times for cards and loyalty clubs where you buy loyalty, it's a little bit over. That's not the way to build real loyalty. It needs to be done in a different way, and that's what we will do with this platform.
We will work with our product offer and our service offer to build real relevance, being able to solve the real problems that people have, and use the store experience and the online experience to deliver the solutions, so you can actually shop your way or get guidance your way or get the service you want. All in all, this is what will make us perceive as passionate about simplifying life in all kinds of homes. This is also a summary of the agenda for this afternoon. We will, in a minute, hear from Geir Hoff, who will take us through a little bit the analysis we have done around our current position. I will come back and talk about the markets and the opportunities we see.
We will look at each of the building blocks one by one, starting off with a unique customer offer, which Jacob Sten a nd Eva Berg will take you through. We will then have a short coffee break, then go into outstanding customer service. You will then hear about the future role of the store and the analysis we have made of our store network. You will also hear about the future role of online, our plans for Black Friday, our plans for the next step after that, and our long-term ambition. Finally, I will talk about the building blocks, smartness and simplicity. We will then round off the day with getting an overview of our current financial position and the future financial goals before coming to next steps and a Q&A session, which Jonas will moderate for us. That's the plan for the afternoon.
Again, hope it will be interesting and informative, and I welcome you, Geir Hoff, to the stage.
In a neutral way or?
Yes.
Yes. Normally, she tries to say that, "Okay, you've been in the company for 25 years, and I am younger than you," because she has realized that she's younger than me. I'm older and wiser, maybe. I'm here to talk about a little bit our current position. Lotta Lyrå has opened the doors a little bit into the future, I think it's necessary to stop for a moment and just see where we're coming from. I think Lotta Lyrå says that we are credible to take the next step, I will try to show why we are credible to do so. I have a long history in Clas Ohlson. I actually been with the company since 1994, which means somewhere when this steep climb is starting. It's a long way. Yes, I know. It's a long time since.
My reflection is like this. One way of seeing this chart, and this has been presented to you probably a number of times, is a technical rollout of stores and new markets. Celebrating milestones, either it's new stores, it is sales records, or it's entering new markets. You might also see this as Clas Ohlson's way of always adapting to the existing retail climates, the customer need at all time. We're coming from a position as a mail order company, and we did that for many, many years. Then in the end of the eighties and the beginning of the nineties, the retail started to be the blooming of the stores out in the Nordics. Clas Ohlson understood that the customer wanted us also to have stores around in the Nordics, so we started to build stores.
We build a lot of stores, 230 stores to be exact. It's a history of adapting to what's needed for the customer needs to be fulfilled. I also think it's a history of a solid brand position. More than 90%, almost 100% actually, in the Nordics know about Clas Ohlson. That is nice, but what's also is very nice is that more than 50% on average have an emotional connection, which means that they care about the brand. They have a view about the brand. The brand means something for them. Not only do we have an emotional connection to its customer, but they're visiting us too. 73 million times a year in the Nordics. 73 million people enter our stores each year. If that wasn't enough, 83 million people also enter our online channels.
Each inhabitant in the Nordics, 0 to 100 and something years, visit Clas Ohlson approximately 4 times a year. On top of that, 2.8 million customers has decided in Finland and Sweden to join Club Clas. Out of those 2.8 million, 15% of them visit Clas Ohlson more than 10 times a year. In my head, you go from loyal to becoming a fan. The retention rate in the club is high. It's more than 90% stay and use the club every year. With a stable customer base, loyal customer base, frequent visits, then comes the money. We have an equity asset ratio of more than 50%. We have a strong cash flow, and we have a strong cash foundation, which means that also financially, we have a solid ground to stand on.
It's all clear. We can go home for the day. No. We have seen the curve climbing. Now we need to take another step, another wave of climbing. How do we do that? It's quite clear from an internal perspective, but also from the retail market, that there are changes coming, big changes, and we need to address those changes. The question is more how to address the changes. To do that, we really saw that we need to understand the one single most important person in our life, which is the customer. We started to analyze everything we could find about the customer. We analyzed 40 million shopping baskets. What did they buy? When did they buy it? How did they buy it? What didn't they buy? We talked to them, and we did exit interviews. What did you buy today?
What did you come to buy today? We're really trying to understand and learn what does the customer use us for today and how do they want to use us in the future. Secondly, we also saw that we need to talk to our own employees. They have a lot of knowledge they can share with us to understand the way further. We talked to the other stakeholders out in the financial markets. If it's journalists, analysts, we need to learn how are we perceived out in the markets. Who is better to do that than our stakeholders? Doing this, what did we learn? We learn a lot. I must say one thing. I've been in the company for, I don't know, 24, 25 years. I had a very clear picture about Clas Ohlson. I've run Norway for almost 10 years.
I've been in the build-up of Norway. I thought I knew every corner, every single step of this company. I have learned so much more about the company during this 8 months that I really understood that, yeah, sometimes you need to open your eyes and take another look. We know that we have a strong foundation to build on. We have consumers that like shopping at us. We have high awareness, and we have high consideration. We have a strong financial position, allowing us to do strategic investments. That's positive. We also know that we see a great potential in further commercializing our offer. Throughout the years, we have built our assortment approximately 15% more SKUs every year, and by that, also building up the long tail. Dragging products may be not performing as they should with us into the future.
Another thing, this might be one of the biggest surprises, 40% of all customers enter a store, buy one single item, they leave the store again. Yes, we have a great convenience in the Nordics, still we haven't really reached out to commercialize on all those 73 million store visits today. We also have learned that some of our margin investments in campaigns, etc., might not have had the full impact that we wanted them to have. We have also learned that we have great opportunities to streamline our operations. We have 2 long lead times. Either it's external to the customers or it's internal from we decide something to something is on the shop shelf. We have built up inventories in the stores due to lack of planning and focus.
We are behind the best in class on both direct and indirect buying. It also give a great potential. We also have a great need to embrace digital. Clas Ohlson has been store-focused. Digital has been a secondary channel for us, meaning that only 3.5% as a total sales comes from online. Finally, we have also learned that the market is far bigger than we even thought about earlier. Having the home and the customer wallet as our aim, we only reach less than 10% of that today. There's a huge potential for growing the business. Huge potential, Lotta Lyrå.
Yes.
You take us through there.
I will. Thank you, Geir Hoff. This was to give you a feel for our internal starting point and a glimpse of the analysis, the homework we have done. Of course, there are other important perspective when defining a future plan. We have looked at the context we operate in and the market we act in more specifically, and we will start with the context a little bit through a film.
The world is spinning faster, and technology is providing new solutions to old problems and inspires innovations we never thought possible just a few years ago. There's never been a more exciting time than now. Retail is becoming borderless, and competition is now on a global scale. Technology moves fast, and so does consumer behavior. We want simple, fast, and safe shopping on whatever platform we choose. Convenience is key. We also want more unique experiences, no matter if we're online, in a physical store, or somewhere in between. The line separating the digital and physical world is becoming blurred. We expect brands to be sustainable, or we're fast to replace them with a brand that is. We value experiences more than physical items. When we buy a product, we want it to tell a story, better yet, to be completely unique.
A big part of retail involves discovering great products. We'll still visit physical stores, not necessarily because we want to buy stuff, but because we wanna get experiences we won't find anywhere else. Artificial intelligence is changing the future of retail. Not only will we see robots pack and ship items, but perhaps a robot might be best suited to give us advice on what to buy. It's all about simplicity. Shopping should be easy and on our own terms. Consumers are turning away from dreary payment procedures. We want simple options like auto-renewal buttons, one-tap purchases, and to order products from smart speakers. Convenient and effortless.
Not only does the buying process have to be streamlined, the same goes for logistics. This will increase a demand for click-and-collect options, free shipping, and same-day deliveries. The future is bright for retailers who adapt to their customers' needs, who use technology to simplify shopping, and who strive to offer a unique experience.
This was to give you a glimpse of the, some of the conclusions that we have drawn in the analysis of the outside world and how it impacts us. To summarize, what we believe is the reason behind the speed of change, the almost exponential speed that we see right now, we believe that it's a consequence of the fact that behavior and technology is right now in sync. Meaning that whatever you want to do as a human being is supported by technology one way or the other. Technology scales quickly and becomes cheaper and accessible for many. What does then this do to retail? Of course, many things, but I would like to mention a few. Starting with, of course, that the consumer demands are on a completely different level today.
I think what's really striking right now is that this also travels between different segments, different businesses. To take a concrete example, if you buy a hamburger at Max, and you do that in a very streamlined way, you don't, as a consumer, see a reason why you should not be able to shop at Clas Ohlson or elsewhere in a similar way. The demands, they travel between businesses. Also, not only should the transactional part be streamlined and simple, customers also expect us to know about them and to have a relationship. Obvious is also that the competitive landscape is increasing. We see two movements, striking movements. One is that the entry barriers right now for running a business are quite low.
Almost anyone can get a website up if you have a great idea, if you have unique products, and get access to a global market. There are logistical systems today that you can plug into and have deliveries. Very low entry barriers. At the same time, we also see business borders drifting. It's really clear that retailers are trying to make as much business as possible on the customers that they have. What's also clear is that technology makes it possible to test almost anything online or offline today. There are endless possibilities, and I think that the question, when will you be done or when will this be ready, is almost obsolete.
The future will be about constantly developing, running experiments, running pilots, and finding a way ahead. What many are doing is, of course, to review their service level, to look at how can we be something, add something extra as this competitive climate increases. Many new business models evolving and also are evolving. That also impacts, of course, the economics of being a retailer. I would like to mention a few very important principles that we have built this strategy on. First of all, we believe that the customer base is by far the most important asset for any retailer going forward. The reason for that is that the relationship with the customer, the data you have on a certain customer, makes it possible to grow, and it gives a protection to also new competitors coming in.
Secondly, we believe that sales per customer is the new like-for-like. Measuring store like-for-like, traffic in stores and so on, that is no longer how to drive the business. It is about making sure that you all the time commercialize on your customer base as much as ever possible. Behind the scene, it's about accessibility, and it's about footprint, and it's about having a combination of stores and online that will drive that accessibility. You will see in a minute that the logistic analysis we have done of Clas Ohlson leads to the conclusion that we will use our store network as feeder stores. Deliver with short lead times to customers also when ordering online. Investments are shifting. The character of investments are shifting.
We have to get used to that what used to be invested in brick-and-mortar will now be invested in technology, digital capabilities, and so on. Finally, maybe the one the least talked about, but in my mind, almost the most striking one, is that core competence in retail, the way we knew it, is being redefined. If you look at the competence mix of Clas Ohlson today and in 5 years, it will be a big difference. This is a transition that will need to happen and that will, over a number of years, impact us both financially and in our operations. What is the conclusion of all of this?
I believe that, with the customer base that we have, with the financial strength that we have, and with the homework and a quite clear view on the future that we have, we are well positioned to actually lead ourselves into the future. Now we have talked a lot about changes and speed and exponential change and so on. There are some things that actually remain. The good thing is that what remains stable is actually the core of our business, and that is people, their homes, and the care that people want to take of their homes. We decided, as part of this strategy to redefine our market and to look into what is the real market, what does the territory home mean in terms of market? We have introduced a measure for ourselves called share of home.
How much of the consumer wallet goes to Clas Ohlson? When doing the analysis behind this, we found a number of consumer missions that is part of this wallet, and here I just present some examples. It's about organizing your home, it's about styling your home, it's about connecting your home, and so on. If we take this into monetary terms, what does it mean? In the Nordics, we spend per household SEK 9,200 on these missions per year. Basically, it's what consumers spend in taking care of their home, excluding furniture, food, and clothes. This is our market. Aggregating this, we are in the Nordics, 9,600,000 households, and we spend SEK 9,200. That gives a market size of SEK 90 billion. We have looked at prognosis. How do we think that this market will develop?
What we see is that this market is expected to grow, both because the number of households will grow, but also because the spend will grow with 3% per year up to SEK 103 billion in 2022. For us, it means that we are not only still small in a quite big market, but also fantastic opportunities to grow in a growing market. We intend to grow with this market, but also take market share and exceed 10% during this 5-year period. The home is our territory, and I will now take a slightly different angle to this question, looking at people's behavior and dreams in their home.
We have analyzed this quite a bit, and one of the conclusions is that people spend more and more, a bigger part of their wallet on buying services because they want time, and they want quality time. Also, when asking people about e-com and the convenience that that leads to, it's very clear that it's the fulfillment part that is the gap today. People say that if e-com should be really convenient for me, I want my package delivered at my home when I'm home. We look at this question from another perspective, more from last mile logistics, and the economics around that, and this was very relevant for us, not least in connection to the Mathem Corporation.
