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NewsCrumpler bags new pop-upsThe iconic Aussie brand launches pop-up stores to test the waters. p4

FeatureMerry and brightNow that the festive season is here, it’s time for omnichannel retailers to shine. p10

AnalysisLosing gripToo many retailers are focusing on new customers, while letting old ones go. p6

In this issue

Squad goalsWhy Shoes and Sox is putting its staff at the heart of the biggest ad campaign in its history.

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A ussie kids’ footwear brand Shoes and Sox is about to embark on the most significant advertising campaign in its 32-year history, according to general manager Lisa Shalem.

The back-to-school campaign, which will run across Channel Seven, cinema, radio and out-of-home advertising, will kick off in mid-January. The campaign puts its shopfloor staff – known as the “Fit Squad” – at the forefront of the business, focusing on the longstanding expertise of the brand.

“It’s terrifying. There have been many sleepless nights about it. I can’t remember anything else I’ve done [that’s been as big] really, even rolling out 40 Myer stores in one day was less scary. This is scarier,” Shalem admitted to Inside Retail Weekly. “It’s huge for us.”

In the video campaign, the Shoes and Sox superhero squad is on a mission to find the perfect shoes for kids. As Shalem describes it, it’s “a bit tongue-in-cheek; it’s funny, and we’re not taking ourselves seriously”. The illustrated characters will also come to life in-store from January onwards.

The campaign signals the biggest investment in a brand marketing exercise by Shoes and Sox. Until recently, the brand was in its own niche catering to kids’ footwear; but in recent years, the back-to-school campaign period has become intensely competitive, with more retailers cashing in.

“Suddenly we have a whole lot of competitors – Williams,

Mathers, Athlete’s Foot, Rebel – which have come into the market, saying, ‘We’re the experts in school and sports shoes’ – and they’re discounting,” Shalem explained.

“Although we’re the only specialists in kids’ footwear, we haven’t done a good job of shouting that message. The reality is that all our competitors have more stores than us – they’re more national with bigger marketing budgets and they’re more attractive to a 10-year-old kid who has been shopping with us since they were two and doesn’t like the queues or the screaming babies [in our stores] and wants to go to a Rebel or a more adult store.”

In response to this, the Shoes and Sox team took a step back and decided to focus on what they’re known and respected for – specialising in children’s footwear from ages 0 to 10.

Developed by The General Store in Sydney, the Fit Squad concept will go beyond just the upcoming back-to-school campaign and will be permanently integrated across the business. From now on, the online team will be known as the Fit Squad and the “superhero” lingo will be introduced into stores, along with a six-point fit check, which has always been used by staff but will become a permanent fixture of point-of-sale.

“Our aim was to create an ownable platform that could roll out across every touch point,” explained Matt Newell, CEO at The General Store. “When we walked stores across the category, it became clear that the brand’s key competitive advantage was their people. Not just the technical training the team receive in fitting kids’ shoes but the business’s ability to recruit people with a natural talent for engaging kids. And every parent knows the value of kid-wrangling skills, especially at the shops!”

Within the video, three of the five superheroes are actual Shoes and Sox staff and, according to Shalem, the main aim of the campaign is to showcase the expertise of the staff and put them in the spotlight.

“Ultimately, the staff in your store teams – your casuals, assistant managers and managers – they’re the blood in the body of your business. You actually can’t survive without them, they’re so important. They have all the history, the day-to-day experiences, all the customer-facing learnings, they’re loyal, they manage their teams and you need them to be stable,” she said.

“It’s tough working in stores and it’s getting tougher, because the world is moving towards omnichannel. What it really means for [physical] stores is we’re pushing more work onto them. Online’s going to sell a shoe, but you’re going to pick and pack it and send it, or you’re going to pack it and get a customer to collect it. Or online will sell a shoe, but it’ll get returned to your store and you have to deal with it. Their jobs are hard.

“The world of stores is getting harder so this is a way of creating excitement for them and making them feel good about what they do. For me, the whole point of this campaign is to motivate and lift them.”

Amid rising competition, kids’ shoes specialist Shoes and Sox is creating a new image to better reach its core customer. By Jo-Anne Hui-Miller

A step in the right direction

NEWS

Experts in fit – and in kid-wrangling too.

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Onwards and upwardsShoes and Sox, founded by Shalem’s parents in 1987, was taken over by Brand Collective and Anchorage Capital in 2015. Shalem joined the company in 2010.

Since the takeover, the business has gone through a lot of changes. In 2015, Shoes and Sox had 25 stores, which has since grown to 72. The online store launched three years ago and the business entered a partnership with Myer, where it runs the entire children’s shoes category in 40 store locations and online. Shoes and Sox also now runs all the kids’ shoes at The Iconic.

Sales have doubled since the takeover, and last year, Shoes and Sox continued to grow in the vicinity of 10 per cent like-for-like online accounts, said Shalem. The business has more than doubled its profit not only through sales growth but also through “better optimisation of staff costs and warehouse”, she added.

In the next 12 months, Shoes and Sox is looking to enter shopping centres in regional areas that would have been previously viewed as being too small and less affluent. However, the brand has rolled out a new range of products specifically aimed at the Myer customer base in those areas which offer quality at the appropriate price point.

“We’ve opened four to six stores in this demographic and they’ve all started off extremely well. When we get the model right and it works in these six stores it’ll give us a model to open up 30 more stores,” explained Shalem.

In addition, Shoes and Sox will explore opening new outlet stores, the first of which will open in March next year in Victoria.

“The outlet store gives you a great way of selling through ends and sale stock you can’t clear. But also, there’s a customer in that segment that doesn’t see us, so we now have access to them, which will be a similar model to Myer. That’s exciting. There will probably be 10 to 15 stores there,” Shalem said.

In terms of e-commerce, Shoes and Sox will enter eBay, Amazon

and Catch, while also upgrading its own website, with a review function and click-and-collect. Loyalty will also be a major focus of the brand, as it moves towards offering more personalisation for customers in the future, such as potentially offering parents a personalised guide for their kids around foot health, depending on their age and life stage.

Plans are also currently underway for the business to enter Asia next year.

“There’s not a concept like ours – a multi-branded specialist kids’ retailer – anywhere in the world. In Europe, you have Pablo and Clarks, which both do monobrand kids’ offerings. But there are no chains of multi-brand retailers like us,” Shalem revealed.

