Going Digital, Going Global: Elina Björklund, CEO, Reima

Good afternoon, good morning, is it still morning for all of you? I'm a woman in tech without an engineering background, so it's an honor to be here. And why this happened in the world is that my brother was the one who repaired the bikes and who was the handyman in the family, so I chose Business School. I am an economist, so I chose economics as my major and minor, and then mathematics and finance actually. So I did something that I wanted to do, but in the way that typically happens 30-35 years ago, I took the Business School as an easy one. I'm honored to be here to tell the story about Reima digitalization. We've done a lot during the past five or six years. But before I go to Reima, I was asked to tell my own story, how I am here as the CEO of the company. Looking back, it seems that I have planned these six to seven year cycles. That is not the case, but somehow as I started to think, it has gone with six to seven years. So the first one was about university, as I told you all, the University of Helsinki School of Economics. I also studied one year of finance in London, decided that I don't want to have anything to do with equities. Otherwise I like the MBA finance course. I came to Finland and I found myself as an equity analyst in Council. It was like a punch. And then at the age of 28, I found myself as a chief equity analyst of Marita, today Nordea. Too early, too young, but with a very experienced team. That was my school for leadership. Then it was time to take another phase of leadership, which was being at home with the kids. We have three kids, so I spent about six years at home, not only being a mom but also studying in the IDBM Pro program, International Design Business Management. I also consulted during those years and by earning money through that, I bought some help at home. And then after that, I moved to Iittala. Many of you probably know the brand. Spent there six or seven years, ended up being responsible for the Iittala brand globally and the direct consumer sales. I opened the first web store in Iittala at that time, 2007. And then it was time to move on the Reima path. And it happened actually accidentally in China. Our family decided to move to China in 2010. Actually we decided to do something together with my husband. We've been both working on different career paths, so decided that let's do something together that we deserved, and we founded a company in China, a consultancy. My husband had a bit more experience in China than I had back then. I had also worked in China with Iittala a lot. But we decided just that let's do something cool together. So we founded a company. He was the managing director and I was the head consultant of the company. We were sitting there in Shanghai in the middle of French Concession, we rented office space and then sitting next to each other and thinking that okay, where shall we start? And that was my school for that anything is possible, it's about attitude. So Reima was my customer number two. My customer number one was Marie me, and then Reima was customer number two. And as my husband puts it, he forgot to put the claws into the employment agreement that consultants cannot be recruited by the customers. So this is how I ended up in Reima CEO position. I opened the market there for Reima and then moved to Finland a bit before the family, the rest of the family then came after that. So I was in China for two and a half years, I knew something about Reima back at that time. And now I've been CEO of Reima for five years, enjoying this fantastic small Finnish company with a very good quality product. But let me run through this story about Reima's digitalization. I have to tell you a bit about what we've done with the brand during that time also to understand that you cannot capsulate only the digital part of Reima, but you need to understand what has happened. It's going to be a lot of slides. This story is about 30 minutes. I was honored to be chosen as the digital leader of the year in Finland 2017. So I've told this story, it's about 30 minutes. Now I have 24 minutes and 50 seconds, but I know there are mostly women in the audience, so I can shoot okay.