It's very clear that what the requirements to make this business profitable is that you need high density in deliveries, and you need high basket value. When looking at the current model that we have in the Nordics with all pickup place, people queuing at food stores and other places to pick up their packages, I think we all know how it looked this Christmas. Our view is that this is not sustainable. Jacob Sten will come back to a more European view on this question later this afternoon. We are very, very different in the Nordics when it comes to this, and we believe that this will not stay this way. The conclusion is only that we believe that the home is a sales channel in itself.
That, what will happen is that the logistical flows will be optimized in a different way with the home as instead the optimization point rather than a store. That means that flows needs to be consolidated with the home as the epicenter. In this, of course, services become key for the delivery as such, but also household services will be a way to actually be inside the home. Driving basket value, both in terms of what you actually deliver, but also what you can do when you're actually there. All in all, there is a big commercial upside in actually having access to people's homes. This is the reason we have decided to step into the home service market.
Today, this market in the Nordics amount to SEK 15 billion, and, is expected to grow quite dramatically with over 10% per year to SEK 25 billion within this 5-year period. For Clas Ohlson, this means that we are actually acting on a market that in total amounts to SEK 105 billion, so more room to grow. Even more room to grow actually, because during these coming 5 years, the market will grow as well. To capture this potential and to drive growth in this market, it's no doubt that online will be key. I believe that the big tipping point for Clas Ohlson will be when we manage to make e-com shopping at Clas Ohlson as convenient as running by the store. We are not there yet.
You will see during the afternoon that we have a plan to fix part of that, both in the short term and in the long term. That will be critical as part of this strategy. As I said before, in general, this is not only Clas Ohlson, it's also the character of the Nordic e-com market. We are a little bit behind when it comes to customer co-convenience and the last mile part of the retail chain in e-com. We have a very strong convenience position today with our store network. It will be critical for us, as I said, to be as convenient in e-com as we are with our store network.
We believe that the trend will be that the current model with the pickup points in the Nordics is not sustainable, and it will be interesting to even see how will it hold the coming Christmas. We also believe that the demand will be more polarized. Either people are prepared to pay and want delivery to their home when they're home, or they want it for free and are prepared to run by the store and pick it up. We will enable both. All in all, naturally, this is critical for us to succeed with this strategy. We believe that overall, the Nordic e-com model will go through quite a big change over the coming years. We have a current agenda, a current model in the Nordics, which is very much based on that stores and online operate as separate independent channels.
click and collect, you can say, is a part of this. Jacob Sten will tell you later about the agenda we have for this generation with a deadline of Black Friday the coming autumn. A lot of things happening already during the summer. We will introduce click and collect, we will introduce same-day delivery, and so on. Everything to make sure that e-com become as convenient for Clas Ohlson customers as shopping in our stores. The next generation, what we call next step here, is to get directly to the customer. Here we believe that it's about finding new routes to the customer. The MatHem corporation and taking also a stake in that company was part of this.
It's not been talked about so much, but maybe some of you have reflected upon that by Clas Ohlson becoming an owner in MatHem also means that others will not get that opportunity. Meaning that some potential competitors coming into the Nordics will not get access to this route. We will also put in a lot of effort to shorten lead times in general, and Jacob Sten will come back to this. Finally, we believe that the end state when e-com becomes really convenient is when things are delivered into consumers' homes, even when they're not home. That will happen by integrating services and products. It's one of the reasons why we believe that the home service market is so important for the long-term success of Clas Ohlson. Clas Fixare that we are launching today is one important step on that journey.
Our e-com ambitions, our online ambitions. We have already seen in Geir Hoff's presentation that we have today a 3.5% share of sales. I believe a lot to do with lack of convenience. We've also looked at our segments, so not the market in general, our segments, and weighted that and looked at market penetration, and it is at approximately 15%. It's clear that we have a lot of potential also here to grow. This we aim to catch up as soon as ever possible. We have put an ambition for ourselves to double online every other year. To summarize, our territory, the home is our territory. A SEK 105 billion market only in the Nordics.
We believe that the recipe for growth that we have put in place for the Nordics will be as relevant in the UK and Germany. We see that those countries will benefit from the same focus as we will run throughout the Nordics. The reason for this is that we will simply put online first. All in all, this is how we see the path for growth forward. I will now hand over to Jacob Sten and Eva Berg, who will take you through the first strategic building block, a unique customer offer.
Thank you. Thank you very much, Lotta Lyrå . As Lotta Lyrå said at the beginning, I'm Chief Growth Officer, and I've been in the company now, three months. As a customer, I have, as long as I can remember, been a fan, like Geir Hoff said, a fan, a Clas Ohlson fan. Coming into the company, working in the company, it has become increasingly clear for me that we have a very, very strong foundation. We have a foundation, and we have assets building up to a powerful customer offer already today. We have over the years, we have built up a position, a position very much driven by the brand, driven by portfolio, but also driven by the convenience that we offer that Lotta Lyrå talked about.
If you look on this slide here, T he brand, starting with the brand, which is the foundation. The brand is well known. It's close to 100% in the Nordic countries. It's liked, and it's trusted. Trusted, I think, is very, very important. People trust us, people trust Clas Ohlson, which is very, very important for our strategy going forward. We offer everyday solutions, and everyday solutions, stores and convenience is very, very important. We have good store locations today. We are in the most trafficked areas, which is fundamental in terms of this space. We have 20,000 SKUs, more than 20,000 SKUs today, covering a lot of different categories. We have a portfolio of well-known brand, and we have a portfolio of own brand.
Today, we have 35% of total share is own brand. We have strong positions. It's important areas like organizing, like lighting, but also in the consumable areas. Geir Hoff showed this slide before. I like to touch on especially this area because it's very much related to the customer offer. As Geir Hoff said, we have done some extensive analysis. The 40 million shopping basket on receipts have given us some very valuable insight. One, I would say, despite the strong position, there are some quite striking findings. The first one is about the complexity. The complexity and in this complexity, we have lost a little bit on clarity, I would say.
A little bit, it's been more indistinct towards our customers. By adding 15%, which we have done over the last 4 years, it has become more difficult for our customer to find our products, but also to make the right choices. A very, very clear action that we are immediate action is to simplify the product and the product portfolio. The second area is about capitalizing or commercializing on the traffic that we are having in our stores. It's very much about cross-selling, to be good on cross-selling. As Geir Hoff said, 40% of the transactions is only 1 item purchase, which of course shows a quite big improvement if we are providing the offers in a different way.
The last area to highlight is a little bit, we are acting in a very, very competitive market. Of course pricing is very, very important in terms of competition, and we are investing, not only us, but the rest of competition, a lot in promotion. We have done not only analysis, we have utilized quite advanced data science algorithm really to see how the return on those investments have been. There are improvements made. What we are putting in place is stronger mechanics, sorry, to steer, but also measure that one in to be able to optimize the margins. All in all , there are not only findings, we have already put actions in place.
What we are doing is we are also reorganizing the product organization to get more commercial focus and to get more customer focus. We have also started a full product category reset program, where we product category by product category is going to reset over the coming 1 year. It has started, and over the coming year, we're going to make this reset. In this reset, we also want to test in the shops, utilizing the shop as a pilot to see how we're going to optimize the portfolio. Another, I would say another important finding and a little bit painful is that we are good at many things, but we are not truly best on anything. We are a little bit stuck and we're not alone.
We are stuck with competition in a corner where product and price is the key element. It's very much about competing on price. The products are quite similar. Also it's very easy for the customers to switch between different suppliers. This is also a position that the more specialized e-com players are having. They have a broad range of products. They have standard products. They are very much focused on having the right competitive price and with a strong supply chain. To only focus on product and price is not a sustainable situation or position for Clas Ohlson, we need to reposition. We really need to position not only product and price, but towards solution and really add benefits for our customers.
To move away only addressing rational benefits, but also address emotional benefits. I would like to show you a little bit film because this is a quite big transition for us, and I would like to illustrate with the film a little bit how we look upon it.
Some people just love taking care of their homes, but for others, this is a tedious activity. At the same time, people would like to live their life to the fullest. Therefore, we all look for ways to simplify life, not least at home. Homes come in different shapes and sizes. Sometimes they look like homes in glossy magazines, but most often they don't. No matter who you are or how you live, there's always something that needs to be fixed. Or maybe you've dreamt about repainting or hanging up curtains in your living room to make your home feel more like you. Imagine how much time you could devote to the things you like if you just had a smoother way of getting things organized and found an easy way to keep track of what things you've stored in what moving box.
The same goes for your desk and perhaps under your desk, and even in your kitchen drawer. Our homes have literally been taken over by what's going on in the outer world rather than being a place where you can fuel up with energy. However, it's not always about time and energy. Sometimes also, lack of knowledge prevents us from being able to fix our belongings. It could be a robotic mower or a smart home device that's gone crazy. If you could fix it yourself, that'd be great. If you can't, you'd want a simple guiding support to turn to, preferably a digital one, since you want help here and now. Life at home can be simplified in many ways. Smarter and more effective homes mean less frustration and more time to do the things we enjoy. No matter who you are, where you live, or how you live your life, there's always room for improvement.
By just changing the perspective, instead of looking on products, look on people's needs in the home and focus on solution, we believe strongly that we can create much more business opportunity. Coming back what Lotta Lyrå said , by looking on how we can passionate about simplifying life in all kinds of home, that's the solution to it. If you then look on just looking on, if you're going to address the problems that people have, you need to look on solutions on different levels. It's not enough with the product. You need to ask yourself a lot of different questions, and this might be questions that our customers is asking. Do you have the products I need to do it myself?
Can I do it myself with some guidance from you? Some customers might ask, could you do this for me? There are different levels in terms of how you can solve the problems that you have at home. We are convinced that the solution to this is that we need to extend our offering. It's not enough to offer just products. We need to extend it, and we need to look on it on different levels. This will of course by addressing more needs, this will create more business opportunity, but it will also allow us to differentiate, to really come out and reposition our way from only that fierce competition area when it comes to products. This is what we call a pyramid, a very famous pyramid.
This has been a foundation in terms of how we've done the strategy, this is going to be the guidance how we do offers going forward as well. In the bottom in the pyramid, you find products. Products is going to continue to be core for us in our business. We will in the product area even more focus on having products that simplify the life in all kinds of homes. Also, we believe that products can do a lot of things if you do it the right way. On the next level is what we call guidance, this is not about guidance to products. This is guidance to the real problems that people have in the home. If you have a problem, we would like to provide.
If you want to paint a wall, we would like to provide guidance how you can do that in a better way, and we will do this through our stores. We will do that through our customer service, we will also like to do it on a digital basis. We want to be convenient. We will be wherever the customer wants it. In top of the pyramid, you have full service, meaning that we are becoming a service provider, and we are really answering the question: Could you do this for me? The aim is not to go on the top of the pyramid. All customers are different, the idea is that we will be able to have solutions on all levels.
I would like to start dig a little bit deeper into the product areas. I'd like to invite Eva Berg to the stage to talk a little bit what we do in that area. Thank you.
Sorry, screening. I will present the structure of the product offer also together with the actions that's coming. As Jacob Sten said, we have a strong portfolio with 20,000 SKUs, but we also have a very strong supplier base. We have 900 suppliers in 30 countries today. A strong supplier network is needed for an affordable, innovative, and sustainable offer. We also have a very structured organization in China and Sweden when it comes to quality assurance and also product development, of course. We need to stretch ourself and strengthen the product development, which will be crucial for future to create uniqueness. Also, as Lotta Lyrå mentioned in her speech, a broadened sourcing is needed as well as an improved purchase process. We will have to do that to be able to take the product offer to the next level.
How to grow the private label offer. We build our private label, of course, in different levels, but when we talk about the ground offer, the base simplicity, of course, is a core value. Working with, for example, as on the picture here, a Coline and a Cocraft product, we will have to add values as design, quality, sustainability, uniqueness, different values for different product. This will be crucial to optimize the offer in the private label sector. How do we then develop our offer? We have the basic offer as the ground, of course. Here we meet the basic needs among the customers. It has drivers as functionality and price, but also simplicity.
For future, we will have to work even closer to our strategic suppliers, moving away from only supplying goods to entering strategic partnerships based on jointly targets. Of course, targets will be volume, price, and quality, so even stronger basic offer. This is examples of the basic offer of today under Clas Ohlson's brand. You see the copy paper and the batteries. Big volumes, good quality at fantastic prices. When it then comes to the next level above the basic offer, we have the mid-range. Here we work with our private labels. Of course, we also meet the basic needs, but as I mentioned earlier, we have to add values. We have to add values as design, smartness or uniqueness. For future then how is this going to happen in Clas Ohlson? Yes, also here, we need to stretch ourself.