“We’re on the brink of Asia and there’s a demographic and there are cultural trends in Asia that are so supportive of a business like ours that we’ve started to think about an Asia strategy.” IRW

NEWS

The world of stores is getting harder, so this is a way of creating excitement for [staff] and making them feel good about what they do.

Illustrations come to life in-store with the Fit Squad.

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M elbourne-based bag retailer Crumpler has adopted a strategy of launching three- to nine-month pop-ups to test potential locations before committing to new

store sites. “It’s a great opportunity to test the market, and there are a lot

more pop-ups around in the retail market, so landlords are more open to them now,” Adam Wilkinson, Crumpler’s chief executive, told Inside Retail Weekly.

“We get a lot of invites to look at sites – there are some great ones available.”

Crumpler has opened two new pop-ups in the last month – on Swanston Street in Melbourne and Broadway in Sydney – and while their footprints are smaller than a typical Crumpler store, they are trading to expectations, according to Wilkinson.

The retailer also recently opened two full-size stores in Spencer Street Mall in Melbourne and Market City in Sydney after proving the market through successful pop-ups.

“We realised they were areas that work for us. We’re looking at pop-ups being the first part of a store strategy in terms of finding the right location for us,” he said.

Part of the reasoning behind Crumpler’s new approach is an aversion to commit to longer leases in a struggling domestic retail market, Wilkinson said, with landlords remaining bullish on rent, forcing many retailers to push discounts in order to stimulate demand.

“We’re still getting growth, but Australian retail is tough – especially when we look at our Southeast Asian business where growth rates are significantly higher,” Wilkinson said.

“It’s a similar model and footprint, but our Asian retail business, which is our own stores in Singapore and Malaysia, has seen a 28 per cent growth year-on-year. Excluding wholesale and online, our Australian business is sitting at 4.5 per cent growth on last year.

“For us, we see ourselves as a relatively niche brand, and we think we’re close to maturity in the Australian market in terms of retail doors. We’re very close to the peak of where we see it in Australia.”

Crumpler recently opened its first permanent store in the Philippines in Manila and will launch a second by the end of the week. It is also eyeing further stores in Malaysia and Singapore as part of a larger international growth strategy that could encompass Korea, Japan and Thailand in the near future, according to Wilkinson.

This doesn’t mean Crumpler is no longer investing in the Australian business. In fact, it just implemented click-and-collect across 17 of its stores, making the offer available in almost every state.

“We had a lot of customer feedback from surveys [and] overwhelmingly they were asking for it,” Wilkinson said.

Customers said they wanted to be able to secure the product online, but head in-store to talk through the functionality of the bag or luggage with a salesperson before commiting to a purchase.

Travel luggage heats up onlineCrumpler’s online sales are growing faster than its bricks-and-mortar business, at a rate of about 15 per cent on last year according to Wilkinson. But competition is growing in the luggage space, with direct-to-consumer player July entering the market recently with backing from Strandbags.

“We’ve noticed there is definitely more online-focused businesses coming up and playing the space, and potentially taking some market share,” Wilkinson said.

“We haven’t seen a drop in our hard case luggage sales, which is encouraging, but it is out there. I think that for us as a brand, we’ve remained true to our roots. While we’ve launched a hard case luggage brand, our focus is on making sure it has a unique design aesthetic.

“We know there are other players out there, especially in the tech space, but we want to stay true to the collection and the rest of the product range.”

A willingness by landlords to trial new retailers as pop-up locations has allowed iconic bag brand Crumpler to expand its Australian retail footprint with low commitment to locations. By Dean Blake & Jo-Anne Hui-Miller

Crumpler tests the market with pop-up stores

IRW

NEWS

Crumpler has opened two new pop-ups in the last month, which could evolve into new

stores depending on consumer adoption.

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NEWS

“So much more than just technical sustainability”: Burwood Brickworks opens

Glue makes a case for a luxury, youth department store

Adairs acquires online-only homewares brand

The Reject Shop appoints former Kmart exec as new CEO

Why Ikea and Nike have walked away from Amazon

Metcash half-year results tumble on lost supply contracts

Braun, Hisense, Tefal among major brands available on Bunnings’ marketplace

Black Friday post mortem

Why 2019 was so tough for retail

Marketplace platform raises $20 million

This week’s top 10Our most read stories from the past week at insideretail.com.au.

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Comment of the week

“If there was more of a genuine focus on and care towards floor staff, retail businesses would find they have lower turnover, happier staff, better customer service, loyal return customers and decreased stock theft.”

Lyssa - My 10 fundamentals of retail

Woolworths faces higher claim

Metcash hit by lost supply contracts

Woolworths has been hit with a class action from around 7000 current and former employees who claim that the underpayments scandal is much worse than the $300 million estimate reported in October.

Canberra law firm Adero Law has filed a class action lawsuit against Woolworths Group in which it estimates the amount owed to employees at $620 million.

The Sydney Morning Herald reports that the action is being led by and on behalf of a former night-fill manager, Cameron Baker, who Adero estimates is personally owed more than $150,000.

Woolworths responded that it doesn’t understand how Adero arrived at its $620 million figure.

“We have taken a view of up to 10 years and factored in all group businesses,” a Woolworths spokesman told the The SMH.

In a statement released to the ASX, Woolworths said it will “fully defend the proceedings”, which it believes are “without merit”.

Woolworths is in the process of reviewing all of its businesses, including its liquor and department stores, and will provide an update at the group’s half-year results in February.

Last Friday, chief executive Brad Banducci announced that he will forgo his $2.6 million bonus this year in the wake of the payment scandal, while chairman Gordon Cairns has taken a 20 per cent cut to his $790,531 board fee.

Despite growing sales in its food and liquor pillars, retail group Metcash delivered a net loss of $152 million in the first half of FY20.

The result was impacted by a $249.3 million impairment due to the loss of the 7-Eleven contract, as well as Drakes Supermarkets in South Australia and the introduction of a new accounting standard.

Before the impairment, the company delivered an underlying profit after tax of $90.6 million, down on the $100.3 million delivered during the same period of FY19.

According to Metcash group chief executive Jeff Adams, the first half included significant achievements, despite the losses.

“I am pleased to report that our supermarkets business delivered wholesale sales growth, including on an ex-tobacco basis after adjusting for the impact of ceasing to supply Drakes,” Adams said.

“This is the first reported increase in wholesale sales ex-tobacco since FY12.”

