Digital by design Luxury brand Camilla and Marc has just unveiled its new 'smart store', bridging its physical stores with e-commerce - Inside Retail
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Issue 2280
29 Apr 2020
RRP $14.95
insideretail.com.au
Digital
by design
Luxury brand Camilla and Marc
has just unveiled its new ‘smart
store’, bridging its physical
stores with e-commerce.
In this issue
News Opinion Feature
An open and shut case? A change of heart Finding the silver lining in COVID-19
Some retailers are preparing to re-open Major supermarkets are winning over customers How retailers are taking advantage of new
this week, but is it too soon? p2 during the pandemic – but for how long? p10 consumer demands in the current climate. p12
NEWS
Major retail chains reopen
with caveats
What’s driving the decision-making of some retailers that have
started to reopen stores and others that are waiting for social
distancing restrictions to lift? By Heather McIlvaine
M
ajor retailers have diverged on the topic of reopening Now that stores are beginning to reopen, Agostinelli wants
stores under the Federal Government’s strict social the Government to clearly tell customers they can safely and
distancing requirements, which aren’t expected to be responsibly resume shopping for shoes and other non-essential
lifted until May 11 at the earliest, despite declining numbers of new items.
coronavirus cases in Australia. “We would like a much clearer directive from the Government,
Myer and Premier Investments, owner of Smiggle, Peter Alexander scientists and doctors to advise where it’s safe to shop and how to
and Just Jeans,, have both extended their temporary store closures, do it,” he said. “Everything we’re reading says it is, providing you
which were set to expire last week, until at least May 11, citing the practice social distancing. That’s a very big shift from back in March
Government’s ongoing order for people to stay home except for when we had to close stores.”
essential purposes. Even so, most retail leaders don’t expect foot traffic or sales to
But a number of other companies, including Accent Group, Lovisa recover for several months. And that may be why some retailers
and Brand Collective, are beginning to reopen stores, albeit with are choosing to stay closed, besides their concern for staff and
reduced capacity limits and new customer service processes to customer safety.
remain compliant with the latest health and safety requirements.
Accent Group CEO Daniel Agostinelli told Inside Retail Weekly
that the decision to reopen stores is the result of greater clarity
from the Government around what the new safety requirements
We didn’t understand
actually are.
“When we closed all of our stores, we didn’t have any of those
what social distancing
measures. We didn’t understand what social distancing actually
meant at that stage,” he said.
actually meant.
Accent Group also didn’t have any hand sanitiser in stock or a
way to train staff to conduct shoe fittings while remaining 1.5 metres
apart. The company quickly pivoted to address these shortcomings
after closing stores on March 27, and staff have been trialling the
new procedures in select stores over the past two weeks.
Agostinelli said the goal is for the business to be ready to trade
safely when some of the current social distancing restrictions are Funtastic chairman and ex-Myer boss Bernie Brookes believes
expected to lift on May 11. That includes having hand sanitiser the coronavirus has become a lifeboat for struggling retailers, which
stations in all stores, disposable try-on socks and contactless are using the crisis as a shortcut to restructure their business.
payment at checkouts. He expects these new procedures to remain “Fashion, for example, is in trouble and in most cases it is saving
in place for the foreseeable future. money to close,” he told IRW.
Lovisa also appears to have reopened stores in Australia, Premier Investments has stated publicly that it won’t reopen
according to information provided by a customer service stores unless landlords reduce rents, which retail consultant Peter
representative and store opening hours listed online. IRW asked James Ryan sees as a short-term negotiating tactic.
Lovisa to confirm the details of its reopening but had not received a “Part of being a good retailer is opportunism. But morality is an
reply at the time of publication. important value and there are many who put that in a corporate
Martin Matthews, CEO of Brand Collective, which operates a large values statement but don’t live it,” he told IRW.
portfolio of retail brands, including Superdry and Hush Puppies, told Ryan warned that efforts to prop up poorly structured retailers
IRW he expects to reopen some stores this week at the earliest, but now, via reduced rents, ultimately bankrolled by Government
stores in states where restrictions are tighter, such as Victoria and subsidies and taxpayers’ dollars, will come back to bite the industry
New South Wales, may not reopen until later in May.. in the end.