We have to show the customer that we are capable of offering smart solution at good prices and also surprise them with a little extra. We will have to strengthen the organization in Sweden when it comes to product development, but we will also have to strengthen the support in China. This to be able to offer speed to market and relevance at the right time when it comes to the product offering. Example of the mid-range is our Smart Plug. How many of you have this? Oh, what a pity. A few. 5. I would say this is a fantastic example of a mid-range with a little bit extra. It's a wall socket that you control via your smartphone that communicates via Wi-Fi. It has a built-in lamp and advanced features.
For you who do not have this product, I will show you a film how it works. Hopefully, we will sell a few more today after this session then. Okay. Another good example of a mid-range offer with a little bit extra is the Motion-trig wall lamp that you see on the right. It might not look extraordinary, but it is. It's battery driven. It's perfect when a main source is not available. It has a integrated twilight switch. It only turns off after dusk. Fantastic product, I would say, myself. The last example of a mid-range with a little bit extra is our Signature Collection, which we will launch in June. It's a tribute to our founder, Clas Ohlson himself. It's a series of smart and useful products with bold design and great value.
For example, the cooling fan at the right side. It's not only a cooling fan with the function that you can take into your home. When you take this to your home, you get a complete home because there is not so many nice-looking cooling fans today. This is also example of a mid-range with a bit extra. To the last part of the product offer, of course, the external brands. At this level, we meet the full customer needs, include all the leading brands, and this could be necessary in our destination categories, where we have to offer a full price ladder. We want to offer uniqueness. We want to enter partnerships with new innovated suppliers or brands.
It could mean that we have limited offers, we have exclusivity in our own markets, and we could start a special collaboration with new upcoming brands. If we share the belief that we have to the customer to offer clever, convenient, and practical solutions together with service and guidance, I'm sure we will make a true difference in people and customers' home. I have now described and the structure of the product offer, how we work today with basic, mid-range, and external brands. I will again hand over to Jacob Sten, who will... sorry, I forgot to give the example of the external brand. Sorry. The Google Wifi, fantastic product. I will now hand over to Jacob Sten, who will guide you through the guidance.
Thank you.
Thank you.
Thank you, Eva Berg. I said before that this pyramid was fundamental, I promise you it's not the last time you see it. I will come back to it because it's very, very important how we look on our offerings. Next level is guidance. Guidance, as I said, is not about talking about the product, is really going into the heart of the customers in the home, really trying to help them in different ways how they're going to solve the problems they are facing. As Lotta Lyrå said before, Clas Ohlson have a strong culture, we have a strong history, we have a customer-first approach, and convenience is fundamental.
If you then combine that with the locations we have in our stores, convenient location, high traffic areas, you could say that the access to Clas Ohlson is never far away. Of course, this is strong assets that we want to build on also when it comes to guidance. We would like to utilize our stores, we would like to utilize our customer service to an even stronger way package in terms of how we're going to provide guidance. This is, this is one important areas. This only, Geir Hoff showed how it was 83 million visiting on online as well. Of course, access digital is as important for people coming in the store.
You might be busy doing something in your home, and you don't want to go to store, you want to have it fixed right now where you're standing. What we will develop is digital tools. Digital tools who will help the customers with the problems they are facing. One thing that Lotta Lyrå was talking about was this video chat, I would say, like a doctor's app, and we're going to call it Clas Fixare. Basically, Clas Fixare. You have a problem, you have a video chat, and you can get direct solutions wherever you are. If you're in the summer house or wherever you are, you get direct solutions on the problems you have.
We're also looking on organizing apps, organizing app, I don't know, you store stuff and you forget where it is, and an application who can actually help you to know where you have stored different stuff. There are many more application we want to do, but this is something we will do already in the autumn together when we launch Clas Fixare. Yes, we come to the top of the pyramid. Offering full service, becoming a service provider. We have sent out a press announcement today regarding Clas Fixare, this is a little bit how we envision this area. We will, we will offer, let's say, Accessible service.
We will offer service which are well-packaged, and we will really work on areas where we have credibility, where we can leverage our brand that Clas Ohlson have. Those are the areas that we're going to focus on. It's going to be very much small house fixing that we're going to focus on. I'm coming back to that on the next slide. We would like also to complement here, of course, with the Clas Fixare video chat, right? If you can't have a Clas Fixare physically, you can have the app connected to it. T he ambition we have or the focus is, we're having is smaller home fixing tasks.
We have done some quite big research in terms of how consumers or customers look on these areas. There's a lot of things that people rather do themselves. They buy products, they rather do it themselves. There are other stuff that you. It's so complex that you rather hire a specialist. It's all those things in between that falls a little bit between the chairs. I think I can talk to myself, I think I talk to many of you, those are the things that most cases remains undone, right? Those are the things that's never happened, right? This is the bad conscience you carry around. This is the area where we want to enter.
This is the area we would like to have an accessible service, a well-packaged service, and this is the areas that we would like to provide a solution for the customers. We announced. No, sorry, let's take this slide. This is more a little bit exemplifying different areas. I t could be fixing radiators. This IT installation that never works at home. It could be fixing baseboards, putting up shelf. You can imagine, right? There's a lot of areas and we can extend those areas as well as we grow the business. We know I'm two slides ahead, so I will now go back to What. This is quite fundamental.
I will come back with Care of platform later on, but very fundamental is that the Clas Fixare will have a digital interface. We will have a digital interface that's entrance to Clas Fixare. You will describe what you want to have done, and you will then also say when you want to have it fixed, and you get the confirmation for us. It's a digital interface in terms of how you're going to get access to Clas Fixare. This was the slide that was beforehand, but what we announced earlier today was that we are entering a partnership with Pegital, and we are forming a company together and our mission is to establish and run a service business together.
Pegital is they have long experience in the service business. They own companies like Hemfrid, Fortner, IT-Hantverkarna, and Veterankraft. They are very established in the service business. Looking on a time plan, what we want to do is that we want to start a pilot. I would say, we would like to launch Clas Fixare already in the late autumn this year. We want to do it in the metro area, and we want to do specifically in Stockholm. What we want to do is that we want to test the concept, we want to test the solution, and we will also get valuable feedback from the customers in terms of how we're going to optimize it.
We don't see it's still a commercial offer. It will be a commercial offer, but we would like to utilize it as well to really scale it up in a good way for the rest of the country during 2019. The idea is then in beginning of 2019 is to have a phase launched and then with a geographic expansion throughout Sweden. We're also now evaluating partners outside Sweden in other countries as well. The idea, it's not a Swedish thing, it's going to be a thing which is on a broader scale. This slide is very, very important because to run the service business has a greater purpose. It's not only the running the business itself.
We see that we will gain a lot of benefits by having service as part of our overall offer. It will give us a quite big opportunity to sell consumable or products. I will come back to this later in the session as well. Of course, if you have Clas Fixare in your home, of course, this is an opportunity as well to sell consumables or other products. It's quite convenient for you as a customer as well, of course, having Clas Ohlson automatically filling your home stocks in terms of consumables when they do the fixing. Another example could be selling products which are related to the service.
If you, if Clas Fixare is rebuilding your storage, at the same time you are selling storage boxes, it's also very convenient for the customer, it makes fully sense. The third area, Lotta Lyrå touched on it, of course, it's about scale as well. It's about shopping basket. Of course, by being in people's home, by offering service, it will also provide quite efficient solutions when it comes to deliveries for the customers. This is, of course, a very important reason having as well service as part of the portfolio. The last bullet, not at least, this business, if you're going to have the focus we have, it's about knowing our customers, understand what drives them, what bothers them, and how their life is in their home.
This is fundamental for us to get those learnings as well. Coming back a little bit to what we call about the repositioning. It's very much to summarize a little bit. It's going from being product-driven to need-driven. It's going from looking on a pure product offer to a complete offer. Of course, this repositioning is mainly driven by the change offering that we are doing. We will also change our marketing, our marketing communication. We will much more focus on the brand and based on the brand telling what the brand stand for, that will create leverage as well in the rest of the communication. At the same time, we will also change a little bit the style, how we communicate, and I will show you a film about the new communication style. Sorry.
I think we all feel a little bit guilty in not being really home when you're at home. This is actually the brand film. This is a brand film that we will show on TV digitally in the autumn. Really, it really embodies the brand position statement, what we stand for. We look on the real problem as home, and we're really trying to do something to simplify. We will come back more how we can do that in this concern. This has nothing to do with the brand film. This has to do with real life. Through our consumer research, we have really spent a lot of time understanding the customers. If you focus on the home, the best way is to spend time in their homes.
We have even moved in for a couple of days, not too popular, but it's really to understand the brutal realities. What is it? What is the problems that the customer have, what could we do to really simplify the life for them? This is real pictures. One thing you learn is that the circumstances and the homes are very different. There's not one solution. There's a lot of different solution depending on how you live. If you live in a small flat or in big villa, there are different needs. One findings we find is that there are two elements which are crucial: time being very, very important. People don't have enough time to do what they want to do. Another one for many people is space.
Li mited space, how do I deal with that one? Because I still have the same need. Connecting those two together, one area which is very important for the customer is organizing the home. What could I do? f they don't have enough time, not enough space, what could I do? What could Clas Ohlson do to help them to organize their home in a better way? I promised a pyramid, it's back again. So, Lotta Lyrå talked about there's a couple of, let's say, consumer missions. Within the ambition, the total market we talked about, there's a lot of customer missions that we would like to address, one being really organizing your home.
There are many companies who is focused on organizing, but we are convinced that by looking on the solution, but extending the offer to have a complete offer, we will be different. We will make a difference. We will really go after the real problem that the customers are having. The ambition we have is to become an obvious destination, to be the destination. If you have a problem around organize, this is a place that you should go to. This is one example, just to illustrate. This is one. Organize is one example. Our idea is to take other consumer mission as well and to do the same thing. Organize is an obvious one. There's Research and it's Heritage. We will do other one as well.
What we will do here is that, in this territory, we deepen the assortment. We have a solution for the garage, for the kitchen, for the wardrobe, in all situation when organize isn't a problem. We will have all those guidance tools that we talked about, having digital support in the shops, support through customer service. Of course, we will have Clas Fixare as a solution as well, doing an organizing for you. It's demonstrating a little bit the difference, only focus on product and really adding different dimension and how we can create a much stronger overall proposition. Just a very, very clear example, and this is just an example.
If you, for example, you have a messy wardrobe, you can buy boxes for us, storage boxes, and you can then buy that one, fix yourself how you're going to organize your wardrobe. You utilize some application we have to really know what you have in different boxes, or you actually ask Clas Fixare to come and rebuild your wardrobe in totally. Just to illustrate. Some might pick one, some might pick all of them, but it's really showing a little bit the direction we are heading for. To finalize, just to summarize that what we talked about, I started off talking about that we have already a strong foundation. A foundation, of course, we are proud on, that we are building on.
There are some needs, there are some inefficiency that we have that we need to address. Therefore, we're going to do a product category reset to really to become even more relevant. We're going to reposition and really be a solution provider in all kinds of homes. Then Eva Berg talked about demand spaces, creating new demand spaces when it comes to our products. Also, we're going to extend the private labels, our own brands in the portfolio. Lastly, then, to top of the iceberg is really Clas Fixare, which has a greater purpose, not only providing service, but really support the overall business. I will not hand over to anyone now. I will hand over to a coffee break. Maybe, when are we supposed to be back here?
In 20 minutes.
2:50.
Thank you very much. There went easy listening music off. Doors are closed. Welcome back. Hopefully, you had some coffee, something to eat. Maybe you visit our nice stands outside, took a good look at our products. Maybe you mended your phone if you had the capability to do that. Hopefully, you are now refueled and energized for the last leg of this. I will now start talking about the second building block. Jacob Sten started talking about the first one, the unique customer offer. I will now talk about outstanding customer service. A part of customer service is the store network we have. I will start presenting now. Later on, I will invite Fredrik Urbom on stage with me.Lotta Lyrå have earlier today, Jacob Sten has followed up with talking about our customer journey.
How does Clas Ohlson's road to the customer heart look like? From the Care of platform through the product offering, service offering, store experience, and online experience. What I will try to explain now today is that we see that not e-only as one part of this journey, also as a part of the total journey, we think that the stores really fit for that purpose going into the future. This is where we come from. I said it earlier today, we have been rolling out stores the hardest we could previously. The stores has, in Clas Ohlson, had the lead role, maybe the lead role of the company.
Growing in number of stores, celebrating, really getting energy from the store growth historically. We have been measured on number of stores, like-for-like growth in stores, and the future potential has always been around how many new stores. When Lotta Lyrå earlier today said that our new like-for-like is sales per customer, how does then the stores fit into that equation? To position the stores as a part of the journey total sales per customer, we need to see the use of the stores in a different way. We need to see the use of the stores as the in real life contact with our customers. To do this, we need to adapt both the store network and the store per se to fulfill that need. Jacob Sten explained how the customer now can choose within the pyramid, either they want a product, guidance, or full service.