Total Food sales increased 1.2 per cent to $4.4 billion, with sales improving across all states.

IRW

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SPONSOREDANALYSIS

T here are a lot of retailers wallowing in self-pity as consumers continue to go slow on retail spending. However, those retailers are likely to be victims of their own making, rather

than casualties of new competitors, including online vendors, and consumers keeping their wallets closed.

The macroeconomic environment continues to be challenging with consumers directing tax cuts and interest rate savings to stem rising household debt levels and higher charges for services.

While the deep discounts of Black Friday sales enticed consumers to stores, sales in the first week of December were below expectations and the Australian Bureau of Statistics hardly added any cheer, reporting that October retail sales had flatlined.

It is little wonder that many shoppers are increasingly buying online or frequenting some of the new international retail brands if they are inclined to spend at all.

Too many retailers have betrayed the loyalty of their customers or have strained the relationship through their actions.

There are few things that annoy customers as much as special introductory offers, discounts and gifts designed to lure new customers when those benefits are not available to them.

It is a practice that is a lot like pouring water into the top of bucket that has a hole at the bottom and the fact is, it costs less to retain a customer than to win a new one.

When retailing is so challenging currently, one would think that retailers would want to keep every customer they can and to reward loyalty.

Many retailers certainly spend a lot of money on customer relationship management (CRM) programs that include discount loyalty cards, but that investment is itself discounted if new entrants to the program obtain higher benefits than existing customers.

CRM programs can also be a dealbreaker with customers if they become intrusive and annoying.

I actually think I am being stalked by Jack London. I have never shopped at Jack London which sends me virtually daily emails with discount and price off sales. I note that retailers are being encouraged to use text messages to customers, but I think that could be problematic with a pushback on privacy unless the customer specifically requests alerts.

Contacting customers through emails and texts does not ensure loyalty or necessarily build or strengthen a relationship.

The critical factor in a customer relationship is not how often you contact them or which media you use but the message. Too many retailers focus on what they want to say rather than what the customer wants to hear or know if loyalty is the objective.

Scandals and the trust factorThe other important element of developing and securing customer loyalty is trust and some retailers are certainly risking the trust of customers.

Coles supermarkets failure to pass on the full 10 cents price increase to farmers impacted by drought that was promoted could test the loyalty of some customers.

The supermarket has suffered reputational damage and political censure for not passing on the full price rise on milk that customers understood was the retailer’s commitment.

That decision may not immediately dissuade customers from shopping in Coles supermarkets but it undermines trust and credibility, making loyalty less of a consideration.

Similarly, revelations of underpayment of employees and food safety concerns by the Grill’d hamburger chain is likely to have adverse consequences for customer loyalty.

It is inexplicable how chains and franchise systems are still being found to be underpaying staff when there has been such extensive media coverage, a parliamentary inquiry and legal proceedings.

The damage for chains like Grill’d impacts recruitment and retention of good and motivated staff which, in turn, impacts directly on customer service and loyalty, not to mention the customer reaction to retailers not meeting their obligations as employers.

Customer loyalty is a fragile commodity but is a crucial factor in generating sales and protecting market share and there is usually no one else to blame if it is compromised.

Special introductory discounts and coupons often annoy established customers, who feel betrayed and taken for granted. By Jared Dickson

Chasing new customers can be counterproductive

IRW

It’s easier to retain a customer than win over a new one.

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Hong Kong recovery tippedDespite being hammered by declining visitor numbers from the mainland, the Hong Kong retail industry will recover, says leading analyst Pascal Martin, a partner at OC&C Strategy Consultants.

Hong Kong retail sales in October plunged by 24.3 per cent year-on-year, the largest decline since records began. That followed a revised fall of 18.2 per cent in September, and several retailers have told Inside Retail Asia they expect November’s figures to be even worse.

But Martin has a positive spin: “The Hong Kong market will recover, as it always does. As soon as Chinese tourists are reassured about the safety and convenience of visiting Hong Kong, they will come back.”

However, he cautions that the recent events have accelerated “a structural trend” that Hong Kong is not as attractive a retail destination as it used to be.

“There are a variety of reasons contributing to this trend – among them the lower China taxes and duties, and brands’ global pricing structures that have become much more homogeneous and harmonised, with smaller price differences across markets because of the transparency created by the internet.

“Additionally, Chinese travellers also have a greater diversity of shopping destinations beyond Hong Kong, with Japan, South Korea, France and Italy becoming increasingly popular,” Martin said.

Walmart testifies on data collectionRetail giant Walmart has revealed in testimony to a US Senate committee the overwhelming extent of its data collection on customers, Reuters reports.

The world’s largest retailer testified before the US Senate Committee on Commerce, Science and Transportation that it collects myriad forms of customer data – including personal information provided directly by consumers, personal information provided by third parties, purchase history, healthcare data, browsing information, device information and location data.

It also sells or rents individually identifiable customer data to third parties for business activities, including fulfilling customer orders and processing payments.

Walmart said, though, that it is ready to comply with new data privacy laws to be instituted by the state of California on January 1. It also stated that it is in favour of consumers having “reasonable controls” with regard to the use, collection and sharing of personal data and that it supports a comprehensive federal privacy law.

Uber eyes courier serviceUber Technologies CEO Dara Khosrowshahi has revealed that the ride-hailing company may extend its food delivery service to offer courier services for other retail businesses.

Khosrowshahi, who took the helm of the business in 2017, was speaking at a meeting before the Economic Club of New York last week.

“We can extend the food delivery model to essentially every single local retailer,” he said, “so that anything you want in New York City can be delivered to you – hopefully in under 30 minutes.”

Reuters reports that Uber in October bought a majority stake in

Chilean online grocery provider Cornershop; it is believed that was a move to seek to widen its food delivery app to include groceries and other goods.

Ocado launches bond offeringBritish online grocer and technology company Ocado has launched a £500 million ($959 million) convertible bond offering, partly to fund the construction of robotic warehouses for its overseas partners, Reuters has reported.

While Ocado’s retail business has only a 1.4 per cent share of the UK grocery market, its state-of-the-art technology has enabled it to win partnership deals with supermarket groups around the world, including Kroger in the US, Casino in France Coles in Australia and most recently Aeonin Japan.

Those deals have powered the group’s £9.3 billion ($17.8 billion) stockmarket valuation, up 68 per cent this year.

Around the globe

Coles’ technology partner Ocado is raising funds for the construction

of robotic warehouses.