Even in those states, most retailers were technically never “The higher the compensation burden, the less money the
forced to close. But with people being told to stay home except for community will have to spend at retail anyway, so we are often
essential purposes, many businesses in discretionary categories talking here about extreme opportunism to the benefit of the few
like fashion felt they had no choice but to shut. rather than it being fairly spread,” he warned. IRW
2 insideretail.com.au
NEWS
Camilla and Marc launches
e-commerce transformation
The pandemic may have shut store doors, but behind the scenes,
Camilla and Marc is getting creative and finding new ways to
digitally connect with customers. By Jo-Anne Hui-Miller
A
ustralian designer brand Camilla and Marc has accelerated “It’s a time of reinvention; coronavirus has forced a new way of
its e-commerce plans and launched its new “smart store”, thinking, a new approach to innovation which we are wholeheartedly
featuring virtual styling, same-day delivery, a shoppable embracing,” said Freeman. “The future will be different, and we are
journal and campaign and e-commerce video. planning for that now to ensure we can be flexible in our approach
“The vision for the website was to integrate e-commerce with and adapt quickly to what’s next.”
a hero product strategy and powerful storytelling to optimise the
brand experience and allow our customers to shop seamlessly,” Fashion forward
CEO Marc Freeman told Inside Retail Weekly. “The website also For many retailers, the pandemic has propelled them forward into
delivers unparalleled levels of convenience to our customers from launching digital initiatives.
the comfort of their living room. We also wanted to make sure Sheike’s new e-commerce platform features free shipping, a self-
the standard of personal experience received in-store was help customer service desk and one-on-one styling via Livechat and
mirrored online.” livestreaming. Forever New launched Boomerang a few days ago,
The new Camilla and Marc smart store features “By Appointment”, a new returns service with Couriers Please. Honey Birdette is now
a tool where customers can book a one-on-one virtual styling hosting events with their staff via Zoom, too.
session or a private appointment at their local store once According to digital marketing expert Emma Sharley, right now,
they reopen. brands need to focus on creating both helpful and creative online
Meanwhile, the shoppable journal allows customers to click and initiatives for customers to help them live through the current climate.
buy directly from the brand’s blogposts, integrating convenient “Beyond product and convenience, there has to be connection
e-commerce with inspiring content and imagery. For example, an and meaning across all initiatives, stemming from that brand’s
article on creative director Camilla Freeman-Topper’s working from individual philosophies in response to audience sentiment,”
home tips also showcases her outfits from the latest collection, she advised.
which customers can shop from. “There are opportunities to be had – from new revenue streams,
During the development of the smart store, the business’s long- raising the bar on customer service, finding ways to be closer to
term objective to grow internationally was front of mind, so the team the community, or investing in digital and virtual experiences. By
focused on creating elements like user experience, design and SEO experimenting with live chat, virtual try-on, campaigns or events on
that would suit the needs of both local and overseas customers, Zoom, TikTok, Houseparty, a brand can play a pivotal role as we
explained Freeman. define a new retail reality post-pandemic.” IRW
“Speed was also a large consideration from a user experience
perspective so we adopted a semi-headless commerce approach in The new Camilla and Marc
order to run our campaign imagery faster but maintain quality,” digital experience mirrors what
customers had in-store.
he said.
“An element that can often be overlooked in redesigning customer
experience but incredibly important to maintain and get right before
launch is SEO. We spent a considerable amount on this to ensure
the new site is best-in-breed.”
While physical store staff are no longer on the shopfloor, they
are now using their skills and offering styling advice through
livestreaming and chat, so they are now “back at the heart of a new
retail experience”.
“After closing stores, we looked to quickly train our store staff
across the digital business and set them up to be able to connect to
their VIP [customers] online and support them with their experience,”
said Freeman.
Camilla and Marc was also slated to show at Mercedes-Benz
Fashion Week in May, which was cancelled due to the pandemic.
Instead, the team is looking at new ways to virtually present their
collections and engage their wholesale partners and customers.
3
NEWS
Radio Rentals shuts stores permanently This week’s top 10
Our most read stories from the
Appliance and electronics business Radio Rentals has
past week at insideretail.com.au.
become one of the first major retail casualties of the
COVID-19 crisis, with plans to close its 62 stores as well
as selected warehouses and make approximately 300
casual and full-time staff redundant.