We will secure that the store network in the future support this with convenience. We will have a store network that's fitted for the customer needs in the future, where the customer want to have the stores, where they want to use it, and how they want to use it. It is given that for a number of years in the future, the stores will play a vital role in selling products. It's also quite given in the same time span that the stores will have a role to play as a click and collect, somewhere where you can come and get your products. We already have click and collect, at least in two markets, and we really see this as a competitive advantage going forward.
In U`K this was first out as a pilot, and then in Norway, we now have click and collect, and in Finland and Sweden, we will fulfill click and collect during this summer 2018. It is a competitive advantage because we have a widespread store network throughout the whole Nordics. From north to south, from inner city to outskirts, there is a Clas Ohlson store. To utilize that store to meet the customer physically, we think that is a strength also going into an online world. Lotta Lyrå mentioned feeder stores. I will stop a little bit on the feeder stores because this is really where we see we can utilize the store network we have today. A feeder store is a store with a little bit extending stock, little bit extended range.
Some technical facilities which enable that store to fulfill an online order, which means that a customer buying in Kiruna also can have same day or next day delivery from the Kiruna store. It means that we don't need to build a number of smaller or bigger DCs around in the Nordics to enable this capability because we have the stores already rolled out in the countries. We will set up a network of feeder stores. We will, as here, as everywhere, we will start and test. Actually the first test going alive now in start of June is in U.K., where we start the first test of using one of the stores as a feeder store.
By using also advanced analytics, we will be able to do this in a way without building up too big stocks in these stores because we will know which products that will be demanded around the stores. Jacob Sten has also talked about guidance, how important guidance will be building the total solution for the customer. We think that even here, the store have a vital role. The stores, as a guidance place, will have a role where people can come to experience and learn. Out here today, you can get a shield for your phone, mobile phone. You can get how to learn by that. We also want, I don't know, Jacob Sten had a picture of learning how to drill holes in a wall. I don't really think we're going to go there. I think we will try to avoid that.
We will use the physical store presence to invite our customers in to create a place where they can experience and learn. Learn how to use our products, be inspired how to solve their problems, to be able to go home and fix it themselves. Full service, yes, of course. The stores will be an arena, Jacob Sten said it, you can meet a Clas Fixare in a store. You can order a fixing appointment in the store, or you can follow up on it in the stores. The store also provides another thing. The store provides an on-site service. We will still sell physical products that needs maintaining, products that needs to be followed up. You have after sales, and all of this we will be able to take care of in our stores.
The physical meet between the customer and the store will be the onsite service. Tool rental. Rental and pooling, I think that's one of also the future demands from the customer. They don't want to have everything in their own storage. We can supply them with that. I think also knife sharpening, we can sell subscriptions, we can recycle. The stores and the customer presence in the stores have a lot of roles to play. We have a store network today that is quite widespread throughout the Nordics, and we have to do something with it, Fredrik Urbom, don't we?
Yep.
Yep.
Right.
To take you a little bit through how this, the store network, the network we already have today will be taken care of, I will invite Fredrik Urbom up. I must say one thing before you come, because I had one dream, and that was to say that my previous country, Norway, would be bigger in number of stores than Sweden today. Unfortunately not, almost. Fredrik Urbom , the seat is yours.
Thank you. Well, since we don't really measure number of stores, I think that competition is over. If we measure number of years being at Clas Ohlson, you certainly beat me. I've been here for 14 months at this beautiful company and be part of this strategic planning. I will take you through now a little bit regarding our store footprint and also the store format matrix, how we see upon that going forward. I think, looking at this, basically what we want to achieve with the store format and the store footprint is to find out how we can serve the customers in the way the customers want to be served and make sure to have high convenience and also increase sales per customer. That is basically the trick.
Clas Ohlson, as you mentioned, Geir Hoff, has been on a tremendous journey going from a mail order company becoming a retail company. We have only in the Nordics 219 stores today. The beautiful of this is, I would say, the accessibility to Clas Ohlson, easiness to reach our stores for the customers. We could also see that we've taken this further to the next step. That means that moving forward, that is that customers, if we talk about visitors, traffic coming to our stores, we can see that we have a steady development of that. We can see that if we measure on like-for-like sales for our stores, we have a steady development on that. We can see that all these stores we have today in the Nordic arena are contributing to the company.
What does that mean, really? Does it mean that we can relax, take a step back, and do nothing? I think if we want to be a little bit self-critical here, there are room for improvements. If you look at this picture here, you can see that basically in terms of store size, all the stores are basically independently, if they're located in south of Sweden or if they're located in north of Norway, on the same size. All the stores, if they are in the city location or in an external location, basically carrying the same assortment. Here we see room for improvement that we can fix the store format and the format matrix that are more focused on the specific customer needs where we locate the stores.
If we take a move into the store format matrix as we see it, you could say that if you were to go out today, the vast majority of our stores is what we call Clas Ohlson normal stores. That's a store between 800 to 1,200 square meters. This is the essence. This is the backbone of the store footprint. That will continue to be an important part, we will, as Geir Hoff said, add functionality to these stores. We will make sure that the one that we need can have the feeder store capability to serve other stores, to serve partners or delivery directly home. The second important part of this sales channel agenda is of course that we talk about and we come back to it, that is the online channel.
How we can make the convenience, as Lotta Lyrå talked about, the accessibility, the same way as a shop in a store that you also can do online. We'll come back and talk a little bit more about this regarding the role of MatHem in this strategy. We also think there are need for more different type of formats to meet the customer's needs and to be convenience. Last year, we launched pilots, what we call Clas Ohlson Compact Store. Smaller store formats is accessible for the customers, and we will continue to drive this type of formats to find strategic locations in the Nordics arena where these stores could play an important role. We will also look into how we can connect relevant services to these store formats. On top of that, we also see the need for other formats to have the high convenience for the customers.
We talk about two new formats that we're going to launch, and I will talk about brand stores or concept stores. That will be an even smaller format. Imagine, Jacob Sten talked about the organizer function. These stores could be the store where we only take part of one specific part of the offering, like organize your home. Imagine a store where you step in and have all the smart solutions you need to organize your home, for example. We also think there is a need for even bigger stores. That could be outlets. We know that the Norwegians tend to come to Sweden and like to shop, and they are pretty greedy. There could be an opportunity here to add this type of outlet stores. I will not say where, but you can imagine what a good location would be like.
Doing this transition then, taking this store matrix into reality, looking at what we have today with a lot of normal Clas Ohlson store, how will we do this journey? Basically, what we've done in this strategy process is that we looked into each one of the single stores. Each store of these 290 have an individual plan. What are we going to do with this specific store? That could be relocations. If the shopping pattern moves, we will move with that. It could be downsizing. If we find that this customer base is too small, we need another format, smaller size. It could also be transformation for existing stores to grow that into an outlet store. We will not launch a full program of store optimization or store closure, as you call it.
The reason for that is, well, it's a lot of different reasons. As I said a little bit earlier here, today, our stores are performing well. We have good, solid traffic, we have a good contribution, and we have a stable like-for-like growth in the stores. We can take this step by step. We look into the near future here. We have approximately 50 of these stores up for renegotiations here within the coming two years. We will then take that opportunity to decide what role is this store going to have in the future store format in order to take care of all the offerings Jacob just described. By doing that, we can avoid taking fast decisions, driving high sunk cost for the company.
Just to give you 1 concrete example, what we're doing as we speak, we said that the compact stores has been successfully launched, and we have seen that we have wide gaps. There are space to grow in certain important metropolitan areas, not at least in Stockholm, but also in Gothenburg. Here we will in the 5 next months, launch 5 new compact stores. 1 was open today in Tyresö. Last week, we opened in Märsta, and we will continue with that rollout. On top of these metropolitan areas, Gothenburg, Stockholm, we will also launch a store, a trial in a smaller city in Ljungby, where we know there is a need for Clas Ohlson, but the customer base is not big enough to open a normal Clas Ohlson store. That will be an interesting pilot we launch.
If that turns out well, which we believe it will, that will open up a lot of opportunities for smaller cities to be covered by Clas Ohlson. We can also see, having these Compact Stores, that we have seen a good flexibility, we have seen a very much positive feedback from the customers coming to these stores. I don't know how many of you have been to the Hornstull store, but it's a lovely store. If we talk about the metropolitan areas, how could this look like if we zoom in to one specific areas, talk about these different store formats, the store matrix, so to say? What we will do basically is that when we look into these key areas for our foundation of the business, is that we look at what type of store should we have in what location.
What type of assortment and service should this specific store have to serve the customer in the best way? We will also make sure that we have a clear profiling between these different formats, so it's easy for the customer what he or she can expect entering this type of store. So this is just an example of how this could look like. What we also will do here is to make sure that in these microclusters, that these stores will work much closer together, both from an operational perspective, that the staff, we can share and transport knowledge between the stores, between the stores and resources, of course, but also from a replenishment perspective, where we see that these normal stores will become key in replenishment to the compact stores to have efficiency, fast deliveries, and also high customer value. Good.
That was short about our current store footprint and the store format matrix that we're going to continue to work with heavily in this strategy part. I will hand back to you, Jacob Sten. You will take us further into the digital arena.
Yes. Thank you very much, Fredrik Urbom. You will help me later on as well. Listening to Lotta Lyrå before about our mission in making online convenient for customers. I think it's very clear that online is not a separate part of our strategy. In fact, it's fundamental. It's, in fact, it's going to be the whole customer journey going forward is going to be digitally orchestrated, and I will talk a little bit more about the Care of platform later on. Who's going to be the one point of contact, and it's going to be as well the access point the whole world of Clas Ohlson. Before I do that one, let me go into, let's say, the current situation.
If you look on the Nordic eCom model, here you have examples of Sweden, but you see similar pictures as well in the other Nordic countries. If you look on this slide here, you see that the Nordic eCom model is very, very different compared to a more international perspective. The key difference is the collection points that we have in Sweden and in the other Nordic countries. We don't believe, as Lotta Lyrå said, before, we don't believe that this model is sustainable. It's not sustainable from a consumer behavior perspective. It's a halfway solution, not fully meeting the customer's need. It's not sustainable either from a setup perspective.
T his is example of what happened with Christmas, but it's also when it comes to peak volumes. It's also related very much in terms of incentivizing the guys having the service point that is not sufficient enough. We don't believe that this is the way forward. That's also how we have based our strategy when it comes to online. This is a slide that Lotta Lyrå showed, and I show it again because I think it's very, very important, and it actually illustrates very much where we are heading. If you look on the situation right today, we have, as we said, we have 3.5% eCom sales of total sales.
Looking on our current sale, there's a couple of basic stuff that we are behind competition. Things that we take very, very serious, things that we are very, very committed to fix very, very soon. I will come back a little bit more in those areas and what we are doing to be able to fix those before Black Friday. As I said, we don't believe that the sustainable model is, or the current model is sustainable. Instead of trying to optimize the current model, we rather move ahead and look on how can we shape the future and how can we go towards ambitions. We want to drive the transformation in the Nordic markets. We would like to do that with an omni-channel approach, and we want to do that by entering into people's homes.
We will do that by utilizing our store network that we talked about. We will utilize that with our brand, and most important, the trust that people have in our brand, and we will do that with all the services that Clas Fixare that I talked about before, entering the home, being present in the home. They are very, very important steps that we would like to utilize. If I look on the direction, the direction that Lotta stated very clearly, it's about creating convenience online. That is the ambition and the key bottleneck is the fulfillment model that is not convenient enough. What we want to do is basically to offer our customers much more options. Options which is convenient for the customers.
Of course, the fundamental, which I showed in a triangle before or pyramid, sorry. It is really about the service. Coming into people home will allow us to provide efficient, but also that we delivery, joint delivery together with services and products. That's the same logic when it comes to MatHem, by delivering food, we can also deliver very efficient consumable as well. One very clear direction is create this convenience when it comes to fulfillment. The second thing, which is related, is to make Clas Ohlson much more accessible. Accessible in terms of everything that we offer. This is the pure purpose in terms of the Care of platform, to really to make it much more accessible. I will come back with much more details in terms of this area.
If you look on what we are doing right now, this is not just a dream. T here are actions that we are doing right now in terms of this direction. Launching new routes to market. Fredrik Urbom will come back a little bit how we utilize MatHem even stronger. We have earlier this week, we have, as well, signed a collaboration with Budbee, a commercial collaboration with Budbee, which we will utilize in the big cities in Sweden. We're also looking on opportunities in other countries outside Sweden as well. We're also looking on shorter lead time. We talked about feeder stores to a large extent and looking in terms of how we can play that in terms of the game.