IRW

AROUND THE GLOBE

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P atagonia’s recent London opening of an “activist cafe” – which educates consumers about and promotes activist causes – is the latest in an escalating, increasingly proactive

shift in retail activism. As a term, “retail activism” has been around since at least 2011. It

has picked up pace with the rise of B Corps, which balance people and profit. Australian retail B Corp members include Kathmandu, GlamCorner, Flora & Fauna and Koala, and Patagonia has been a B Corp in the US since 2011. Global companies such as Natura, owner of The Body Shop and Aesop, report on a “triple bottom line” incorporating profit, people and planet which, according to a 2016 Deloitte global survey, is an expectation of 87 per cent of millennials.

There’s some evidence that a focus beyond profit pays dividends. An edie.net report from 2018 suggested that B Corps were growing 28 times faster than the UK economy, with nearly half attracting employees because of their B Corp status. A Capgemini 2018 brand loyalty study indicated that millennials have the most emotional engagement with brands and are drawn to retailers they trust. According to a study by Sprout Social, 66 per cent of customers want brands to take a stand on big issues.

Retailers have been responding in various ways. In September, numerous companies – among them Lush, Mud Australia, Koala and Australian Geographic – gave their employees time off to attend climate protests.

It could be argued that one of the more passive forms of corporate social responsibility – albeit one not lacking in controversy – is de-ranging categories.

In the US, after the Parkland, Florida, school shooting, Dick’s Sporting Goods ended sales of all assault-style rifles and high-capacity magazines, prompting similar moves by Walmart. After the Dick’s announcement, Sprout Social’s analysis indicated that tweets mentioning Dick’s Sporting Goods jumped 12,000 per cent, with 79 per cent of them showing positive sentiment.

In 2014, after US drugstore chain CVS stopped selling tobacco products, consumers who bought cigarettes solely at CVS stores were then 38 per cent less likely to buy tobacco at all. Overall cigarette purchases dropped by 1 per cent across 13 states, or 95 million packs, in the subsequent eight months.

More recently, corporate “acceptable use” policies are beginning to impact retailers. Software behemoth Salesforce has instituted a policy barring retail customers from using its technology to sell semiautomatic weapons and other firearms, which could see it lose some enterprise customers. Shopify, which powers over 800,000 e-commerce sites, has followed suit. Salesforce has also threatened to withdraw investment from the state of Indiana if an anti-LGBT law was not withdrawn.

Aldi US recently announced a new policy on pollinator protection, encouraging suppliers to find alternatives to harmful pesticides. Costco soon followed suit. Hardware chain Lowe’s similarly has announced an update to its chemical policy. But sustainable supply chains are fast becoming table stakes and cost of entry, rather than differentiators.

Cause-related marketing by another name?Retailers and consumer goods companies are increasingly willing to show they stand for something in their marketing activities.

One of the higher-profile and more recent examples was Nike’s Colin Kaepernick campaign, which earned the company $6 billion in sales while sparking a boycott, even if only 45 per cent of consumers felt Nike had a genuine commitment to “risking everything to stand for something” – the campaign’s tagline. Likewise Gillette’s “Is this the best a man can get?” anti-sexual harassment campaign has attracted a mixed response.

Target US decided to expand the use of gender-neutral bathrooms in its stores, meaning transgender customers and employees no longer needed to make potentially fraught decisions about which bathroom to use. But it evidently didn’t scare away shoppers, with the immediately following Q1 2018 results showing a sales rise of 10 per cent.

Choosing a polarising issue can be powerful, but potentially isolating. Something like Levi Strauss & Co’s “Circle” TVC, which promotes inclusivity, is inoffensive. Levi’s also pledged more than $1 million in one month alone in 2018 to support non-profits and youth activists working to end gun violence.

Where consumer scepticism sets in is when the talk is not walked, when the cause selected is not a match to the brand, or smacks of bandwagoning.

Retail activists, are you walking the walk?Retail activism can be worthwhile if organisations choose causes in keeping with their brand and woven into their DNA. By Norrelle Goldring

Nike’s Colin Kaepernick campaign, while sparking a boycott, still earned the company $6 billion in sales

AROUND THE GLOBE

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Walking the talkThe Body Shop has a long history of corporate social responsibility and activism, with its “Body Shop Talks” activist videos streamed globally monthly. Not only has its recently refurbished Bond Street, London, store introduced plastic-free refills, an “activist workshop” space gives visitors information and infrastructure to get involved with various causes at local, national and international levels. Tools include an interactive screen, a noticeboard and a donation box, and activist-led events are hosted at the store.

Patagonia likewise has a deep history of activism, particularly around climate change and the environment, which is a natural fit for its outdoor brand. Moving from donating 100 per cent of its Black Friday sales in past years to environmental causes to boycotting it altogether this year, Patagonia recently filed a lawsuit against US President Donald Trump after the administration illegally reduced the size of two national monuments by up to 85 per cent. Patagonia supported this with a controversial “The President Stole Your Land” TVC featuring emotion-filled words and calls to action.

The Action Works activist cafe is the latest expression of Patagonia’s activism. Opening last September at London’s Broadway Market, it hosts climate activist training courses and workshops run by environmental and social experts through Patagonia’s “1 per cent For The Planet” scheme, whereby 1 per cent of annual profits are given to various causes, currently totalling more than $100 million. The space also acts as a library for activist thought leader tomes, and a series of ‘action postcards’ details different actions the reader can take to combat climate change and biodioversity loss. In October, Patagonia staff and campaign groups ran stalls outside of the cafe to educate passers-by. Patagonia’s ‘open-door’ policy with the NGOs it supports sees organisations use the space to educate both consumers and staff.

So, to Australia. The Committee for Economic Development of Australia’s recent poll of 3000 people indicated more than 70 per cent of the public agree that large companies should place equal importance on economic, environmental and social performance. More than three quarters of respondents supported business leaders speaking out on issues of national importance, including social and environmental issues. But fewer than half perceived business leaders to actually be speaking out in the national interest, likely not aided by the Morrison government’s short-sighted call for companies to focus on economic debates rather than ‘distractions’. Further, 90 per cent think companies will offer opinions only if it’s in their own interest to do so.

Retail activism can be a good path if the cause chosen is consistent with the brand, and woven into the organisation’s DNA via both internal and external activities that create change, and through empowering and encouraging employee champions. By taking a stance on hotly debated issues, brands may risk alienating some people but build a base of fans elsewhere.