Why do I exist? More relevant today than it has been ever. But this has been what Reima has been doing for 73 years. Today's kids are less and less active. You might recognize this not in your families, but you've heard about your friend's kids. And the other thing is this: you know, as parents, loving mommies and daddies who do everything for the kids so that they don't have to take the ten last meters to their basketball training. So this is what is happening. And actually it's a universal phenomenon, and it's actually pretty scary how little our kids move. I did research about ten years ago, maybe seven years ago, where they found out that if we don't change this phenomenon of passive kids, today's ten-year-olds will die younger than we do. So it's a true real problem that we have everywhere. And it might be that you even think that your kids are active, and then when you start to calculate how much they are, the net time of being active can be surprisingly low. For example, if your son would go to football training four times a week, you take him by car to the football stadium, and then waiting for instructions, waiting for your turn, it might turn out that actually of that one hour football training, only 20-25 minutes is active, and it's pretty monotone. It's not as we used to have when we were kids. We came from school, went out, and came for dinner, and then went out again. Movement was more natural. In today's urban environments, it's not so natural anymore. This is the background. We've brought the first activity sensor for kids. I will come back to this later. To the world to enhance kids' activity. It's not for measuring, it's actually to make moving fun for kids. And then also for us adults to see what actually happens after school. So we believe in Reima that kids are made to move. Reima inspires kids to grow up with the joy of movement that will eventually change their lives and ours. That's what Reima is all about. So we believe that if we can create active kids in this world, they turn into happy, balanced adults. So actually every day we come to work, we put a kid in the middle and start to think how can we make these kids move so that they don't even feel that they have the clothing on, no matter what the weather. Today we are leading specialists in this small niche, actually globally. Seven million kids get annually a new Reima product. Then we all as mothers know that there is the second-hand market also ongoing. More than 80% of the sales come from international. I think Finland is 18%. This year we've been able to double our Reima brand net sales during 2012-2017. And about 15% already come from own e-commerce channels, which in comparison to many other product companies is a huge amount already. Last year was 85 million euros. This year we'll be 110 million. And the idea or the secret behind everything is this: that we have the best product in the world. And that's something that we really need to do. Still we talk about branding and digitalization, we have to fulfill the customer promise so that kids when they are moving and they are out, they don't feel the weather, be it snow or summertime. They have UV protection. Here's our net sales during the past couple of years. So I'll go through Reima's journey, part of which is digital. But what we did with the brand before we actually started to push digitalization through the whole company 2012-2016 is we baptized this as Reima's journeys. The first strategic leg, and then now we are on our way on Reimagine 2020, the new strategy that we built with the whole personnel. 2011 as I first met Reima, it was a company with 56 million euros of sales. Wholesale was more than 90%. Finland was more than 50%. Reima had two old stores mainly for the end-of-line that you have to get rid of. No e-commerce. There were four brands. But it was an extremely good quality product and very well operating supply chain. So company extremely well taken care of, but underinvested in marketing. I always laugh that when I joined the company there were two people in our marketing department and they were reporting to the chief operating officer because he's an engineer. Because marketing was a cost item that had to be controlled. But the company was taken care of very well and the product was good. So it's been a nice journey to work with this paper. We did 2012 with a management team and this is an authentic list from 2012. We went out to the forest for three days and thought about what do we do with these assets that we have in our hands and what do we believe that the world is going into and what we need to do. And these are the four points that we've been now following since 2012 with the personnel. This kind of a picture that you put on the refrigerator if you want to run a marathon or you want to lose some weight, you put a picture and then you start to look at how the mirror tells the same story. We said that we want to be a branded house instead of a house of brands. So the Reima brand story about active kids and Reima brand philosophy drives us all. We said we want to have globally appealing brand and product. It's not enough that Finnish mothers accept Reima or Russian and Finnish which were the big markets back then. It was obvious that we need a branded retail concept to take international brands. You have to be able to tell the whole brand story and show the whole collection. And we said we want to have a conceptual wardrobe for active children between 0 to 12 years. This is actually the whole business idea that we still have. And then we set the fifth point which was an important one. We said that online is our home base. So the whole management, all of them had been leading a product company, we were willing to say that online is our home