There are activities really aiming for the direction that we're heading to. If you just demonstrate, this is pretty much how, let's say, it's not only reflecting Clas Ohlson, it's pretty much reflecting the market. A big portion in terms of delivery is very much about delivery points or collection points. You have some click and collect, you have some home delivery and also some delivery that you do together with services or other reason when you are in people's home. What I just explained, this is the direction we want to go. It's Lotta Lyrå talked about polarization, right? There are people who want to have convenient solutions. They would like to have a home day or the same day delivery in people's home.
It will allow us to make very efficient joint delivery together with products and services which you have in the bottom. We would like, as Geir Hoff and Fredrik Urbom talked about, explore much more click and collect, which actually becomes a very convenient solution because the locations is in high traffic areas, but it's also convenient in the sense that it's quite affordable as well for the customers. It's a clear direction what we want to do when it comes to fulfillment.
Coming back to reality, right now, I said before that there's a couple of basic where we are behind competition areas that we would like to urgently address, which areas where we are fully committed to fix before Black Friday or even before in many of those cases. We introduced in new June, July already, let's say one-click payment. We are shortening delivery lead time, which has been an issue for our customers, and we are reducing that with 70% if you talk about inventory lead time. We're implementing. This we are doing from August, September.
We are implementing a new engine, which mainly will have an impact in terms of the mobile experience where we have been behind in the past, but will also have a positive impact when it comes to the desktop. This is something we will do before Black Friday, Christmas. As Geir Hoff said before, we will implement click and collect in all our countries, and this is something we do during the summer. Last but not least, we also now really looking on new resources. New resources in areas, new competence there, which is vital for us to be able to fulfill the strategy we have going forward. This is something that have already started.
It's not only about basic, it's also about improving the commercial agenda. Where we're looking here, it's not a complete reset, but we are looking really how can the assortment better fit the needs that we have online. This is about the product, and it's also about the price point to be able to have a better commercial fit. We are looking on the marketing strategy, which we are transforming as well, much more targeted, more digitally, really supporting the online sale in a better way that we're doing today. Fredrik Urbom will come back in terms of what we do with MatHem already now as we speak, and he will talk more about the details, what steps we are taking.
I mentioned before with what we had done with Budbee when it comes to Stockholm, Gothenburg, Malmö, in Sweden, something we will launch already this autumn. We would like to commercialize and have some attractive offers during the autumn at Christmas time, which I will not talk about here today, but that will come in the autumn. This is pretty much. Looking on very clear ambition what we want to do, but very much critical in terms of the situation and sense of urgency in terms of what needs to be fixed before Black Friday. I would like to hand over to Fredrik Urbom to talk a little bit about MatHem, the way to the future.
Thank you, Jacob Sten. Hello, everyone. Back again. As Lotta Lyrå said, when we started this development of the strategy, we've also started to implement part of the strategy as we walk along. One part of the analysis we did was look into different business segments around us, and we could see that food online is a rapid growing area, today adding up to SEK 7.2 billion, growing with more than 30% annually. We think also that this will impact consumer patterns, how people tend to go shopping and shopping destinations. This could have a major impact the coming years, how we look at external shopping areas, for example, where food has been the primary destination for that. We think also with increased convenience that will require customer focus.
That means that we talked about in order to have the convenience, deliver all the way home to the customers, you need the scalability, and that is crucial with the value of the shopping basket to get this. I think this is an opportunity that we saw, but also MatHem saw together with us, that combining our two different business models together, we could do something really great together and with increased convenience for the customers. What is then the main purpose of going into this strategic partnership? Well, from an operational perspective, number 1 priority is, of course, increased customer convenience, that we can have same day or next day delivery to 50% of the households together with MatHem in Sweden. Also we have other synergies coming into this. We have a complementary sales channel with non-overlapping customer base, MatHem We also see business opportunities.
You might ask yourself, well, B2B, why are you talking about that? You said you're going to focus on the home. Well, there's a lot of companies out there taking care of people living in their homes. If you think about the healthcare, for example, with service homes. Imagine having MatHem's portfolio together with Clas Ohlson portfolio. We could basically cover the needs they have. These companies don't have to run to the stores to shop. They can do it through us. We deliver it. They take care of the customers instead, or patients. Also quite important is that we could learn as a company, Clas Ohlson, quite a lot from MatHem, actually, not at least in the digital arena. The way they work with digital marketing, the way they work with CRM and CRO, there we see great opportunities to get smarter, faster in the things we do.
We are today live on the MatHem. We have divided this project in different phases. The first phase that we are still in is, to say, the pilot testing phase. Here we have focus on testing processes, routines and systems so it works. We launched very small assortment on the MatHem warehouses in Malmö, Gothenburg and Stockholm. The last phase now we're entering in phase one is that we will in beginning of June go live with a much broader assortment, up to plus 600 SKUs. We will focus on Clas Ohlson's own brand, everyday consumables. We will also start to talk about this with combined marketing and campaign activities, what we haven't done until today. Next phase after that is that we see an opportunity not only to have everyday consumables at the MatHem marketplace.
We think also customer would like to buy products that are not consumables. You could see, for example, hand tools, power tools, or other type of products there. They will be at the MatHem marketplace, but will not be a standard stock item. Instead, we will add cross-functionality and cross-docking, so neighboring stores will be the anchor stores supplying to MatHem. They will pick up with the 250 trucks, the products, and we will still be able to meet next day delivery to the customers. By doing that, we have a scalability that is enormous because the warehouse itself will not make any obstacle to that. We could launch 1,000 of products on that marketplace. The third phase is moving into that we could combine and use MatHem as a last mile through online delivery for Clas Ohlson.
That means when you go into our homepage, you have MatHem as one delivery option all the way to your home. We think combining these three different things will make the offer very strong. We are very much now looking forward to weeks 23, first week in June, when we will go live with this and kick off the marketing and promotion around this activity. Back to you, Jacob Sten.
Thank you, Fredrik Urbom. Thank you. Hopefully by now, it's crystal clear for everyone that for us, providing convenience online and entering home is core in terms of our online direction going forward. I think MatHem is a very, very good example how we're going to do it, but also what we discussed earlier with Clas Fixare coming in the home is the second one. Just to pinpoint that those are two critical element. The third element which I will go into now in terms of ambitions is we have talked a lot about Care of, and this is very important for us going forward. To say some strong words, it is going to be our gravity in the future, not only from an online perspective, but for a whole business.
It's going to be the one point of contact for our customers, and it's going to be the access point to the whole of Clas Ohlson, including all our services or offerings, sorry. Of course, it will drive loyalty. That of course, but it's so much more than a loyalty program. It is a platform, a complete platform that we're intending to build up. What does it contain? T his platform will contain. You will here be able to buy products online, of course. You will have, let's say, traditional loyalty components, like member events, earning points, et cetera, et cetera. You will have the guiding tools I talked about before you will find on this platform. If you have a problem, you can get digital help with tools.
You will also have the entrance to Clas Fixare and all the service offering we will have. Quite, let's say, a quite comprehensive platform. We're going to, as we said, we're going to have one point of contact into this platform, and it's going to introduce the world of Clas Ohlson. If you look on, there's a lot of companies around having loyalty programs, I have the problem with wallet because I have to throw them away because there are so many, and you can't keep track on it. I think one of the challenges throwing away is that it doesn't add enough benefits. Benefits customer, that's why you are part of a program. I think this is the key thing, what we want to do. We don't want to do loyalty.
We want to create a real benefit, something which matters for the customers. We have talked today about simplifying life in all kinds of home. It couldn't be a better purpose. If we have a purpose to help people solving the problems in the home, we have a perfect purpose for people to join our platform. That's the thinking we have, and that's coming back to the pyramid I talked about before. Geir talked earlier about we had 2.8 million Club Clas members only in Sweden and Finland today. That is a limited, I would say, loyalty program. It's not a full-fledged loyalty program. If you extend this one, I personally, we don't see any reason why no one in Sweden shouldn't be part of this platform.
That's the ambition we have, and that's in Sweden, that's in Norway, that's in Finland, that's in the country that we are addressing. Just have that as a perspective in terms of the direction we want to take. The platform as well, I put it's connected. It's an, let's say, it's an ecosystem. You have a lot of touch points. The whole idea with the platform is that those touch points is connected. Whenever a customer enters Clas Ohlson, we have an interaction with the customer. We could offer products, services, guidance on every single touch point when they're in, and we can guide them in other matters as well. That's the idea in terms of an integrated approach.
We talked about MatHem before, of course, we would like to allow partners as well to this platform to make this platform even more powerful. This last slide, little bit schematic, but a little bit the thinking we have, is that we are now starting up. We are starting up a pre-study where we're going to look on how is the customer experience going to be in terms of this platform and what is the system architecture going to be. The direction we have is that we don't want to build a huge, big system. We want to have an approach which is a modular approach, a step-by-step approach. This platform will never be ready, and we have to build that over time. The pre-study has started.
We will launch those services that we talked about before, guidance, entrance point to Clas Fixare. That we will do already Q4 this year. Gradually, you're going to see components adding to this platform. By that, I would like to close the session, not only for online, but also for outstanding customer service. I'd like to hand over to Lotta Lyrå, who's going to talk about smartness and simplicity. Thank you.
Thank you. Now, you have heard a lot about how we aim to drive growth through the unique customer offer building block and outstanding customer service. Now we come to the third one, which is about smartness and simplicity. That one is very much how do we intend to operate this business and what ambition level do we have with that? I think it's been mentioned a number of times today already that there is a very high demand on increasing speed to market in how we work, in how we deliver new products, in how we develop our channels. This also means something for how we run the company. Agile is one of those words that is used many times, but it's actually difficult to find an option and an alternative to that.
There is a need right now to be very, very agile and to have an organization that is fit for purpose to be exactly that. I think it's also fair to say that we talked about before, the competitive landscape is intense. I think you also mentioned, Geir Hoff, that there is quite a lot of fighting going on around consumers' wallets. In order to be able to live in this world and still have healthy margins, there is a need to be very, very lean and cost efficient. I would say all in all, with all the analysis and the work that we have done, throughout these months, we have a job to do here. It's about the efficiency in our ways of working. It's about the performance when it comes to our purchasing.
It's about also how fit for purpose our organization is. I do not intend to launch a big cost program. That is not what we are doing today. We are trying to signal with putting in place this building block in the strategy that this is an agenda that need to live now, tomorrow, and forever. It's just a way of running the business. What will it mean then? Well, I think first of all, a lot of good things have been developed and done in Clas Ohlson during these 100 years. The big step we need to take now is to be a lot more systematic. Eva Berg mentioned it before, it's how we develop our products, it's how we do our sourcing, and it's how we operate our logistics. What is that about?
It's actually partly about leveraging technology that is out there. We would not have been able to get the conclusions out of the 40 million receipts without using algorithms in a new way. There is a lot of tools out there that can help in becoming better and more efficient in all of these areas. The second bullet, increase process quality, it's basically that we need to be a lot more structured in how we work and tough in our way of doing things. It's also how we measure performance naturally. Finally, this leads to also that we need to review our competence in some areas and look into how we also stand strong in being systematic within these points.
We talked before about the 15% and the tail that we have, and I think that's one of the most important points for us to address in the short term to have a range that is more efficient. The reason for that is that this drives cost and tie up capital in many ways. A non-performing product, part of the tail, will bind capital, and it will drive a lot of other costs. That's why what Jacob Sten talked about before, resetting the categories, the product range that we have, will help and create improvements in both in the P&L but also on the capital side. I believe that part of the sourcing work we need to do is to look at optional sourcing markets.
Today, we are very much focused on China, but it's natural today to look at India, Vietnam, and other places to make sure that we constantly can challenge the price pictures. Remember, we are for all kinds of homes. We want to create space in people's wallets. That means that we also need to be competitive on the price side. Finally, we have done some benchmarking when it comes to our organizational efficiency, and we know that we have a job to do also here. It's been mentioned already, but I would just like to highlight the totality, the conclusion around our logistical setup. I think it's fair to say that we have a very competitive setup in delivering goods from our DC to our stores. That is in good shape and performs well in relation to peers.
What we have investigated more in detail is how to become as competitive when it comes to the e-com deliveries. What we have concluded is that we will do a number of solutions. We have invested a lot of money in the DC, and we have optimal, lot of optimal things there. We will try to leverage that but add an automation component to the e-com flow, which is today very manual. Hopefully we can handle a lot of the big flows through that. Secondly, as been mentioned, previously, we will use a feeder store setup to serve customers requiring short lead times, and it will also help us with the geographical spread north of Norway and north of Sweden and parts of Finland who might be a little bit remote to keep lead times down.