Sorting out a sustainable supply chain is a cost of entry, and brands and retailers who try to be all things to all people risk not only lack of differentiation but irrelevance. Retailers are beginning to actively promote themselves as companies and spaces for people concerned about human rights, health and the environment, and not just because it’s good for business.

Norrelle Goldring has 20 years’ experience in retail, category, channel and customer strategy, marketing and research, working with global retailers, manufacturers and consulting houses. Contact: 0411735190 or norrellegoldring@hotmail.com

Patagonia took part in the recent student climate strikes around the world.

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AROUND THE GLOBE

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N ovember’s epic sales events have become the mainstay of retailers’ pre-Christmas calendars. Singles Day made a big splash in Australia and New Zealand, with several retailers

seeing record revenues. Black Friday seemed to start on the Monday, and Cyber Monday was a hangover cure for the prior weekend. Who knows when Boxing Day actually starts now?

The timing – and creativity – of these events evolve each year as brands seek consumer attention in an ever more log-jammed space. With Singles Day on November 11, a fortnight ahead of the rest, it is expected to be a more aggressive event in 2020, although the links with Armistice Day make this a treacherous space for marketers.

It was particularly interesting watching the anti-sale movement gathering pace this year. Many sustainably conscious brands ramped up the anti-consumerist rhetoric, with some notably fantastic campaigns from the likes of Allbirds and Patagonia.

Boom DecemberAs we hurtle into another Christmas season of excess and frivolity, retailers continue to fight the revenue-versus-margin balance, all in the pursuit of maximising opportunity.

It must be remembered that click-and-collect is not a digital strategy, it is a consumer experience strategy embraced by the educated customer, who is ever more informed – there’s a general consensus that 60 to 80 per cent of consumers are researching products online. When a customer logs on to your website, they’ve come for a brand experience. The combined impact of all retail, marketing and content experiences leads to this.

While physical retail still accounts for more than 85 per cent of

transacted revenue across Australia, there is now a heavy lean towards blending these experiences. Data suggests that the lifetime value of a consumer engaging across channels is 2.3 times that of one engaging through a single medium.

You just can’t beat the personal service. The discerning eye of the modern consumer demands dedication to the process and store staff to appreciate the opportunity in front of them.

Leveraging dataThe current ideal for consumer experience is the single customer view, where we can blend data from both in-store and digital transactions. This tends to be driven around a loyalty program, and requires a notable investment in POS, middleware and online solutions (not to mention continued investment in a tech-enabled performance marketing team). Concepts around the utilisation of this data could include: � Welcome series and promotion � AI-driven product recommendations � AI-driven on-site content � CRM segmentation (gender, geolocation, frequency, ranging, etc) � Follow-up (leave a review, second purchase discount, etc.)Marketing teams should drive online consumers in-store for fittings,

to test products and take part in VIP events, specials and clearance deals. In turn, loyal in-store consumers should be pushed to engage online to continually drive product knowledge, tertiary purchases, social advocacy and brand loyalty.

The consumer is used to the immediacy of online shipping, and thus there needs to be dedicated attention to the physical execution

As Christmas beckons – and the plethora of retail discounting events concludes – this is when multichannel retailers come into their own. By Todd Welling

‘Tis the season for click-and-collect

FEATURE

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‘Tis the season for click-and-collect

of click-and-collect. This should manifest as exclusive pick-up areas, akin to the “internet booking” lane at cinemas.

Educated retailers should be nurturing consumer tastes and prepared with up-sell garments, accessories and add-ons. This personal product knowledge cannot be replicated online, and the cost of a click-and-collect operation should be offset through these cross-sells. Invest in the data, educate the staff, record the results – and continually finesse.

Maturing click-and-collect Several permutations of click-and-collect have evolved in the market.

Ship to store allows your online site to operate from a dedicated inventory warehouse; orders are fulfilled from the warehouse and sent to the store for collection. This is the quick and dirty version of click-and-collect, and ensures there are no inventory errors; it can be easily implemented within a customised checkout. There is some customer convenience here, but the operational efficiency is lost as the same pick, pack and ship costs are incurred. In this instance, it is paramount that the retailer leverages the up-sell opportunity.

Reserve in-store allows a consumer to reserve a garment in-store, which is held for them for a period of time. This requires the exposure of store inventory, but is a low-resistance path online as it does not require a customer checkout. This does generate the need for an accurate communication system as it’s not ideal to hold up valuable inventory.

Endless aisle is the utopia for larger-format retailers, as this exposes all stock to all channels at all times. This requires a deep investment in a technology stack that allows for real-time inventory and the subsequent allocation of stock. Consumers then choose their store, and products are either picked directly, or consolidated across multiple stores with automated internal transfers. This structure greatly enhances the retailer’s ability to transact.

Do customers always collect?A strange phenomenon is that around 15 to 20 per cent of customers never come to collect their product. Life just gets in the way. And some savvy consumers have realised this is a quick path to free shipping, as the in-store customer service team can rarely work out how to charge the customer the freight and want the parcel clear of their area.

Managing returns Product returns are also a key part of the consumer loyalty loop, and should be considered an extension of click-and-collect. As discussed, the consumer expects a single brand engagement, and thus should be able to return any product in-store if purchased

online. This gives the retailer a fantastic opportunity to avoid the refund, and drive both an exchange and an up-sell. The retailer’s focus should always be around lifetime value, and this is a fantastic opportunity to convert an online consumer into an omnichannel one of greater value. The warmth of person-to-person contact can convert a moment of tension into one of reciprocity and advocacy.

Awkward freight itemsThose awkward freight items are an ideal candidate for click-and-collect. This allows consumers to avoid exorbitant freight costs and the retailer to absolve themselves of any damaged freight. Furthermore, this is relevant in the B2B space, where tradies collecting bulky items can save the significant costs of having items shipped to site, and can control the immediacy of collection. Retailers need to consider dedicated pick-up lanes, pre-loaded trailers, live local and global inventory, pick-up time and direct messaging for this market.

The politics of sales attributionThe biggest resistance to click-and-collect is often from the physical store managers, as they fear that the attribution of a sale will passed to the online store while they have had to fund a staff member to support the collection, all for no return on their margin line.

