Australian retail: what the executives think

WGSN and Ragtrader recently partnered on a series of industry roundtables.

In this instalment, WGSN head of market intelligence Lorna Hall, Marcs creative director Nadia Jones, Supre GM Elle Roseby and Target fashion executive Gillian Ridley-Whittle discuss the retail landscape.

Ragtrader editor Assia Benmedjdoub moderates the discussion.

Assia: What are some of the key changes you’ve seen in the Australian market in recent years?

Elle: I think I’ve been pretty privileged to work in the industry for the last 25 years. If I cast my mind back then, it was really about Miss Shop, Portmans, Just Jeans.

That was really the competition.

Back then, it was about getting the latest trend out as quickly as you possibly could. More recently, there’s a lot more competition in the marketplace, there’s certainly more internationals coming in.

We have to be a lot more customer-focussed and that’s really creatively challenging brands, it’s really creatively challenging teams.

I think we’re developing a really customer-centric focus right now about our brands and how we relate to our customers.

It’s not only about your assortment, it’s about your tone of voice, your presentation, your transparency as a brand.

It’s about your social responsibility and ethical integrity as well. Not to even mention the rise and rise of social influencers. What’s really wonderful about that is we’ve got this incredible connection with our customers more than we’ve ever had before.

Assia: So the dynamics have changed?

Elle: It’s no longer about flogging product, it’s about building relationships.

All of that provides incredible data.

We know so much more when we’re on our Instagram channels, we know when to post things, we know when to send EDMs, we know what the click-through rate is supposed to be, we know what the response is going to be.

For me, that builds more and more interest around how we engage with her.

That’s been the biggest shift for me.

The other thing I’m starting to see, and this panel is a great example of it, is just this.

The internationalisation of retail in Australia.

We’re really privileged to have this melting pot of international talent coming into our businesses and I think it makes our businesses bigger and better, it challenges us differently.

It’s lovely to see that mix of international talent and homegrown talent and how cohesively that can work together to grow brands and learn from each other.

What it also does is challenge you about your own team.

It’s not about poaching, it’s about developing your own teams, looking internally and training and developing your own teams. They’re some of the big changes I’ve seen.

Assia: Gillian and Nadia, having both come to Australia from the UK, what do you see taking place locally?

Gillian: I’ve been here for 18 months now and the UK was going under quite a transformation, particularly with the growth of online shopping channels.

I was with Marks & Spencer for 10 years and the three years prior to the time I left, online shopping grew from about 3% of the mix to about 15% of the mix.

That was our flagship shop and actually, you can’t think of your own store as the only channel.

You have to think multilaterally.

Your customer’s expectation is changing, she expects more from you.

I think with international retailers coming here, the value perception is also changing.

Whether that’s quality or style or fashion or service, whether you get your parcel in one or five days, the expectation is changing phenomenally.

I can see how quickly things changed in the UK and I think that rapid change is coming here. I think the online channel will be worth 15% here in two years or three years. It’s a massive shift.

Nadia: Australia has really high online engagement.

I think it’s one of the top five markets for brands such as Asos, which has benefited hugely from it.

I’ve only been here for seven months and the thing that really excites me about Australia at the moment is the world has become very global. Most brands are international and I think the spotlight is really on Australia now.

When I talk to my friend who works at Lane Crawford, Ellery is one of the best performing brands.

I think that’s fantastic.

The way Australian talent is traveling overseas, Yasmin Sewell was recently appointed as fashion director for style.com.

Every time I read about fashion influencers, there’s always Australians in the top ten.

Some of my favourite bloggers are Australian. I am really proud to be here now and be part of that focus.

Assia: Lorna, you’ve been to Australia before. What’s your take on where the market is?  

Lorna: I think some of the big change happened when global brands such as Asos started to hit the market.

There was a bit of a tsunami going on about two to three years ago when you were hit by so many things.

Retailers coming in, online retailers coming in, the [GST threshold] tax scenario, the currency was so strong and everyone was shopping overseas.