We don't, if volumes become substantial, we don't outrule to use with 3PL, work with 3PLs also, maybe in the metro areas. Today we see that we will start with the feeder store setup. MatHem has been mentioned. We are already now using MatHem facilities to store, or about, just about 600 products, so that is already part of the supply chain. An important platform for the smartness and simplicity work that has been worked on for many years now is the program called SCORE. This is a program that is actually closed now to its big release, we actually made a go decision some days ago. We have high hopes to actually get this done now. What this will give us is the possibility to scale Clas Ohlson in a very efficient way.
I would like to tie in to some of the big questions that have been brought up here. For example, how do we make sure that we get the most out of every store? One key capability that we must have to do that is to be able to tailor the assortment based on the customer base. Today, we do that completely manual. That means that it's almost impossible to do it. With SCORE in place, we actually get a platform that allows us to do that. We will also get a base for driving sales and supply planning in a completely different way with the customer in focus. What will that give us? Well, it will give us the possibility to secure availability on the shelf without tying a lot of extra inventory. Finally, we talked about promotions and other things.
SCORE will also help us to optimize the commercial planning. All in all, I cannot think of a better timing than getting this release done now to actually also be able to use some of the benefits here to drive the business further. What we have done as part of the strategic review is also looked into the remaining part of the SCORE program. There was also an e-com customer component at the end of the SCORE program. We have reevaluated that based on the Care of thinking and concluded that we want to use another set of architectural principles to build that part to develop towards the Care of platform.
We will therefore descope these parts from the SCORE program and thereby close SCORE by the release that is very shortly coming up. That means that the total investment will still be on par with what has been previously communicated. This means naturally that the program in itself has become slightly more expensive since the e-com part has been moved out. This was a little bit about the smartness and simplicity. A little bit short maybe in relation to the other two building blocks, but critical, I would say, for the operating margin target that we will come back to in a minute. Before we come to the financial goals, I would like to welcome Göran Melin on stage to take us through a little bit the current financial situation.
Thank you, Lotta Lyrå. Already there. Yes, I will now give you an update of our current financial position. As you will see, we have a strong financial position, and this is a foundation for our future growth initiatives. Looking at sales, during the last 5 years, we have had a solid sales growth driven by new stores and supported by a healthy like-for-like growth. From the beginning of 2017, we have had a weaker like-for-like growth due to the changes in consumers' buying patterns. Still, we have maintained a positive like-for-like growth. Looking at e-com sales, during the last 4 years, our e-com sales growth have outperformed the market development, but from low levels. The e-com share of sales rolling twelve is 3.5%.
Looking at our sales divided by market, Sweden represents 45%, Norway 40%, Finland 12%, outside Nordics 3%. Our operating margin has been on healthy levels during the years, but affected by expansions into new markets. There has been a turbulent currency situation during these years. We have had a decrease in the Norwegian krone and an increase in the US dollar, and both of that is negative for Clas Ohlson. Since Q3 2017-2018, we have made substantial commercial investments due to the intense commercial climate impacting our margin negatively. 2017-2018 is also affected by one-off costs related to the strategy work as previously communicated. Investments. We have had higher investment during the last couple of years as an effect of our investment in our new IT system SCORE.
The investment has been on stable levels during the last years. Looking at CapEx development by type of investment, there has been small changes in the split during the last year, except for the last year now when we, as a financial investment, bought the shares in MatHem in December 2017. Our cash flow has been strong over time, and if you see on the curve, the Q2 2016, 2017 was affected by timing effects in accounts payables. Now in Q3 2017, 2018, it includes the acquisitions of shares in MatHem and also planned inventory buildup that I will come back to. Looking at our balance sheet, we have a strong financial position with small changes during the years, except for the planned increase in inventory and also the acquisition of shares in MatHem.
We have a net cash position, and we have an equity asset ratio above 50%. Looking at inventory, it's been quite steady, at steady levels during the years as share of sales, and we have variations between quarters and the high inventory levels at Q2 as a preparation for the Christmas period. We have increased the levels of inventory end of Q3 as a risk mitigation when implementing our new IT system. We have a net cash position, and we have so for the last four years, and even if you see it varies between the quarters, it's been on the positive side. The equity asset ratio has been about 50%, and it's small fluctuations during the years even if it fluctuates for different quarters.
Looking at dividend, the dividend payout ratio has been in line with our dividend policy, meaning distributing more than 50% of our net profit. The payout ratio during these 5 years have been between 72% and 96% of net profit. We also had a yearly increase of dividend per share during the last 5 years. That concludes this short financial update. To summarize, I want to say that we have strong financials to build from going forward, we have an equity asset ratio above 50%, we have strong cash flow, and we also have a strong cash position. With that, back to you, Lotta Lyrå.
Thanks, Göran Melin. That was looking at the history. Now we're going to look into the future. What goals have we set for ourselves? We have based the goals on the business objectives that I have shown a number of times today. The top objective, so to say, about being a meaningful and trusted brand is very much connected to our customer base. We will there have targets measuring exactly that, but of course, also customer perception and coworker e-perception of the brand. The lower, the bottom part of the objective is about sustainable, profitable growth, and there we have decided to have 4 different goals: sales, profitability, capital structure, and dividends. I will take them 1 by 1.
The sales target is an organic sales target. We aim at having on average 5% growth during the coming 5 years. We believe that there are 3 main levers that will help us deliver that goal. First of all, we mentioned it a couple of times, it's to increase the sales per customer. It's about increasing sales per square meter. It's also about doubling sales online every other year. The profitability goal, the EBIT margin target, is that we will aim for an operating margin between 6%-8% during the coming 5 years. Apart from the growth that I just showed, which is, of course, a very important enabler to reach this goal, we also see that the share of own brand increase that we will see will support this goal.
We will work with making our organization more efficient. As I just talked about, we will increase and improve our ways of working within product development, sourcing, and logistics, and become more systematic, and that will also support this goal. During the coming two years, we will invest 1%-2% of the underlying EBIT margin in the transformation of the company. You might wonder, what are we going to do with those money? Well, you've seen one example today where we are launching Clas Fixare. We will build up those type of concepts and put that into reality. We will develop digital tools that have been mentioned. We will reset our product assortment in order to get a more efficient range, and so on. This money will be spent on enabling the transformation that we have described today.
The capital structure target is that we will keep net debt to EBITDA below 2, and we will do that by keeping investments in line with the financial position, cash flow, and credit facility. Finally, the dividend policy. I guess most of you know, but what it says is that the dividend shall be at least 50% of earnings per share after tax, taking into consideration the company's financial position. We are, as we have mentioned, going into a quite intense period the coming 2 years. We believe that with the financial strength that we have, we have the ability to deliver during these years, both long-term shareholder value by developing Clas Ohlson as a company for the future, but also to give short-term shareholder value.
We therefore also say here that the ambition is to, during the coming two years, keep the dividend in absolute terms, as in last year, which was SEK 6.25 per share. This summarizes the financial targets. I would like to emphasize that the growth target is organic growth, so any acquisition or similar that we would go about would come on top of this sales target, but naturally, such activity should support and be within the frame of the other targets. Going in then to a little bit what will happen next. Naturally, these targets will be followed up, and on a monthly basis, we will report sales growth, like-for-like sales online. On a quarterly basis, we will report sales per square meter, operating margin, and net debt to EBITDA.
Then on a yearly basis, naturally dividends, but also share of own brands. We're actually coming to the end of this afternoon. Before I hand over to Jonas to share a little bit of your view on retail in the Nordics today and to lead the Q&A for us, I would just like to quickly summarize from our point of view. As I said when kicking off here, we started this journey very consciously wanting to build a long-term platform for Clas Ohlson to grow from into the future. We asked ourselves, what would Clas Ohlson have done had he started this company today? We landed in that it is in this spirit that we want to move into the future.
I hope that you have seen evidence of today that we aim to gear the customer offer, our channels, whether it's store or online, to doing exactly this. We have 2 objectives that we will drive the business towards and develop the business towards, 3 building blocks that we believe will be critical. What you've not seen here today is that there are 23 strategic initiatives within these building blocks, a plan ready to go. Actually, some of them we have already, as Fredrik Urbom said, started. MatHem is one example of it, and there are others as well. There is a plan behind this ready to be executed within the financial goals and with clear resource requirements. For competitive reasons, we will not reveal the strategic initiative plan today. From a consumer perspective, we want to reinvent convenience.
Clas Ohlson has been known for being a convenient place to shop. We will reinvent that to also be true online. We will do that through building the Care of platform by increasing the relevance of the product and service offer, by taking store and online together to the next level to really create unique accessibility. It took us 8 months to get here, as I said in the beginning. I am so happy to present this strategy today and to be the leader of Clas Ohlson. The reason for that is that I think we have a great starting point, a foundation that few companies have. Few companies have the number of customers and the number of fans and the number of visits that we have. Few companies have the trust we have.
Few companies have the financial strength that we have. Few CEOs have the fantastic team that I have. Some you've met today, others have given this information to our organization today. There are another almost 5,000 fantastic people out in our stores. I'm so happy to have this team with me on this journey. What we have done during the last 8 months is trying to do the homework. That has been about getting to know our own business, what it really looks like when you look under the layers. It's been about understanding the context and how sustainable the context is. It's been maybe most important of all, getting to know the customer and what is really matters to the customer. We now have a strategy, but we also have a plan.
We have a financial plan to back that, and we have a competence plan to back that up. Actually, now there is only one thing that I and my 5,000 colleagues want to do. That is to move ahead with full speed. Thank you for listening. I will hand over to Jonas Arnberg now to lead further.
Thank you, Lotta Lyrå. Thank you for having me here. I know you're all keen on starting to ask questions, but I'm asked to give you just 10 minute. I'll try to do it in seven minutes. State of retail as we see it at HUI Research. Who are we? For you that doesn't know us, we are a consultancy working with retailers, online shopping malls, even municipalities and organizations. What you all have in common is questions about retail and how retail develops. It's been very interesting to hear the management speak of all the experiments you're doing and what you have ahead. I think we don't have to be worried about if people will shop.
We will keep on shopping. The question is, how will we do it? The only way forward, I would say is experimenting. There's not a good idea to sit on your hands for five years and sort of wait until you, okay, now someone else has shown us the perfect business model, and we can copy that one. It's better to experiment yourself. And some of the things that you presented today might not work, but some of them will absolutely do that, and you can adjust to the ones that are working. I think it's been very interesting, and I'm really looking forward to this Clas app. What do you call it? I always talk to... I never visit the doctor anymore.
I talk to my doctor in Kry, and why wouldn't I do that in my retail shopping patterns? Okay, now a brief story about how we look in retail now. If I only had 30 seconds, I would say, 1, retail growth take place online. Today might be a peak store. Growth will be online. That's number 1. Number 2, that's a consequence of number 1. That is it took a time for leaving the stores to internet. It's not taken that many years going from shopping at a .se place to a .com. In a rapid phase, we're getting competition from abroad.
Once upon a time, we shopped once a year, we shopped abroad on our yearly charter trip. Now we shop every day in apps from Alibaba, Amazon, Wish or whatever. Maybe a third point, I would just say it short and then leave it. Now we have a fantastic climate for consumption, an interest rate below zero, a booming economy. In a few years, we will have the opposite, a downturn in the economy and maybe an interest rate above zero. One-third of all retailers in Sweden does not make any profit. So if you can't do it today, how will you do it in a couple of years? I think a lot will change the closest years. First of all, growth takes place online.
If we go back to 2015. Sorry, all my figures are from HUI Research. who is Swedish-based, we produce a lot of figures and statistics, retail statistics. Also our analysis comes from those statistics. I would say it's pretty representative for the markets that Clas Ohlson works within. UK is a bit ahead of us when it comes to digitization, but some other countries are after Sweden. We're somewhere in the middle. If we look at 2015, 77% of all growth came from stores. Online channel had 23% of all growth. Then retailers with a base in stores could say that e-commerce has a pretty small share and a small share of the growth.
Two years later, 2017, 94% of all growth in retail last year came from online. Two years later, the reality is complete different. And we know a lot of retail chains that don't have the same market share online that they have in the stores. And you know all about retail and that it's about growth. Traditionally, it's been about growing with stores. Now you need to grow online. And the goals that you have in doubling, your online sales sounds fantastic. I would say do it every year instead of every second year. That's. It's easy for a consumer to say that.
I would say the consumer is ready for it, but of course, it's difficult to turn your business to that. What we see is when an industry reach about 15% of sales constitutes of e-commerce and the other part in stores, then we reach some inflection point. From that day, all growth will be online. B ookstores, electronics, they've already been there. Now we have fashions, who's there around 15%, we see all the fashion chains having problem in going online. If we exclude food, retail as a whole is also there. It could be today where we have peak store.
Peak store in amount of stores for 2008, but peak store in amount of turnover could be today. Yeah. In terms of structural change, e-commerce still has an ace to play in when it comes to food. In every change of retail during the years, food has been the driver of change. Now we all know, food is heavy, have low margins, driving it around is not a good idea if you want to make a profit.