There are multiple contentious solutions to this involving the application of a customer attribution flag in the CRM/POS/ERP. Some retailers lean to a persistent first touch, others to a last-touch engagement. Other solutions lie around geographic territories of postcodes, while the more liberal just divide the online revenue by the number of stores.

Regardless of the politics engaged, and solution derived, it is pivotal to have this discussion with your senior teams to ensure there is a universal drive to push the brand forward.

Not an afterthought, but a strategyClick-and-collect is not a simple bolt-on. It requires a deep investment in technology, data movements, in-store hardware, staff training, smart marketers and some internal politics. However, it has now become a core expectation to have a singular unified brand experience that places control firmly in the customer’s grasp, enabling them to transact when, where and how they choose. It is the retailer’s role to enable the consumer and wrap the brand experience around them at every given opportunity.

Service wins. Every time.

Todd Welling is group CEO and founder of Overdose Digital. Overdose is a consultancy service that drives fiscal growth outcomes for their clients through digitally let strategies.

IRW

FEATURE

Reserve in-store allows a consumer to have a garment held

for them for a period of time.

12 insideretail.com.au

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Speaker Highlights

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ChristinaHollingsworth

HEAD OF RETAIL - CAMILLA

Richard FacioniCHAIRMAN, ALCEON

Nati HarpazMANAGING DIRECTOR,

CATCH GROUP

Lynna BarretHEAD OF E-COMMERCE -

DAN MURPHY’S

Dr Rebecca Dare MANAGING DIRECTOR, ACRS

- MONASH UNIVERSITY

Pippa HallasCEO - ELLA BACHÉ

Eric MorrisCEO, PAS GROUP

Marcio Oliveirada Silveira

SENIOR MANAGER/BRAND &

NEW CHANNEL STRATEGY -

SAMSONITE

GOLD SPONSORS

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Join us at Inside Retail Live for a two-day conference with over 80+ international

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Inside Retail Live is back for 2020 but we’ve shaken things up and created an all-new formula to bring you

an agenda jam-packed with great insights from some of Australia’s brightest retail leaders.

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Q&A

Inside Retail Weekly: Congratulations, Billini’s celebrating its 10th anniversary this year. How did it all begin?Susannah Khouzame: Billini started back in 2009. It piggy backed off a sister brand that I originally started in 2007, which was called Billie. Billie was all about unisex streetstyle canvas products and disposable footwear. It was when that whole fad of $20-$30 sneakers was in. During that time, we had a lot of interest from customers for more fashion-forward women’s product. It’s something I was very passionate about, so we launched Billini.

Billini started in my garage and I used to get a lot of complaints from neighbors about the smell of shoes at the time. There were a lot of rubber shoes when we first started! It was all me, me and me. I was the invoicer, the pick-packer, the delivery driver, the salesperson, the designer, the quality control in China – I used to do all the trips, I was going back and forth all the time when I didn’t have children.

At the same time, I was also studying a Bachelor of Law and Accounting, recently married and working full-time in fashion. I was basically managing a retail store and doing a bit of buying on the side.

As things progressed, we got manpower on board and after six months, my sister joined us. It was a small team for quite a while; it’s only been recently that it has expanded quite substantially. At head

office, we have 30 people, and in stores, we have 80. It’s quite hefty. We also have sales agents in each state that represent the wholesale division. We have three divisions – wholesale, retail and online.

IRW: Tell me about your previous experience in fashion and how it helped you launch the business.SK: I was working in a retail store at the same time, so I had good sales experience and retail knowledge as well as buying experience. However, at a footwear level, I had zero experience. I was basically self-taught from the word ‘go’. I had a passion for shoes, and that was it. I saw a gap in the market for affordable fast fashion footwear and I jumped onto that. I was basically working full-time and working on this project after hours every night. I started from scratch with sourcing and had some design ideas and after six months of back-and-forth with prototypes and designs, I basically came up with our first little capsule collection and learned lots of lessons along the way. I guess I used my strong communication and negotiation skills and persistence to progress the brand. I think the fashion and retail experience helped me, but only minimally. I learned everything along the way.

To this day, I am involved in the creative aspects of the business, so I basically control the product, design, production and marketing. I still have a good understanding and knowledge of the financial

This month, on-trend footwear label Billini celebrated its 10-year anniversary, as the brand kicks off plans to open more stores across Australia and the rest of the world. Founder Susannah Khouzame discusses the need for speed in fast fashion, the challenges of shoe size diversity and the key to creating great social media content. Interview by Jo-Anne Hui-Miller

From the source: Susannah Khouzame, Billini

15

department. I’m fortunate to also have a very business-savvy husband, so we work well together, according to my business coach.

IRW: How has the business evolved in the last 10 years?SK: When I first began, I had to convince my husband at the time to invest in this business because I had so much passion and belief that there was a need for a brand like this in the Austrailan marketplace.

I didn’t expect it to grow to the point that it has today, but it was basically a one-man team at the beginning and now, some of us here call it a big Billini monster. We have a lot of talent behind us and it’s grown into something I’m really proud of. We’re offering girls out there that on-trend look for the season without the high price tag. We pride ourselves on our branding, our quality workmanship and all those things we’ve invested in our core values as a business.

IRW: What are your plans for the next 12 months?SK: A lot happens in a short space of time here. In the next 12 months, basically we’re looking at expanding into international markets. We’ve just finished selling our first season in the US; that’s the main market we’re concentrating on initially. We’ve got a great distributor in the US who represents other brands like Lack of Colour, Quay and Acler. We’ll have the first delivery drop in March next year, when Billini will launch in the US. We’re going to showcase the next range in February in Las Vegas and New York and then we’re also going to expand to other countries worldwide. We’re actually selling at the moment to Greece, Cyprus and quite a

few parts of Asia and we’re looking at places like Europe and South America.

IRW: Would you mostly look at doing wholesale overseas or would you open stores too?SK: You can never say never and we’ll definitely look at stores if it’s successful. Going by the feedback we’re getting from our distributor, everyone’s loving the product and pricepoint. Although the US is such a large space, there’s still a gap for a brand like Billini.

At the moment, we’re also concentrating on more stores locally. At the moment, they’re all in New South Wales, but we’re looking at national sites as well, like Queensland and Victoria.

We’ve only had retail stores in the last five years; we were just wholesale for the first five. We have 12 stores now, with one opening in Wollongong and lots more to come.