I think that kickstarted everyone out of a slumber to look bright, to look their best against everyone else.

The changes I’ve seen since that period, which was pretty grim, have been amazing.

Just every season, I go in and I see how much faster the reaction is. You are totally on point.

The speed at which everyone has done it has been really great. That’s the biggest change from a product point of view.

Gillian: There are very clear differences with this market though.

I have learnt a lot of lessons.

It’s really important that as a retailer, you don’t just go and copy an international retailer and think that’s the right approach.

Developing your own brand and your own integrity, knowing your customer is important.

There are differences in attitudes, buying styles and ways of dressing.

There are also differences in what that value perception is as well. That’s really important that as a brand, you develop your own DNA with confidence and march forward on that.

Assia: What were some of the lessons you learned?

Gillian: There is a sensitivity to pushing prices too far.

In the UK, there is an absolute sensitivity to price, particularly with the Primark factor.

I was really surprised at how savvy and price sensitive customers are out here, much more than in the UK which I thought was fairly aggressive.

Assia: What are some of the other ways retailers are innovating in the market?

Nadia: We’re lucky, we have our own sample room and factory in Shanghai and we’re doing direct live fittings.

That’s really cutting down some of our lead times.

We’re not a fast fashion business, we hold a premium place in the market but we’ve got to be able to respond quicker, especially if things are selling. I think the fastest thing we can do is seven weeks.

Assia: Elle there have been so many changes at Supre. What have been some of the key turnaround strategies?

Elle: I think one of the key elements of the brand’s turnaround is, what Gillian was saying before, being adament around who that customer is.

We know where she is, the channels that she’s on, we know what inspires her, we know what influences her and the language to engage with her.

What that has allowed us to do is build great content.

I think that from a digital point of view, we’ve done a really outstanding job in engaging with her and winning her back into our stores.

The other part to that is just being in that business, for the first 18 months and still today, we are always in those stores.

That’s what drives a lot of our decisions through the business. I think that’s been really important. Trying things, being nimble, learning fast, acting faster.

Assia: Gillian, Target is also looking very different. What has been some of the thinking behind its transformation?

Gillian: When I arrived, we didn’t really know who we were. We had lost sight of our customers, lost our positioning in the market and we were competing at a really discount, high/low pricing level.

Just as Elle mentioned, we had to look at who our customers were and get clarity about her shopping habits.

We were quite bold actually, we were going to take quite a risk and reshape our business.

Based on our customer data, we introduced new brands that talk to different attitudes and customers.

We took some really bold moods.

We have an interesting culture, actually.

We are encouraged to make mistakes and be entrepreneurial, which has been exciting.

I have learnt so many lessons but learning those lessons early on in this womenswear turnaround, has been really helpful.

Assia: What other factors have played a role?

Gillian: The other part of it really, is about building a team which has the knowledge and the strength.

There’s a good blend of experience, from people who have been at Target for many years to bringing in new talent to build that vision together.

We are not at the end of our journey, and we never are, but we now have stabilised the business.

We have a shape and foundation to build that loyalty and bring customers back into the business.

Assia: What were some of the new labels you launched to market?

Gillian: We developed our own, homegrown labels.

So we created brands within our portfolio like Lily Loves, which is a really nice, casual brand and then we’ve gone for a brand at the best end which is called Yours Sincerely.

We’ve also got Dannii Minogue which dresses our petite customer and Belle Curve for our plus-size customer. We are talking to all ages, shapes, attitudes, sizes and diversity.

Assia: It’s inspiring to hear the stories behind these transformations. Lorna, are there global examples of this reinvigoration?

Lorna: We’re about to enter an era where a lot of tech providers will start to turn their focus to the product parts of our business.

They’ve all been about customer experience and now suddenly, they are looking at the design and buying part.

How can we solve some of the issues in this?

The most interesting thing is what will happen in the supply chain.

That’s the next transformational step. We’re all waiting for somebody to crack that.

Some of the big Chinese manufacturing families I know are working and thinking along those lines.

Product development is the next big thing where technology and data will speed up to meet customer demand.