We also know, I think all of us here will, in 10 years, we will look back on this day and ask ourselves, "How could I spend 3 hours during a Saturday going to the shopping mall, put things in the basket, in the car, going home when someone can do it for you?" And with a different scale, food will be profitable online. This, Fredrik talked about it, I think it's very important because food is the anchor in all... If you're a shopping center, you need to have food. That's what gives footfall. When families are there shopping, they also buy toys or whatever, visit Clas Ohlson. When only a few % of food migrates to online, that would be a big difference.
When bookstores left, the retail centers and we got the coffee shop instead, everybody just thought it was okay. Then we had home electronics that left, and we got Playland or Andy's Lekland or something like that instead. Everybody was happy again. Now we see how you need to try to shift the clothing, the fashion retailers, and shopping centers try to put in more restaurants and doctors and all things that could drive traffic. Here I think Clas Ohlson, with their fantastic stores, have a good position in being the new anchor for shopping centers. So when you, when you negotiate with your with the rents, you should argue for having zero rent because you're a very...
If I were another retailer , Clas Ohlson is a nice neighbor to have. All retailers would like to have Systembolaget, the state monopoly for alcohol, that's the best driver. Clas Ohlson is also a fantastic driver to the shopping center. I guess you can use that. Lastly, about e-commerce growth, we could do forecasts in how technology will develop, logistics, Amazon's voice, what will happen. It's very difficult. What will happen when... Today, the iPhone is 11 years old. What will happen when it's 20 years old? What we know, what we can do is forecast of demographics. What we see is people under 40 years old shop more online than people above 40. We all know where we're heading.
In e-commerce perspective, that's fantastic. Every day, a digital native becomes older, get a job, and keep on shopping online, that will be a shift upwards for online channels. E-commerce will keep on growing rapidly. That's the first part. The second part I was talking about is the international competition. We now in Sweden, about SEK 15 billion, Swedes shops from abroad. It's growing rapidly. If we look at like Wish, for example, new rules from PostNord could put an administrational fee on this, changing it. But until March, if we look on the 3 biggest e-commerce online players in Sweden, we had Adlibris number 1, Apotea number 2, and Wish number 3. They didn't exist in the statistics for 1 year ago.
We look at Amazon, they're coming here, fantastic company. Last year they put SEK 200 billion in research and development. Swedish states put in SEK 10 billion. Amazon is 20 times bigger than what Swedish government put into R&D in total. If we look at Zalando, they have 12,000 people in Berlin, 2,000 of them only working with a digital platform. I don't think the whole Nordics have 2,000 people working with platform. We're meeting huge competition. I'm not saying this to sort of scare you. I wouldn't say these companies are the big threat to Swedish companies. The threat is you have to be digitalized. You need to have a digital strategy, then you're okay. If you're not having that, then you're in problem.
If I conclude this, we can conclude that retail is undergoing a digital transformation and digitization grows rapidly. Inflection point is today. From this day, all growth in retail excluding food is online. I will also say it's now when management like this and around are starting to act on the trends that we've been seeing for, in a few years, and that's when it all starts to happen for real. When CEOs, business development managers, people in the companies, when they start to act, then it's all happen. Example is a lot of retailers sit in five-year contracts maybe for their store. When those contracts now go out for, it's time to negotiate for another five years, then I think a lot will happen.
If you look on the retail today compared to 5 years ago, it's a complete new situation. Even more, if you look today and 5 years ahead, no one knows how it will look like. I meet a lot of retailers that say, "We will look over our stores in the time, when every time a leasing contract finish, we'll sort of decide if we'll go on or not." A lot of them say is, "We, we see that we will cut 50% of our stores." We also see that the growing e-commerce, as I said, leads to new competition from global players like Amazon or Zalando. That's, that's what I had to say.
If I can start with one question, you can answer it or follow it. I know you all have a lot of questions about more financial details. I start with one that's more from what I've just been talking about. So inflection point where growth comes from online is something that every retailer needs to address. How do you look in that? How will you grow online from the 3.5% that you have today? Also, as a consequence of that, how will you sort of adjust that in the store perspective? The omni-channel strategy sort of.
I think, referring to one of the pictures you've seen today with the 3 generations that we see in the e-com model, our approach is to act on all of those 3 generations, meaning that we have a quite clear, concrete plan in place for drastically increasing e-com sales already this autumn. Jacob Sten presented that previously. At the same time, we are seeking new routes to the market. In parallel with that, we are building the long-term solution by getting into people's homes and developing the Care of platform. This strategy is very much built on full sense of urgency, but at the same time, making sure to act on different time horizons and building for something that we believe is more scalable than solely what we see right now.
That's to answer a little bit your first question. The second question, how will this impact the stores? Naturally, there will be an impact. I think what's really important now is to secure the flexibility. The option in our case, and I would like to repeat that because I think it's a super important fact, every single store that we have, we have gone through. All the stores we have in the Nordics contribute to our result. That means that if I would go out now and close 25 stores just for the sake of it, because people are talking about I would take out money out of my P&L. I don't think that's the right thing to do. The right thing to do now is to secure flexibility.
What we do is we benefit from the structure that we have with 50 stores out of 220 being up for renegotiation during the coming 2 years. That's one thing. Secondly, every single new contract that we go into, we secure shorter contract times, shorter break option times, everything to secure high flexibility. I think that's a little bit the way to act now. Safeguard the revenue you have, and at the same time, make sure that you are flexible to adapt to when the inflection points really hits. I think that is in essence, what we have developed the strategy on.
Anyone wants to follow that? Yes. Sorry. You were first. Sorry.
Thank you. Well, thanks for outlining all these efforts that you've done over the past month. It would be great to reconcile the financial guidance, please. If we look at the ordinary retail business, you propose that you will turn over slightly more than SEK 10 billion in five years. You just said that you don't foresee store closures, but just to like make an example, the new normal Clas Ohlson store will be in the range 1,000 square meters. You're at 1,300 today, approximately. That means, taking out 25% of your space over the coming five years, that will contribute negatively to top line of 5% per annum or SEK 2 billion worth of revenue, given today's sales per square meter.
You've also been kind enough to outline your expectations online, which is to double every second year. That would add back another SEK 1.2 billion, perhaps, in sales. That still leaves a deficit of, I don't know, SEK 700-800 million. On top of that, you're saying that we should expect organic sales to grow by 5%. How do we get from that sort of decline on the top line to that growth? You've said what the items are, sales per square meter, et cetera, et cetera. It would be very useful for you to give us some numbers on those drivers, please.
The guidance that we have given is that we want to grow 5% per year, and we have indicated how we aim that that will happen. Part of it is that we will grow sales per customer, right? That is one consequence that we see independent of channel. The second is sales per square meter. I think it's important. It's two factors contributing to that number. One is, of course, that square meters could go down, but we have also highlighted throughout the presentation that we have a quite long tail.
Products that are underperforming. One of the main activities that we have for the coming year is to actually go through our range and make sure that we get the performance of that tail up. That is another important parameter to have in this as well. On top of all of this, you also have the service part, which is a new addition also from a revenue perspective.
Yeah. The second question. Niklas Ekman here from Carnegie. I'm curious, when you talk about this SEK 105 billion market, I'm curious, when you're now talking about 20,000 SKUs in your physical stores maybe being a bit too much and you're looking at a reboot, how will that assortment change for you to actually be addressing this SEK 105 billion market? I'm also curious, what SEK 105 billion, what does that go from? What is your addressable market today? What number? Are you looking at Is SEK 105, is that twice or three times the market that you're addressing today?
W e have addressed the market in a completely different way historically, more from a product perspective, so it's not really comparable. So we think, t hat's the reason we decided to start from the consumer wallet, because we believe that that's the sort of relevant starting point for defining also the offer, so to say. So, I don't think there is sort of a relevance in going back. This is sort of the new platform. Then your second question was, sorry?
Just trying to understand how you will address, or how the size.
The size of this market today.
Sorry, yeah. I think if you remember one of the pictures Fredrik Urbom showed with the different store formats, and then you have online being a channel in itself, I'm not so sure that we, if you look at the assortment in totality, will have fewer than 20,000 SKUs. The I'm sure they will not be the same, but it might be that we online have an even broader assortment. For example, if I take a complete example, take the organizing example that Jacob Sten showed. In order to be all in in that business, I would do not rule out that we would, for example, have shelf systems in order to provide the full, but you won't find that in Hornstull. I think it's.
That's why I also mentioned the SCORE context, which gives us a possibility to adapt the assortment in a completely different way. I think the assortment size per se is one thing, but then how you use it in the different channels, there we will be a lot more flexible and tailor the assortment in a, in a much more specialized way, you can say.
Another question just on online and how you will be growing this, how you will be doubling this every second year. I think one of the challenges with online sales is your typical category of product, it has a fairly low-ticket item, often, high transportation costs, and you see a lot of competition where if you do price checks today, Clas Ohlson rarely comes out on top. How will you grow that share that dramatically in a very price-competitive market? Are you willing to take that price fight, or is it through convenience and the delivery options? Is that how you will win that battle?
I would like to answer the question from two perspectives, if that's okay. If we start with the margin question, I think it's pretty obvious in this presentation, or at least I hope it is, that we see two forces in play. One force is that we have a job to do when it comes to our own cost structure and our own ways of working and how we work with the cost of goods sold and so on. I think that is actually the reality of any retailer today, that you needs harder work, basically. That will of course help us in maintaining margin. Then of course, as you say, there will be another force in play as well, which is that competition is more intense.
What we have done in this plan is to put together something that we believe actually will help us navigate this by also driving an efficiency agenda. That's one part of it. The second part of it, which I hear you talk about, more consumables, low-ticket items, and all of that, there I think new routes to the market is extremely important, and that's the whole logic behind the MatHem cooperation. If you look at the 600 articles, you don't, probably don't have the list, but if you look at that list, you will see that that's typically the type of articles that you would have in that.
As I said in an earlier session, the key when it comes to last mile deliveries is that you need to have a high basket value, meaning that when people decide to buy Clas Ohlson batteries, copy paper, gloves or whatever it is, it actually goes into a food basket that is already on its way to the customer. I like the term samåkning. I think it was Market.se that had that article, 'cause I think that's the key. It's samåkning that will create both convenience but also economics in those businesses.
We will utilize, of course, Clas Fixare as well for the same reason, right?
Exactly.
When Clas Fixare is in home, he or she can do the same thing, like we do in MatHem. Same samåkning or.
Yeah. We didn't talk about that, but there was actually a car in the Clas Fixare picture. You can just use your imagination to see what that car could be used for.
Marketing.
Yeah.
Magnus Råman, Handelsbanken. maybe tying into these questions. You speak about you having a lesson to do when it comes to being more lean on cost. When it comes to sourcing, you mentioned more than 900 sources from 30 countries. Can you give us an idea of what you aim to, how you aim to come down there? How many suppliers would you ideally want to come down to, and how could that affect gross margin?
I think consolidation is maybe one part of the job, but another part, even though we are in 30 sourcing markets today, there are some markets where we are not. I can just compare to my previous experience and say that I think a broader, even broader sourcing market will give more options. I think that's another important tool that we need to use. Then I can just also conclude that we are not as systematic as we could be when it comes to actually addressing purchase prices from all dimensions. That is, it's not only the supplier structure, it's also specifications and a lot of other things that need to be addressed. It's not sort of number of suppliers per se.
I think it's a lot of different dimensions that will help this.
You're not aiming to become a larger client with fewer suppliers, but rather being more aggressive in your negotiations?
I think it's not either/or. I think it's both/and, because also if you look at our products that we have, they're quite different. Some are for known brands and so on. We have another agenda which is more the private labels that way. It's different tools in different segments, I would say.
On the interesting discussion about ticket size and delivery cost, and then the MatHem tie-up, is that an exclusive cooperation for you? Because , MatHem has a very, very tiny share of the food market in Sweden. As alluded to here, the major players will, of course, come online in the coming years. Will you be able to cooperate with any other companies or are you stuck with MatHem as an exclusive to you?
I don't see it that way, actually, that we are stuck with them. I would say that we will, for example, enter into a cooperation with Budbee now in Sweden. You could say in one way, is that a competitor to MatHem in distance? Yeah, maybe, but it's also complement. T here is also, a contract structure behind that cooperation that is not endless and so on. I think a little bit to Jonas' point, we are in times where we're also sitting and waiting and believing that the perfect solution will be presented in a conference. I don't think it's time for that. I think it's about being daring to do new things, trying, evaluating, and then learning.
I see MatHem also in that context.
Of course. The final one from me before I leave over to other questions. A key cost in the online is of course the delivery and how do you view this? I f you look at the cooperation, for example, with MatHem and delivery from this truck that you pointed out, who will carry the cost? You said also you're gonna come down to next day delivery. Is it gonna be the end consumer or is it gonna be Clas Ohlson? Will next day delivery be free for the end consumer?