Parent company Thorn Group in an ASX statement
said that the stores would remain closed permanently
and cited the “coronavirus-driven downturn in the
retail sector”.
Radio Rentals, which loans goods to consumers in
return for monthly payments, currently has $123 million
in arrears, which it hopes to recoup over the coming
months, the Sydney Morning Herald reported. 1 “No choice”: Premier extends
store closures to May 11
The business will begin trading purely online in the
2
next three months. Myer relaunching click-and-collect
“I am disappointed that we have been forced to make in anticipation of Mother’s Day
hard decisions regarding our staff and store network, shopping spree
however, they have had to be made to ensure Thorn
Group continues to operate and thrive in the future,”
Thorn Group chief executive Peter Lirantzis said in 3 Shopping centres fight to stay
relevant during lockdown
the statement.
The group has about $40 million cash at bank and
is “pursuing a range of cost-cutting initiatives and 4 PAS Group could shutter
underperforming stores in
recoveries, through which we expect to generate
restructure
increased cash flow over the next year”, Lirantzis said.
5 Myer extends store closures
to May 11
Major retailers lend a hand to Lifeline
6 Radio Rentals shutting stores
permanently as COVID-19 takes
Officeworks, Woolworths and Bunnings are partnering
with non-profit suicide prevention service Lifeline to its toll
help raise funds for the organisation, donating 30
seconds of their corporate advertising to the cause. 7 Kmart converts three stores into
online fulfilment centres
The national campaign, called “The 30 Seconds to
Life”, raises funds for the service and awareness of
the problems it is addressing during these 8 Some major chains reopen stores
with new safety protocols in place
tough times.
Other brands involved include Westpac, Uncle
Toby’s, Vegemite, Old El Paso, Haagen-Dazs, and
Channel 7.
9 Which shops can stay open in
Australia?
Lifeline says it experienced a 25 per cent rise in
phone calls in March, equating to a call every 30
seconds. The organisation expects to respond to over
10 Retailers can collectively bargain
for rent relief: ACCC
one million requests for support this year.
Comment of the week
Due to coronavirus, hundreds of the organisation’s
op shops have been forced to close and other funding
revenue has been reduced so the non-profit needs to
raise funds to fill the gap.
“At the same time as we are seeing our revenue
“The reality is that many brand chains
drop, the pressure on our services is growing,” said
are rapidly disappearing… and the
Lifeline chairman John Brogden in a statement.
emergency measures that help the
“We are experiencing the highest ever calls in our
mum and dad retailers won’t help
57-year history. And the longer the lockdown lasts,
long term.”
the more people will become anxious and lonely.”
Brogden expects the volume of calls to continue
to rise “as the impact of business closures, social Stephen - SCCA says it has urgedXxx
isolation, health concerns and financial stress members to show “empathy.”
continue to take a toll on Australians’ mental health”. IRW
4 insideretail.com.au
NEWS
Around the globe
Fashion index calls for more disclosure wings on the front, and a larger design of a Chinese rice box with bat
wings and the words “No thank you” written on it on the back. “No
Fashion Revolution, the index that ranks the world’s largest fashion
thank you” also appeared on the right sleeve.
brands according to how much they disclose about their social and
After the employee posted the design, in the bio section of
environmental policies, has called for greater transparency and
his personal Instagram account, waves of online condemnation
clearer communication with all stakeholders in the industry.
followed, and he was quickly fired. By a Reuters count, more than
Out of the 200 brands ranked by the index, H&M was deemed
1000 comments were left on Lululemon’s official Instagram account
the most transparent, with a 73 per cent score out of a possible 250
criticising the company for post.
points. It was followed by C&A with 70 per cent and Adidas and
Lululemon apologised to its customers for the post, even making a
Reebok with 69 per cent.
separate statement on Chinese social media platform Weixin.
Going forward, the index called for all fashion brands to practice
The coronavirus is thought to have originated with bats, jumping
a clearer disclosure of suppliers, beginning with the first tier and
from bats to humans in a wet market in Wuhan, China.
continuing down to the raw materials.