IRW: What’s the footwear market like in Australia?SK: In Australia, the market is quite small. I feel like the competition really does lie with the big international retailers. In terms of our look, feel and type of product, there are not many brands out there doing what we’re doing. There are a lot of conservative leather brands with double the pricepoint, then you’ve got more low-end brands, but in the middle, there aren’t many, and that’s where we’re trying to capitalise.

Our goal is to build that cult following. We want to become that destination for girls in the Australian market. We have such a huge range, we can’t physically buy the range that we develop for our stores, we just don’t have the space. Our wholesale offering is

Q&A

►

Khouzame says the company needs to be continuously looking at what A-listers, celebrities and influencers are wearing.

16 insideretail.com.au

much larger, so we select product according to the location and demographic. Even the sizes are different depending on the stores. But online, we generally have our entire range, which is a big powerhouse in itself. We’re about to relaunch a new site, which is exciting.

IRW: Can you talk to me about the process of making fast fashion footwear?SK: It depends on the business and brand, but generally, a non-fast fashion brand will have a lot more time in between the processes, but overall, the processes are still the same.

We develop so many SKUs, we need to be on the pulse 24/7. We need to be continuously looking at what A-listers, celebrities and influencers are wearing, what’s on the streets of Fashion Week, the arrivals in high street and department stores, the new arrivals in the

Australian market and what the girls are wearing here. We need to have all those bases covered in order to be fast enough. One of my suppliers, who deals with fast fashion accounts all over the world, jokes, “Most of my customers are running, but you guys are just flying!” He jokes that we’re developing for 2025, but we really are very fast.

We’ve got hundreds of SKUs in production at once. We are dropping new styles every single week. At a wholesale level, originally, we only had a summer and winter [collection]. Now we have four or five summers – main summer, second summer, high summer, injections and in-between. Really, that’s the only way you can keep up with the trends and be quick to market. That girl wants that look and if we parked a style for the following season, it would look too dated. So we need to have lots of injections, whether it be jumping onto it straightaway at a retail level for our stores, or wholesaling it immediately. We normally blast out flyers [to our wholesale customers] and say, ‘This is the new look, you have three days to place your orders and stock will arrive in a few months’.

In terms of quantity, we’ve got hundreds of styles this season. We’re showing new product at least once a month to our customers and delivering hundreds of styles every season. We can fit about 300 SKUs on average in our stores and we’re obviously injecting new styles, and styles sell out.

Sometimes in the Australian market, you don’t want to be too fast and we have to rein things in because we feel like our girl is not ready for a particular trend and look. We jump onto most trends, but we hold out on others, especially in the synthetic area.

IRW: There’s a lot of talk about sustainability in retail these days. What are you guys doing in that space?SK: We’re always looking at ways of improving. We go through tens of thousands of satchels for online orders, but we’ve now teed up with a company that offers recyclable satchels. I’ve culled my suppliers down to a few main ones and they’re big on social and ethical standards. They’ve been audited by internationally recognised companies and if you do visit the suppliers, you’ll see a big difference from other things you’ve witnessed in China.

IRW: Another hot topic these days is size diversity, especially in fashion, although not so much in footwear. What are your thoughts on that?SK: There are limitations in footwear. Traditionally, our sizes range from five to 10. On the odd occasion, we do get asked for fours and 11s, but it depends on what the supplier holds in terms of lasts [the shoe moulds] – they cost thousands of dollars just to make full ones in one size. It’s not as simple as clothing, where you can keep using paper patterns.

Footwear is different, so at one stage, we were making our core basics in a size four, but there were only a few requests. It wasn’t something we felt like the market really needed. The sizes just weren’t selling. These days, girls are asking more for 11s, but not often. It’s something we consider. To be honest, our sizing runs a little bit large, so we do get a lot of feedback that girls with a large 10 or 11 can fit into some of our 10s. So generally, it’s not something that’s required. In the US, it’ll be something we’ll be asked about more, and we’d be open to increasing the size range when needed. It depends on the demand.

IRW: Is there much diversity in terms of different calf sizes in your range?SK: It depends on the style, but nowadays, we’re actually making some boots with a stretch microfibre as opposed to something that

‘We’re offering girls out there that on-trend look for the season without the high price tag,’ says Khouzame.

Q&A

17

has lining. A lot of the boots made from stretch microfibre will fit any calf. We also have one boot which has become a staple style in our range, which has a front panel made from suede or PU with lining, and the back panel is elasticised, so it’s made for girls who like a firm fit and have a bigger calf. We’re definitely onto that.

The Aussie foot is quite wide in general; we generally try to steer away from narrow lasts. Suppliers generally ask us to use the European or US lasts and we always go with the [wider] US lasts. Some brands have a very narrow fit; however, the majority of our ranges are more roomy.

IRW: Social media plays a major role in your strategy. Can you tell me about the kind of content that you upload?SK: We’ve got an amazing, very engaged online community, and we have questions and feedback thrown at us all day every day, mainly on Instagram. That’s the space where we connect best with our followers. We have a dedicated social team answering questions, posting and scheduling content, working with content creators and shooting content in-house That’s something we believe we really focus on, as opposed to our competitors. Content is key these days, especially for shoes. Girls like to see shoes on foot. On the shelf, they look very different.

We like to post styling videos and show followers how to style our favourite shoes right now. We also do brand Q&As, where followers tell us what colours, prints and shoes they love most and what styles they’re on the hunt for. We do regular in-store tours as well, where we visit a different store of ours and do a story on that. Influencers

support the brand immensely, we love sharing their posts on social media; it’s the way of the world. We also love taking our followers on buying trips. If I go on a trip, I’ll take everyone on that journey so they can check out upcoming trends and what’s happening overseas.

We’re always shooting in-house content every week. We’re shooting around the office some days or shooting on the street or on locations. Then sometimes we shoot on models with professional photographers. It all ends up going on social media. It’s vital to have strong content these days to show people how to wear and style things and how influencers are wearing them.

Q&A

IRW

The brand is moving into the international space, selling to Greece, Cyprus, parts of Asia and, soon, the US.

Our goal is to build that cult following. We want to become that destination for girls in the Australian market.

18 insideretail.com.au

A $685 million development to add another 43,000sqm to Chadstone Shopping Centre.

Western Australia’s Lakeside Joondalup put a spotlight on International Day of People with Disability on December 3 by launching two display cabinets featuring mannequins of all abilities while showcasing clothing from participating centre retailers.