I think first of all, the starting point for that question must be the total commercial investments that we make. We already today invest a substantial part of gross margin in promotion and other things. I would not rule out, and Jacob Sten, you brought it up as well, to use last mile logistics as a commercial tool in that context. Of course it cannot be on top of everything else. I think in the total offer to the customer, it's a commercial tool to use. As we also said, we believe that as a starting point, there is sort of a polarized demand in this.
There are some people who are not willing to pay but are willing to come to the store, and there are others who are willing to pay for having it delivered their way. I think that's the base. I think it is a commercial tool to use also in the total commercial toolbox.
Okay. One follow-up question, or actually two quick ones. You will charge the P&L with anywhere between SEK 85 million and SEK 170 million per annum or 1 to 2 percentage points of EBIT margins. Do you already now know if that will be front-loaded or back-end loaded over the coming 2 years?
I will stick to what we have said, that it's 1%-2% of underlying EBIT margin during the coming two years. I hope that it's been clear that we're all a quite impatient team, so we don't intend to wait. We're doing things that will benefit Clas Ohlson long term. It's these two years that we see as transformation years.
Final question, it would be really interesting if you could provide us with some CapEx guidance as well, because I think this relates to OpEx, right?
Yeah. Do you want to comment on that, Göran Melin The CapEx question?
I'm thinking about automated, e-commerce distribution, et cetera, et cetera. Thank you.
Well, not, we're not gonna guide in specifics. We can at least say the CapEx situation we've had the last, as I showed, the last three years will continue on that level. We will also invest other above that in the Care of platform, if that is a bit helpful.
Yeah. I just wonder why would you initiate a net debt to EBITDA target of two times? S urely there's some thinking behind that. You're running with net cash.
That is the combination of actually doing the transformation, but still having the ambition to keep dividends at the same level in absolute terms during the coming 2 years. We also want to signal that although we see a transformation and exciting time ahead, we will do that still being very, you can say, careful from a financial perspective. It's a combination of those two. That's the reason we mention it.
Thank you, Andreas Lambert with ABG. Clas Ohlson has always been a firm where consumers go to buy products to fix themselves. How you think that fit with your now focusing a lot on services at home? To what extent does your customers want help with home fixing according to your own research?
Well, first of all, what we have seen over the years is that they come to buy products to fix themselves, one of the most prominent sort of things that first people say is also that how much they have appreciated the help that they get from our staff. You can say that although we have been a product sold products to people who wanted to do it themselves. We have also helped a lot of people along the way. The research we have done, which has been pointed out during the afternoon, has been both actually in people's homes, it's also been through focus group and other places. We have quite strong evidence, I would say, that there is demand for this.
The fact that we have for such a long time, operated, in this space gives us credible. We have also tested who would be a credible supplier for services like this. It's based on that we are now launching this new service.
You talked about your feeder stores here a lot. How will delivery takes place from a feeder store? How are you thinking about using your own employees as delivery guys?
The feeder store, will get their supplies from the distribution center in Insjön.
How will you deliver from your feeder stores to the end customer?
That can be in different ways. It can be through click and collect. As we said, we believe that that will be one important option. We have talked today about MatHem, we've talked about Budbee, and there can be other options as well. That's the thinking, to have a multi option once you sort of, get to the store.
Have you been thinking of using your own store employees as delivery people?
Maybe that has not been the top of mind. Apart from Clas Fixare, of course, where that is a built-in thought.
You talked about all stores are contributing to your P&L. How do you think about closing stores to improve your returns on capital? Thank you.
Yeah. Then I will come back to what I said before, that of course, that is a balance between what the store contributes with and the costs associated with actually breaking a contract. Our conclusion of the analysis that has been made is that we actually see that we want to use the flexibility that we have in the existing portfolio to handle those issues rather than taking costs associated with breaking contracts.
Hi. Stellan Hallström with Nordea. I have a question also on the, whatever that SEK 100 million to almost SEK 200 million that you intend to spend on this, on building this new thing, new infrastructure here. How much of that is there, room for price initiatives in this as well?
You can say like this, that a lot of the smartness and simplicity initiatives aim at funding a sort of having the right commercial muscles. Before those initiatives are fully impacting the P&L, there could be such an effect included in that.
Okay. A question also on how you then, if you see this higher cost, how you will sort of improve margins again after this planning has been done? Is it that these costs will come down, or is it that you expect sales to give leverage?
I think it's a, it's a combination, but, first and foremost, I think it's the, better cost structure and a better costs level that will, help the margin development.
Sorry. On your online growth then, it seems that you're obviously targeting much higher growth in online. If you can just explain a little bit, you, maybe you've don some of that today, but even how you. It, seems like quite a dramatic improvement that you're targeting here. W hat are you identify that has led your sales not to increase at this pace before that is changing now?
I will come back again to that, the store network have provided an enormous convenience for Clas Ohlson customers. What our analysis shows is that we have not provided convenience at the same level online. That has a lot to do with the fulfillment part. Also, maybe you would like to repeat some of the quick things we are doing now also in the interface to the customer, which is another important explanation.
There is a couple of, let's say, basic areas like one-click payment, it's delivery time, and those things is of course things that is already in place in the market today. Now we are accelerating those initiatives, and that will of course also have an impact in terms of our sales, and will have an impact in terms of the convenience that the customer expect in this marketplace.
That includes well, click and collect options as well.
Thank you.
Niklas Ekman here again from Carnegie. A couple of follow-ups. Firstly, I'm curious, this net debt target, it gives you a very much flexibility because you have net cash today of almost SEK 600 million. Going from net cash to net debt of 2x EBITA, even with a cautious EBITA target, it's a swing factor of almost SEK 2 billion. That's certainly not the level of investments you're looking at. Are you leaving a lot of flexibility here for instance, for acquisitions?
That could be one option.
What type of acquisitions are you then looking at?
We have been quite clear today that our territory is the home, and we have a number of consumer missions that we want to excel in. It could be, basically, yeah, many different things that tie into those consumer missions.
Other existing online retail businesses, or are you looking at brands or?
Yeah. I think those are the type of questions where it's , we have been quite clear on what our arena is, what we want to achieve, what we want customers to perceive with Clas Ohlson. If there are online players, brands, other companies that could support us delivering that, of course, that is an interesting thing to look at.
Okay. I was also curious about Clas Fixare. Can you give an example of what a service would cost that would make this very attractive from a consumer perspective but still viable from you in terms of P&L? What would the cost be of someone who comes up and installs your TV set or whatever?
We have not defined. W e are running the pilot in the autumn, so we have not defined the real price point. Of course, we will have the target we have is to package it in a good way, make it accessible, and then of course have a competitive price. That comes without giving. We have not set, like, the detailed price, but we will do that in due time in the autumn.
You can also say we wouldn't bring it into a financial plan if it didn't add value.
Yep. That makes sense. I was also curious. You mention how you have 50 stores that are up for renegotiations, and at the same time, you say that all stores are adding value today. I'm trying to determine here whether you are guiding for store closures or store openings or if you are pretty content with the number of stores you have today but maybe though the format will be different. What do you see in, say, the next five years? Will there be more or just lower, maybe same amount of stores but fewer square meters?
I can shortly comment on that question. As we look at the trend, I think you're right on it that we like to optimize the store network in terms of making sure that we have the right store in the right location with the right assortment. You could see that earlier on that we have today one size fits all regarding size of the stores, assortment, et cetera, if we are south of Sweden or north of Norway. That will be a top priority to do that, to be more, more convenient and more customer-focused in the store approach, and that will drive sales itself, we believe.
Of course, then the trend we see will be not adding perhaps huge amount of Clas Ohlson normal stores because we have quite a lot of them, as you know. It's more like adding new formats, and we're looking at smaller formats than that will be the priority.
Are you also looking at closing some of the larger stores?
Well, we look into each store what we'll do to that. It could, as I said before, it could be relocation of a store that we see that this trading area at the moment is not actually the right one. That will be closed, and we move to another trading area.
If I take a concrete example to bring you into the discussions that we can have, we had a Finnish example quite recently with a store which is maybe not in the right place for the future. The team had done quite extensive research to try to find the optimal location, but it hadn't turned up. What we did then was that we went back and say, "Okay, can we stay 1 year?" In the meantime, we tried to find that perfect compass store location. That is how we are working. I think, I think it's. This is. It's not, it's not really. The big pencil is not so useful here. One has to work on a case-by-case basis, flexibility, minimize some cost, and try to find these locations where people are.
That is how we are working.
A final question from my end. When you talk about SCORE now, being in its final stage, what benefits do you expect this to give? Y ou mentioned some of the examples here about, What your benefits. In terms of P&L, given that you have invested half a billion in do you expect significant efficiency improvements from SCORE when it's up and running?
We do. I think especially as Fredrik Urbom mentioned also, the ability to tailor the assortment per store to actually have a much more, relevant, assortment. Then I think it's important to say that one of the reasons, I was not around then, but what I've been educated sort of around is that, the system landscape that Clas Ohlson operate with today is not scalable. It's not possible to run the business the way we want to run it. I think there is a component of that, but there is definitely also very concrete business benefits.
Okay. Thanks.
Magnus Råman, Handelsbanken. Just to follow up on the Clas Fixare initiative, this co-op, company that you set up with Pegital, what is your ownership share?
We don't disclose the exact number, but we are a substantial owner in that company. I think it's important to emphasize that the concept, the brand, and all of that, we own independently of that company. That company is in place to operate the business.
In terms of your 5% organic growth target, you mentioned here that that excludes acquisitions. How should we view the acquisition of a share of ownership in MatHem and now in this co-op with Pegital in light of that? Will all that revenue derived from these two partnerships go into the 5% organic growth target?
Looking at those two examples, they are included in the organic growth. W e are adding service as service, and that is included. On the other hand, if we were to acquire someone with a high turnover and buy 100% of that company, that is not included in the 5% that we have as a target.
Right. That's clear and interesting. Perhaps also on profitability, you have now 3.5% pure e-commerce sales. Can you give us any sense of the gross margin profile you see on that revenue as compared to the group margins?
I will not go into the details in the split of the P&L. As a comment on how the market looks like, the competition normally is harder on the e-com side, and therefore normally also the gross margin is lower in e-commerce compared to our sales in stores.
Long term for you to maintain the same margins, operating margins that you target, as you have today, that would imply that you would need to have lower operating costs, I assume.
That's the reason for the smartness and simplicity building block and emphasizing that part. It's also a reason for strengthening the share of own brands and the investments we will make into product development to strengthen our own brands as well.
Just a final one on the feeder stores. How many stores do you plan to designate to feeder stores?
I think that will actually be a moving target. It will be on a need basis, you can say, depending on the flows that we have. The starting point is still that by automating e-com in Insjön, we will be able to manage part of the flow also there, where maybe customers don't have the same urgency. It will be a balance between those two. The advantage that we see with the feeder store setup is that it is quickly scalable. That's the advantage with having that type of solution.
Thank you.
One more question. maybe I'm just missing it, but you haven't mentioned the word mobile during this afternoon at all, I think. Is that included in everything else when we discuss online, or, would you care to update us a little bit on the mobile shopping possibility?
For us, it's per default mobile. I don't think we even talk about the other, so to say. That's one of the reasons why we're also now investing in updating the search engine mobile. The site is already responsive, but the search engine is not working so as optimal as we would wish, and that's why we're doing that update. T he word is mobile. It's as simple as that.
That direction.
Yeah
... super clear where it's going, so that's definitely possible.
Yeah.
Yes, also a question on follow-up maybe on the growth on number of stores. I t seems that you are indicating that you aim to grow the number of stores with the smaller formats that you're looking at, the outlets, et cetera. And I take that would be also part of your 5% growth target.
Yes. If that is the case, absolutely.
More questions? I have one about, one way to be Amazon resilient is to have your own brands, private labels. How you look on the mix between private labels and external brands?
Today we have 35% and our ambition is to grow that quite significantly to be able to support the offers that we're going to do, but also in terms of profitability. We don't disclose exactly the amount, the percentage we're going to have on the total, but we can say it will significant growth from the 35. That's twofold. I t's also with the offers, new offers that we're doing now going forward, it suits very well as well with our own brands. We could really make the offers even more appealing in terms of that perspective.
Just tying into that question, could you perhaps help us with an idea of the difference in gross margin on the private label sales?
We don't go to those details, not between the two.
I thought you might be more outspoken.
Nice try, Magnus.
Nice try.
No more questions. I've had mine answered, so if there's no more questions, then I guess we're finished.
Thank you so much, Jonas.
Thank you very much.
Thank you all for coming today.
Thank you.