base. We probably didn't understand quite what we said, but we knew this would go digital and decided to say that to the organization and then started to work and invest behind that. Someone told me this autumn, she used to be my assistant back then, and she said that everyone thought that when we came from this forest trip with this list and told it to the personnel, they were choking. Let's see what happens. Online is our home base. This is about kids clothing this company. But there we go. So brand vision was the first thing extremely important that everyone understands it the same way. In today's world with this change that we have ongoing, the transparency, everyone needs to have the same vision where we are going. You cannot control everything in a company. This is authentic vision and slide that we made 2012. A bit old-fashioned already the picture, but I still keep it because people are used to it, so they recognize it. We want to be the most preferred and the most profitable kids premium functional wear brand club. High targets we said to each other. We took Reima brand in focus. This is a brand portfolio that we had back then. It was obvious that if you take a brand international, you cannot afford more than one brand. This is the most important revamping the design. This is how we looked. It's okay, my kids are soon adults and very good persons, they have grown up with this Reima. But what we did is here, this is from 2014. It looks even better today. But you see that thing there is that mothers also in New York and Hamburg and Paris have to accept our design. We provide everything tip to toe year around and we grow with your child. We've been doing this for 73 years now, so we know exactly what is needed. When you need some room here for diapers for example, or then it's warmed when a kid is sitting on the ground. And then we grow with the kids and try to take away one of the various we as parents have, which is how do you have to dress your children. This is how our collection looks today at store. I took it in Iso Omena, our newest store in Finland with a new retail concept. So you also need to go into direction that it looks good but it is functional. Very important decision was about the positioning of the brand. It is clear that we were here about mud and rain. Market was under pressure. When moms go and buy their Altia money in Citymarket, you usually buy one of these overalls. So obviously your price perception at that moment is that whether the overall is 109 or 129, it makes a huge difference when you buy it with Altia money. But then when we go to market that is growing, we have dads with suddenly wallets are totally different opened. It is the active lifestyle. We want your kids to be the best on the slalom slope. We provide equipment. We provide happy children. So blue skies also in China. Blue skies when your kids wear Reima, they turn happy and balanced and active and get good education and get well married and so forth. So the story goes. And then we brought in the street collection which is good enough for most of the locations. You don't need the ability the same as Mercedes have on its panties that we used to have for the products which is about the quality of the product. So this is maybe with the design revamp one of the most important things and everyone in the company needs to know this. We did not throw away our heritage of being against mud and rain. But believe me or not, if I go to Paris and try to sell for women an overall against mud, it does not sell. Okay, we invented Reima retail concept. This is from China one of the stores. This is from Moscow. And this is now in Iso Omena, another new concept that we opened about six weeks ago. Go and see. There's a big big screen with moving videos all the time and digital place also inside the store. To be able to run stores you need to have a stronger spring and summer collection. So here you see some part of the spring collection and summer. Again the idea is the same: to liberate kids to move no matter what the weather, so that they don't even feel the clothing. And then it's also about protection. UV protection for example is very important also in Europe more and more. So one more our outdoors makes a difference. Then we go to the mindset and why of digitalizing the company. Important to tell the people that why we are digitalizing is to be more relevant and to sell more overalls. So that people understand that we're digitalizing to be able to continue our path. We were not under any pressure. I can see that in many industries this is happening since they are under pressure, the threat is coming from digital. But that was not the case back in 2012 and I would still say that it's not a true threat yet in that sense like in media it has been for a while. But important to say to people that you are part of this and this is for all of us. That we will sell more clothing by digitalizing. And then of course efficiency and empowering people using all kinds of digital tools so that we can have open communication inside of the company. Digital vision was 2013. I actually remember it was Christmas holidays and I started to think that maybe I should know a bit more about what I'm leading. But we are saying that online is our home base. Turned out pretty quickly that it's not only about the web store, it's about the total value in the backend of the business as well. So we created a digital strategy during 2014. I started by meeting people who really know about this, having a cup of coffee here and there and lunch. And then I created a roundtable having our leadership team. Most of us back then were so-called old school old dogs. Then I took some of the native digital natives, young people from the company around that table. And then