This piece originally appeared in the September print edition of Ragtrader, subscribe to the magazine here.
Data is informing where retailers open, when they open and what they sell. Imogen Bailey reports.
Location, location, location.
In the world of commercial real estate, securing a lease with the strongest ROI has always been an imperative.
But as Superdry Australia and New Zealand brand manager Antony Hampson explains, retailers are more empowered than ever when it comes to site selection.
The brand began rolling out four new stores across Australia and New Zealand in August, backed by an investment of $1.8 million.
The new stores form part of a five to six year plan for Superdry in the region, a plan which Hampson says is about using data to get a clearer picture of its customer.
“We’re still only 50-60% of the way through what is a five to six year plan, we still continue to roll out additional stores and grow our wholesale market.
“We’ve invested quite heavily in software to be able to better reach our customer, better understand our customer, so we’re finding opportunities are coming up,” he says.
To paint the picture of the customer before opening a new store, the Superdry business employs data to comprehensively profile the customers in the area, as well as the location itself, Hampson explains.
“We do a fairly comprehensive geo-demographic profiling of areas and we will understand: A. what the catchment area is. B. Make sure that within that catchment area we’re not going to cannibalise or potentially jeopardise sales in existing locations.
“Then we really need to understand and be comfortable of the size of the prize – the size of the catchment area and particularly our core consumer – and that there’s enough of them for us to be confident that we can drive the volume of sales that’s needed.
“I think that’s very different for a mono-brand store versus a multi-brand retailer because we need to be really really conscious of who it is that’s shopping with us.
“You really need to do you due diligence over and above probably what retailers were doing five to 10 years ago,” Hampson says.
For Australian lingerie retailer Honey Birdette, the expansion into the US is expected to see six stores in the region by February 2020.
The locations for its American stores were informed by the data aggregated from the online sales, Honey Birdette managing director Eloise Monaghan says.
“We watched the online sales, the online sales are incredible.
“We wanted to control the spread so we weren’t bouncing all over the country. We did 23 stores in six months five years ago and we’re not going to do that again.
“Texas is looking very strong for Honey Birdette and Florida, or Miami so that’s the key target for the time being.
“We’re going for A-grade basically so we want to kick it off with A-Grade stores and go from there,” she says.
Honey Birdette’s data also informs the business about purchase patterns between Australian consumers and American consumers, allowing the business to tailor the product offering to particular stores.
“In the US the spend is much greater. There’s definitely a lot of excitement, obviously Honey Birdette has been around for 12 years in Australia, but America’s never seen anything like it.
“Online by far is the bigger market in the US and we’ve been growing the Australian market for 12 years so it’s quite a big market – so it shows you just how quickly the US has taken it up.
“New York and LA – they’re interesting as well because they buy differently in the different areas, [so we’re] following those trends.
“We’re basically saying that the US now online is 15 stores or something along those lines,” Monaghan explains.
Meanwhile, footwear business Ecco is transforming itself in Australia using data.
The brand, which is on a self-described ‘path to premiumisation’ is ramping up its offering to continue appealing to the 45,000-50,000 middle-age females coming through the 32 stores every week, while also attracting a younger consumer.
To do this, the business has utilised its store data to determine how to be most profitable, Ecco head of direct to consumer Jeff Karger explains.
“We now know what the exact square-meterage is actually profitable for us in a standard store, versus an outlet, versus a pop-up location.
“We know that in the past we were taking leases that were between 25-30% too large. It was old-school retailing where, ‘we need a big back room because the more stock that we have, the more that we can sell,’” he says.
However, one of the key changes in Ecco’s transformation has been using data to train and inform not only the retail team, but the entire management infrastructure.
“The shift that we’ve done is having a KPI-based management culture and that’s from a support centre but then also more importantly the store managers that we now have in the store, everyone is completely familiar with the metrics that we chase every single day.
“We can make it really simple. Let’s talk about traffic, let’s talk about conversion, let’s talk about UPT and then average order value and how can we assist you to actually get to that and what impact do you guys have on it and that’s then what’s obviously going to drive sales,” he says.
Similarly to Honey Birdette, the data informs the product selection for Ecco’s stores, Karger says.
“It’s data that’s telling us what the consumer wants, how frequently they’re coming into our stores, it’s traffic numbers to conversion and making sure that that product mix is absolutely perfect to that location.
“So we tier our stores now.
“Instead of one size fits all – we have outlet, we have pops, we have full-priced stores – and even within that we have different tiering within stores.
“Everyone might have the core range, but then these stores might have top tier, more premium products or a wider range in a certain category.
“In previous lifetimes of the business, if we’re 32 stores we would’ve brought the same product for all 32 stores.
“Now it’s about ensuring that it’s the right product, in the right store, at the right time,” he says.
Once the product mix is correct and the store location is profitable it allows the retail team time to tell the story of the brand, an element which enhances the customer journey Karger explains.
“If they’re coming in they’re coming in for a reason, because they already know the price, or they know the brand or they’ve heard something or seen something on social.
“So get that dwell time and increase that by telling them more of the story – it’s storytelling. That’s what retail’s about, storytelling.
“It’s changing the mindset of our consumer as well as our staff. People were coming in expecting a certain price and a discount. If you can now talk to them about the reason why – what you’re actually getting is actually a bargain – 210 pairs of hands touch every single pair of shoes that we sell.
“Understanding that and telling them the story and showing them some visuals of us owning the tanneries and the sustainability of our product, you start to get a much better interaction with the consumer,” he says.
Monaghan agrees that product is key, no matter the data, research or information the business has, the product has to be right.
“At the end of the day you can have the best store and the best people but it’s the product, it’s the experience, it’s the team and it’s the passion,” she says.