In this special excerpt from the 2022: The Australian Fashion Forecast report, Mosaic Brands CEO Scott Evans details the process behind the business' expansion overseas.
2022 is already proving to be a big year for Australian retail giant, Mosaic Brands.
Before the close of 2021, the business launched two of its brands, Noni B and Rockmans, into the US market, with the others following soon after.
The expansion of the brands to the US comes after the Group witnessed strong digital sales in FY21, recording a 19% lift in eCommerce sales, which accounted for 19% of total sales.
Mosaic Brands CEO Scott Evans says the reason for taking Noni B and Rockmans to the States first is a less complex reason than one might think.
"In order to facilitate overseas, we had to do a few things to the system and to logistics, so the reason why Rockmans and Noni B were the first two is because we’ve got a new warehouse here in Sydney and they were the first two brands that moved in," he says.
"To facilitate [the expansion] and make it efficient, swift and easy, we needed to be sure that we had the facility to be able to do it.
"We would have actually had everybody live already but the works order during COVID stopped the warehouse from being modified and renovated, which put us back in time," he says.
The launch into international markets is the second step in a two-step plan, which began three years ago with the debut of its online marketplaces – a strategy which has been delivering significant results.
At the end of FY21, Mosaic Brands reported that its marketplaces had taken in $16 million, then raking in $2.1 million during Black Friday week alone.
This is a significant increase on the $500-$600 a week it was making just three years ago at launch.
Evans says the business is taking the same attitude with its international sites, expecting them to not take much to begin with, and then growing significantly as the business learns what works.
"These things are a bit of a slow burn," he explains.
"We’ll get our toe in the water and we’ll get it wrong. That’s the aim.
"But by doing that, we’ll learn really quickly on what is right," he says.
Mosaic isn’t just looking at the US either.
The UK and Canadian markets are on the cards for its nine brands, as well as European countries including Germany and Spain.
Evans says that the business is taking a multi-pronged approach, launching its own sites as well as onto existing marketplaces like Amazon.
"We will put all our brands on all the marketplaces in the US because that’s where we think there’s an opportunity.
"What we aim to do is learn in the UK and the US, ‘what are we getting right? What are we getting wrong?’ And then we expand on that.
"Are we better off in marketplaces?
"Are we better off in a marketplace as well as our own brands – which is what we intend to do.
"Are we then better off acquiring something overseas that already has a database?
"That we don’t know yet, but we’ll figure all that out in the next 12 months.
"One thing we do know is we sell just under 35 million garments a year in Australia to a lady who’s 55 and up, and we can take that overseas because there’s not a lot catered for her there," Evans explains.
This lack of choice for Mosaic’s customers in overseas markets gives the business confidence that it can launch on both existing marketplaces and its own sites without diluting the offer.
Additionally, Evans says Mosaic will work to differentiate its own sites through content and experience.
"If you take Amazon as an example, Amazon is a transactional marketplace.
"You go in there, you type in what you want to buy, and it comes up with it.
"Whereas our own sites will be a lot more emotive; the imagery will be a lot more emotive," he explains.
The international sites will be based on the Australian sites’ look and feel, with a few tweaks here and there, Evans adds.
"The aim is that the northern hemisphere can take our products that we don’t sell when it’s in the middle of summer here and it’s winter over there.
"So when we’re finished with winter here, rather than selling the product down for a low, low price, we can bring it back and put it into the warehouse side for the US. That’s a long-term solution," he says.
Logistically, Mosaic Brands aims to keep the fulfilment side of things as is, with no current plans to open fulfilment and logistics overseas to service the new markets.
"But again, it’s like anything and it depends how big it becomes," Evans says.
"If it ends up being what we want it to be then you might look at that.
"We can deliver from here in a few days into the US so it’s a pretty good delivery pace.
"But we will learn over time what we need to do," he says.
Similarly, the business plans to take the ‘learn and see’ approach to opening physical stores or pop-ups overseas, Evans adds.
"If we learn that that’s something that we need to do then we’ll look at that.
"But as we sit here today, our intention is not to go and have warehouses over there with stock and so on.
"Culture Kings are very successful at it, Showpo are very successful at it, and they’re all based here.
"You know, we don’t need to go and reinvent the wheel," he says.
Additionally, Mosaic won’t need to reinvent the wheel when it comes to building its database in new markets.
The business will be serving some existing customers through its new websites, and will build on this through the marketplaces, as well as channels such as paid search.
"Early indications are the Google Shopping paid search is way better than anything else," Evans says.
"But again, it’s tiny because we’ve only just started on it," he explains.
However, the business expects that once the momentum gets going, it will be able to record strong sales from its new customer bases.
The sheer size of the over 65s population in the US and UK also plays into Mosaic’s hand.
According to IBISWorld, the over 65s population in the UK is approximately 12.7 million, accounting for 18.9% of the total population, while the US Census Bureau reports that there are about 54.1 million over 65s in the US.
"65% of over 65s shop online in the UK, that that was only 54% a year ago," Evans says.
"The size of the population for us overseas is tremendous,” he says.
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