people from our board of directors. And it was a bit chaotic. We started to discuss. We talked to outside experts to tell about the digital and then discuss what would this mean to Reima. And by this we as old dogs learned from the new dogs who were born with the smartphone in their hand. And the board people also kind of learned about what we were about to do. And this is authentic slides. I will run through very quickly a couple of them from the strategy that we actually still revert back to many times and we really use them. Documenting it so that we know that because change is so fast that you have to know the story where you are aiming at. We said both a digitally successful company in 2017 should look like. These are consultant words, they are not mine. If we talked about agile organization, full ecosystem of partners, digital operational excellence in every area, blah blah. But anyhow, if I look back at them now, they make sense. And we started to think that what do these mean for a company like Reima with products. And here at the very end you have the key success metric is to extend digital into mass personalized bundled services. I don't know whether we really knew what we wrote there, but we wrote it there and now it has turned into. When you write something down it starts to happen and you say it a lot. We bought a company called Finnish Baby Box last Christmas and it's part of the journey that we are now with the mass personalized bundled services. I will come back to that. We set the target high by saying that we want to be a leader in customer experience design in digital. We benchmarked the market back then and found out that we were somewhere here: a digital brander and demand generator, not the product innovator nor a customer experience designer. So target positioning was set very high. This is the first draft of our Reima Go from 2014. It was called Clay tracker back then. The concept started from the idea that how could we enable kids to move more and be out more. What would be the way to help parents with that? Concepting through that everyday life, what would help parents and through that help kids to move more. Soon turned to our partner here and now the rest is history. Now we are out with the product. We took mobile in the center of our digital development. It was not very obvious back then. And then we set the online vision which I saw here and I've shown other places as well. We quite didn't make it with it but 2017, 20% of net sales come through own online channels. I told you that 15% we got into. But most of the other ones get to five or four or three percent. So my philosophy is to aim high and then you will make 60-70% of that. But you would never have made it without targets that are ambitious. Of course they need to be reachable, but this was something that we were guessing to the future. Otherwise it's fully relevant still. Down language we already said back then that content is the key. And when we provide help to parents, the purchases will follow. Then we got to the real job which was about processes, tools, reality bite so to say. I say that it was not about e-commerce and telling parents in digital channels how to take care of your kids or enable them to be active. It was about ERP process that we got. Product information management system had to be removed. ERP had to be renewed. All kinds of backend work. And then it was not only about the ERP, it was also about us big people. Here I have a horrible picture of myself. Other persons have showed nice pictures when they were young. But my CFO, a male, told me should you Photoshop it? I said I will not because I'm going to talk to these ladies and I know only ladies get this, sorry men, that this is the reality. This is not the reality. And I am in the uncomfort zone as you can see, really trying to focus. This is a leadership team meeting where we also have younger people who are not part of leadership team but I'm kind of trying to mix people. And we had the Kanban. This is maybe three to two years ago. I think we were watching a tower being developed. You see here the straps, some protos and so forth. So what is happening now? We are in an open office. I don't have room for myself either. So we are floating there around. It works perfectly. We have a lot of Kanban boards everywhere where people can work. And we've really taken into use also the safe software methodology in the whole company, trying to find a Reima way to do something. So now Reimagine 2020 is about culture, consumer, and global rollout. This is our strategy in short. I will not go deeper into that. But all in Reima know this. These are seven cornerstones and in the middle you have my Reima consumer-driven and digitized. In the very center of our strategy are these guys that everyone in Reima would know. It's Tuulia. To be honest, the one who does not have the time but is not so price sensitive, would pay anything that before the first snow someone would get the garments in. Now I am at or beyond most of you are most likely Tuulia. But that is the persona that we do all our digital development for. Reima goes suddenly fathers get interested in this kind of a persona. This person is as I said for digital the most important. Then it's Onni. Onni is at home with three kids, maybe even enjoys buying kids clothing. And for these people we intend to provide relevant solutions at the right time. And that is what our strategy is going forward. What Reimagine is about by 2020. They should say how could I ever survive without Reima? We try to take away. We know we have a good product and we have to strive to keep it relevant and still good. But what we could do is take away some time from the purchasing process which not many of us enjoy after all. And