i3 - January/February 2017 - 104

Business

patience also translates to their hiring
practice, as 15 different store managers
were interviewed before the choice
was made for the new Hamburg store.
Kristensen believes it will take HFK 10
years to penetrate the German market.
"We could accelerate considerably," says
Kristensen, "but the risk would be hiring
staff that did not really get our DNA into
their veins."
If the growth plan is an indication of
how the firm is changing, the corporate
culture signals how it is not. In times
where consumers are often relegated to
chat windows online or offshore customer service, HFK continues to pride
itself on personal service. "The feeling
of being helped is valued by our club
members," says Kristensen. "We are
reachable and consumers appreciate that
kind of security."
The enthusiasm and commitment to
the club member experience are clearly
evident in Kristensen and his team:
they speak of the firm having a defined
culture based around customer satisfaction, quality products and a stable
workforce. "We must solve the needs of
the customer, and we feel we are obliged
to train our own guys," he says. Training
is focused on answering the question
104

JANUARY/FEBRUARY 2017

HFK CEO Svend Erik
Kristensen

"What is a unique experience?"
To create a bond with their consumers,
events are held in store locations after
hours, and use data-mining techniques
to determine which club members are
invited. To avoid spamming their customers, club members are never invited
to more than one event per month. No
sales are permitted at events, rather they
focus on new technology introductions
like wireless audio, streaming audio or
4K television. But make no mistake, this
is an audio company, and Kristensen is

quick to point out that "we have TVs in
the store to sell audio."
Changes in demographics are best
represented by the way the firm markets.
"Today, 80 percent of our marketing
budget is devoted to online media; five
years ago it was only 50 percent. Young
people are online all the time," says
Kristensen. "That is where you reach
them." Web sales account for 12 percent
and are growing, particularly in geographic areas where the nearest store is
20 minutes away.
Compare those figures to trends in the
European market, where e-commerce
accounts for up to 23 percent of sales in
CE according to HFK, and Kristensen
points out that high-fidelity audio
(rather than mass market products) need
to be demoed. "Every time we do a demo
in-store, the club member will receive
an SMS/email describing the products
demoed, with an offer to purchase the
product online." Thus, the notion of
showrooming is embraced by HFK as
a positive consumer experience and a
marketing advantage.
The firm also makes loyalty to its
vendors a part of the corporate culture.
"We have always had loyal partnerships with our major brands. Part of our
philosophy is to stay loyal with chosen
partners, obtain the best trading conditions with them, and in turn become
their single largest customer in our
markets," he says.
"Our business model is based on a high
degree of trust. There is a lot of trust
between our partners and us, and there
is a lot of trust between our customers
and us. It took years to develop that
sense of trust," Kristensen adds.
As business changes, retailing evolves
and the demographics and habits of
consumers change, HFK has managed
to balance adaptation with a consistent
culture and patient approach to growth.
As Kristensen prepares to retire and
turn the reigns over to two younger
company executives, he leaves them
with a challenge: "We can make our
service proposition to the consumer even
stronger in the future." n
I T I S I N N O VAT I O N
i3 - January/February 2017

Table of Contents for the Digital Edition of i3 - January/February 2017
