Australian retailers take on the world
As more international brands make their way down under, Australian designers and retailers are looking further afield to global markets, Jessica Power writes.
Cotton On recently executed its US launch, Specialty Fashion Group (SFG) brand City Chic entered over 100 Macy's stores and youthwear brand Tiger Mist is kicking ecommerce goals.
While each of these brands has found a way to crack the demands of overseas consumers, there's still the question of supply chain management.
As a retailer, how do you manage inventory, volume and speed to market from the other side of the globe?
Cotton On Group global logistics manager James Hubbard maps how the business is tackling aggressive growth.
“The United States is a big focus for us moving forward.
“Currently, 90% of our stores exist in the southern hemisphere where just over 10% of the world’s population lives.
“As a business, we believe the United States is the gateway to the northern hemisphere where 88% of the world’s population resides, and we are firmly focused on growing our operations in the region.
“As part of our growth and expansion plans in the US, we’re looking to open a second distribution centre to better service customers living on the east coast.”
At present, Cotton On Group operates nine distribution centres and with stores under license agreements in the Middle East and South-East Asia, that number jumps to 11.
Distribution centres are spread out across its global network: Australia, New Zealand, Singapore, Malaysia, South Africa, Los Angeles, the UK and Brazil have been secured as hotspots by the company.
Despite having a stronghold on distribution across its network, Hubbard says that executing supply to stores is not without its challenges.
“One of the biggest challenges we face is navigating our way around the different customs protocols that come from operating in such a diverse range of markets.
“Another challenge is ensuring the systems and processes we have developed are easily translatable across our nine distribution centres globally.
“As we’ve entered new markets, and appointed allocation and merchandising specialists into our global hubs, we’ve worked hard to create a culture around the speed we want to achieve.
“So above and beyond developing the right systems and processes, it’s about making them easily trainable across different international markets, to ensure we get the best traction, and fast.”
Hubbard says that streamlining its systems and processes has enabled Cotton On Group to deliver new looks weekly and replenish stock daily.
The same attention to speed has been adopted by Specialty Fashion Group (SFG).
SFG CEO Gary Perlstein says it all comes down examining the DNA of its stockists and forecasting.
“Forecasting demand is a very important part of growth. If you have too little stock, you can miss the opportunity.
“If you have too much, you can kill the opportunity through markdown. Having measured but aggressive order volumes with an outlet for excess stock, and hopefully at cost, is key to launching a successful global business and growing your brand.”
SFG brand City Chic is in the midst of ramping up its retail footprint overseas.
In addition to being stocked in 60 Nordstrom stores and 100 Macy's stores across the US, the plus size retailer has just completed successful product trials in the UK Evans under the Arcadia Group and opened three stores in the United Arab Emirates (UAE) under license.
Perlstein reveals that in order to execute global expansion, logistics solutions have been a top priority for the company.
“Specialty Fashion Group (SFG) has partnered with its freight forwarder to provide a hub solution in South China located close to its sourcing locations. The hub enables efficient and flexible distribution to all global destinations, including, USA, South Africa, UK, New Zealand and UAE.
“In the USA, SFG has two DC locations - one in Grand Rapids for the digital business, and one in Los Angeles for stores.
"The strategy is to focus only on the major retailers as stockists, such as Nordstrom, Macy's and the ArcadiaGroup in the UK. Given the volumes these partners take it is much easier to streamline.”
And in terms of volume, Perlstein says it's vital to understand different demands across global markets.
“The strategy is to focus only on the major retailers as stockists, such as Nordstrom’s, Macy's Bloomingdales and the Arcadia Group in the UK.
“Given the volumes these partners take it is much easier to streamline.”
Youthwear brand Tiger Mist is also on the global expansion trail, penetrating the US and European markets with its steadfast social media presence.
The Melbourne-based etailer and wholesaler boasts 195,000 Facebook likes and 736,000 followers in Instagram.
Its rate of social media engagement has paved the way for international expansion plans.
Although it still operates predominantly from its home in Melbourne, Tiger Mist co-founder Steve Cox reveals it has invested in additional distribution centres in Asia.
“Our main DC is located in Melbourne which is channelled through a warehouse in cross-dock operation in Tullamarine.
All of our B2C ecommerce orders are despatched from this facility so we have better control over both the product and the service. Our B2B distribution is managed through our Hong Kong facility.”
In the year to date, Tiger Mist has seen 60% growth in its business, a feat which Cox believes is aligned with avoiding the pitfalls of international expansion.
“In relation to our distribution within our international wholesale business, the biggest challenge has been understanding and executing the specific compliance requirements for each of our customers.
“We deliver to Forever 21, Nasty Gal and Revolve – to name a few – and each customer has different barcode, packing, dispatch and delivery requirements in which our warehouse facility must comply to.”
Cox says that to avoid making mistakes with distribution partners, Tiger Mist aligned itself with an importing agent in order to facilitate global growth.
“Which has been key in delivering that last mile service to the end customer which we would have struggled to offer from Australia,” she adds.
For Tiger Mist, the US is being considered as a potential hotspot for expansion.
“There are no plans currently, however given our ever-growing popularity in the USA, this would most likely be where we would look to next.
“We would love to offer our customer base in the USA the same express shipping that we do to our customers in Australia.”
Thinking ahead, Hubbard believes that as the retail continues to evolve, so will logistical processes.
“As our business continues to grow and our footprint diversifies into new markets, it is important that we constantly re-evaluate the systems and processes we have in place, and ask ourselves if they are the most effective way of delivering product to our customers.
“A good example of this is the rise of ecommerce. We’re seeing more customers than ever before choosing to shop online and as this space evolves so too does our distribution capabilities.
“We always need to be looking to what’s around the corner, ‘future-proofing’ our systems to keep up with the rise of ecommerce and ever increasing customer demand.”