The cabinets were styled by twin sisters Emily J and Reese Prior through the auspices of the Ability Centre in Coolbinia. They will be on show until December 17.

The Prior sisters, who were both diagnosed with cerebral palsy, are budding stylists, and were thrilled to accept the Ability Centre’s invitation to work with Lakeside Joondalup on the project.

“When I read magazines and catalogues, I don’t often see young girls that represent me or disability, so having a part in changing that is really important to me” said Emily J, the younger twin.

Gemma Hannigan, Lakeside Joondalup centre manager, said the shopping centre was dedicated to promoting real diversity and inclusion in all its forms.

In 2018, it was the first shopping centre in WA to build an accredited changing facility for people with high needs. Following this, it launched height-adjustable tables in the food courts as well as sensory-friendly sessions for children during key events.

Castle Towers has unveiled the first stage of its $180 million, master-planned retail and lifestyle destination, the first chapter in a multi-year transformation.

The Hills District is a key strategic growth corridor for Sydney, with the total trade area spend predicted to increase from $6.4 billion to $12.1 billion over the next 10 years, said the managing director of QIC Global Real Estate, Michael O’Brien.

He said the project has worked together closely with Sydney Metro to deliver the best possible transportation options for the 18 million customers who visit the centre every year.

The project also required considerable co-ordination and co-operation with both the state government and the Hills Shire council to deliver a good connection from the metro and bus interchange to the new retail precinct.

Alongside a revamped Coles supermarket, new brands added to the retail mix include Banana Blossom, Gewürzhaus Herb and Spice Merchant, Délisse French Cafe, Jim’s Malaysian, Makani Ramen Noodle House, Yatai Ozeki, Adanos Grill, Ms Dumpling and Juiced Life.

A collection of new lifestyle stores and innovative concept stores have also opened, including Price Attack, Gro Urban Oasis, What’s Cooking Home, Flower Train, Tribe Lifestyle and Indulge Nails and Spa.

The decor, with its soft pinks, greens and greys of the Australian bush is supported by a series of Melaleuca paperbark forest paintings by Oliver Watts.

There is also considerable integrated landscaping – with more than 2100 plants in total.

Property firm Vicinity Centres has revealed a $685 million development of Melbourne’s Chadstone Shopping Centre – with plans for an expanded luxury retail mall, upgraded fresh food precinct, as well as a larger dining terrace and leisure precinct.

The projects aren’t anticipated to start construction until 2021, and are likely to take around four years to complete. They are also still subject to an approval process by the City of Stonnington, and approval by Chadstone co-owners the Gandel Group.

The developments are to expand the centre by a total of 43,000sqm – with 4300sqm of this dedicated to traditional retail and 1450sqm taken up by new cafes and restaurants.

The expansion will also create 1400 new parking spots across additional levels added to existing car parks, an increase of more than 10 per cent. This will make Chadstone’s parking offer the largest free car park in Australia, according to Chadstone director Fiona Mackenzie.

Inclusion goes mainstream

Castle Towers unveils facelift

Chadstone set for expansion

IRW

PROPERTY

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The Reject Shop finds new CEOSeven months after former chief executive Ross Sudano stepped down, The Reject Shop has announced the appointment of Andre Reich to replace him, effective January 13.

Reich is an experienced retailer with expertise in defining and delivering turnaround and growth outcomes, with more than 25 years of retail experience, The Reject Shop chairman Steven Fisher said.

He most recently served as chief operating officer at Wesfarmers’ Target Australia for three years, and prior to that was general manager of merchandise and marketing at Wesfarmers’ Kmart Australia.

In May, it was announced Sudano would be stepping down after being appointed to the position in 2014, just three months before chairman Bill Stevens departed the business.

The exits came amid store closures and as the discount retailer posted a $16.9 million net loss for the FY19 period – more than 200 per cent below the previous year’s profit of $16.6 million.

Chairman proposed for EndeavourWoolworths Group has named food and beverage industry veteran Peter Hearl as the proposed chairman-elect of Endeavour Group, ahead of a shareholder vote on the proposed restructure on December 16.

Hearl was chairman of Woolworths’ $4.8 billion petrol business, sold in April this year, and has held several executive leadership roles within PepsiCo Restaurants International and Yum Brands.

His appointment will only take effect if shareholders follow the advice of the Woolworths board and back plans for the first stage of the Endeavour Group restructure in the coming weeks, and if the board ultimately decides to demerge the business.

Currently a non-executive director of Telstra and Santos, Hearl was also previously a non-executive director of Treasury Wine Estates and Goodman Fielder.

CBRE director joins JLL teamGlobal property services firm JLL has appointed Nick Willis to the role of director, national retail investments; he will be based in Sydney.

Willis joins JLL from CBRE, where he has spent the past 10 years in the retail sector. He most recently led CBRE’s NSW retail investments business division for four years.

Throughout the past year, Willis has driven more than $400 million worth of transactions, representing major institutional clients and high-net-worth private investors. His recent key transactions have included the sale of Sydney’s Norton Plaza for $153.2 million on behalf of GPT, Moonee Marketplace for Gowings and AMP’s Crossroad Homemaker Centre.

Further recent appointments to the team include Sam Linden, formally from m3property, in the role of senior retail analyst; Hannah Brisbane, formally from CBRE, in the role of retail investments operations manager; and Tracy Tam, who joins JLL from Savills Australia, in the role of senior retail analyst.

TWE chooses independent directorTreasury Wine Estate has appointed former Aristocrat Leisure chief financial officer Toni Korsanos as an independent, non-executive director.

Korsonas will take up the role in April and will also join the company’s audit and risk committee.

Currently an independent, non-executive director of Crown Resorts, Webjet and Ardent Leisure, Korsonas has more than 10 years’ experience in senior leadership roles at some of the giants of fast moving consumer goods, including Goodman Fielder and Kellogg’s.

During her time with Aristocrat, Korsonas led a number of cross-border acquisitions and gained an understanding of the US market and regulatory environment, TWE said.

In late October, TWE chief executive and managing director Michael Clarke announced that he will retire from the position next year to return to the UK and spend more time with family. Clarke will be replaced by the current chief operating officer, Tim Ford.

EDITOR Jo-Anne Hui-Millerjo-anne.h@octomedia.com.au

ONLINE EDITORHeather McIlvaineheather.m@octomedia.com.au

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CONTRIBUTORSJoyce Abaño, Jared Dickson,Norrelle Goldring

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