then take away, give time to something that you really love to do, be it with your kids, be active with your kids, or whatever rocks your boat. And then secondly to take away cognitive load so that you don't have to think when and what. This is like winter tires business. It's not about fashion. The snow comes, it surprises Helsinki, and then some of the mothers who were not planning that well will find out that their kids' overalls are too small. Citymarket at the before just closing time before the first snow, I got what was left and my kids well they looked winter times but they were warm. And right now going 2016, I put here that we took into account the agile methods. We launched Reima Go and we bought the Finnish Baby Box. So Reima Go is about wearable technology. There is an accelerator inside of this sensor. I have it here because I can't fit in Reima clothes anymore. So you can put it into a pocket in Reima Go or into a strap and then just forget about it. It's waterproof. Suunto has done it for diving. So you can forget it when you're washing the clothing. It gets the full points. But we are about to develop an algorithm that can tell whether the movement looks too simple for three hours. This has an app in parents' phone or a kid's phone. And then you put it into a clothing. The kid goes out. It starts to measure. You come home. Via Bluetooth it reads the data. And then parents can follow how active kids are. I even follow with all employees in Reima follow ourselves with this. So there is no GPS in that yet. That is what parents would like to have. But for the time being it's about activity. And we try to make it for kids so that actually nice stories that we get from families that still in the evening kids come to parents and say that can we take the Reima Go walk because I would need to get to the next level in the game. So the more you move, the further you get into this. It's not a game, it's more dashboard type of a thing. And then you get rewards. Parents can put them and you proceed. So you see that there is a connection between moving and rewarding that. But it's all about discovering that joy of movement that will stick to the rest of the life. So everything we do is surround this. Coming to the bundled services semi-personalized. This is a slide from our strategy before we bought the Finnish Baby Box. It's about we thought of this Tuulia and Onni, what are the real pain points in their everyday lives? Buying clothing was one of these. Could we then offer solutions so that you can push enter and you get your problems solved? And then we were provider of or supplier to Finnish Baby Box which was a startup. They copied the maternity package, Finnish government innovation, and started to take that international only via digital channel directly to consumers. And we supplied them products into this box. And suddenly CEO of Reima started to be in all of their customer meetings because I got interested in these guys how they work and what the idea was. Because this is exactly what we wanted to have. We then came to conclusion that why don't they come and work inside Reima with their project? And we named it the unit as a solution sales. They branded it themselves as Consider it done. Using startup lean methodology, I put them in the middle of our people as old dogs and the newer dogs so that organization would start to learn from these guys and they of course learned from us something about general business and so forth. And what we now is actually doing is about clothing as a service. Adding service element to the clothing. And that is the next step that we are working on now. 2017 has been a year of customer experience. We have a huge customer journey in our Reima kitchen where we keep some of our meetings. So we work around Tuulia and Onni and Reima and his kids and so forth. So how can we improve during all of the points of the customer journey? 2018 will be the year of loyal customer experience. And we continue to go forward to providing service which might then even include returning the clothing after the winter is over. Today we are being sold in 70 countries. 15% via own e-commerce and own online store in nine countries. 2011 I showed to you. 2017 where we stand: it's 110 million euros. Home sale is 75%. Finland is less than 20%. We have 45 Reima stores either owned or franchise. It's not actually our strategy to open Reima stores. It is about digital. So most of them are franchised stores. And 15% of sales come from e-commerce with two brands. We still have lots of brand also left. Russia is our biggest market. So this is in Euros and the value of ruble has doubled during 2016. Thank you.

Yes, not you. What is that people are there for getting kids active. So whatever you do around that, people and everyone understands that. What I try to say here is also that it's okay to say that you don't know everything. As some other ladies said also, yeah, because the change is so fast, so you just cannot control and cannot be. But you can learn all that. And I think that even a doctor in engineering... yes, exactly. Yes, we are now taking in engineers. I have a cure quota for an engineer from Tampere in my leadership team. Okay, well I've had all the time one engineer from Tampere. But actually we are very diverse. But now also men are getting interested in Reima suddenly with these. Oh yeah, I love it. My son Tristan has that. And thank you to the entire technology industry that gets our children moving. Reima Go, Pokemon Go, you know. Thank God that technology hasn't put our children sitting. They're moving. You're making our children move. You're making a great company move. You're making this country move. I want to thank you for coming to keep our... okay, that's enough. Thank you.