It also said that there should be more information published about
brands’ environmental impacts, including the amount of carbon
Bezos rolls up his sleeves
Amazon founder and CEO Jeff Bezos has resumed day-to-day
emissions, water consumption, pollution and waste created, as well
management of the company, turning back to the “here-and-now
as what is being done to address these concerns.
problems” facing the retail giant during global lockdowns, Business
And finally, Fashion Revolution urged brands to answer customer
Insider reports.
questions on social media or email with practical information.
Among the pressing challenges are the disruption of Amazon’s
Singapore fights resurgent virus supply chain by COVID-19 and a backlash from workers at its
warehouses. Workers are seeking better protective equipment, more
As COVID-19 surges back in Singapore, the government has
time to clean and better provisions for sick pay.
extended its “circuit-breaker” legislation for another four weeks and
In recent years, Bezos had outsourced the bulk of everyday
put in place stronger lockdown measures, reducing the number of
decision-making to his deputies, instead focusing on major
businesses that can be seen as essential, Singapore’s CNA
projects such as the development of voice assistant Alexa and the
website reports.
cashierless Amazon Go stores.
Most coffeeshops, snack bars and vending machines will be
Bezos is now said to be holding daily calls about inventory and
closed by the new regulations. Other businesses, such as pet supply
testing, as well as helping make decisions about how Amazon
companies, optical shops and laundries, face more restrictions, the
responds to public criticism. IRW
aim being to keep as many people as possible from having to travel
to work.
Jeff Bezos is now
Supermarkets and “wet markets” remain open. Singapore has dealing with Amazon’s
seen more than 9000 cases of COVID-19, with more than 1100 new day-to-day challenges.
cases reporting on April 21.
Buyer seeks exit from Victoria’s Secret deal
Private equity firm Sycamore Partners is looking to back out of
its deal to take over Victoria’s Secret from L Brands, saying in a
legal filing that L Brands’ decision to close its stores and skip rent
payments violates the terms of the agreement, CNBC reports.
The deal for the US lingerie brand to be taken private was reached
in February, when L Brands ceded a 55 per cent share to Sycamore
for US$525 million. However, this was before the coronavirus
pandemic started hammering the US and global economies and
forcing the closure of thousands of stores.
The terms of the transaction allowed for the possibility of a
pandemic triggering a “material adverse effect” clause, CNBC
reports. These are typically included in deals to allow a buyer an
opportunity to renegotiate should extraordinary events impact
business.
L Brands has declared it will fight this. The suit is filed in the US
state of Delaware.
Lululemon fires worker over ‘bat’ T-shirt
Canadian athletic apparel company Lululemon has fired an art
director for designing a T-shirt deemed racist following a flood of
complaints worldwide, the New York Times reports.
The T-shirt featured a small red image of chopsticks with bat
5
Q&A
From the source:
Justin Gaggino, HiSmile
Oral care might not be known as
an exciting sector, but millennial-
friendly brand HiSmile has
turned that stereotype around
with its ability to connect with
customers and its innovation
in the teeth whitening space.
2IC Justin Gaggino discusses
what it’s like running a digitally
native business in this climate
and how the brand uses data to
its advantage. Interview by Jo-Anne Hui-Miller
IRW: How would you describe the past month for HiSmile? digital assets. As the month or so has progressed, we’ve seen more
JG: It’s definitely been an interesting month. For us, we’re flexible people move towards buying, because we’ve been warming them in
and we have the agility and the ability to move and shape as we our funnel to convert them in this period of time.
see consumer behaviour shift. Because we’re only digital, we don’t At the very start of the pandemic, people were only buying
have the same headaches as bricks-and-mortar businesses. We’re essentials, but now as we’re moving towards this being the status
able to focus on our digital strategies, which is where customers quo, consumers are starting to look for personal luxury. You start to
are now spending all their time. look for things that make the home environment more comfortable
It’s been more of the same of what we’ve always done, but we’ve and things you can enjoy.
been able to double down on certain niche audiences and different For us, we fall into the personal luxury space, we’re an intimate
pockets of different data that allow us to maintain success during part of your beauty and skin or personal care routine. People are
this period. It’s very volatile. Some of our best regions will go well, looking to take care of themselves right now. There’s that idea that
then sometimes based on world events, they will fluctuate. Because we’re going into lockdown looking a certain way, but you’ll come
we’re a digitally native brand and we have that agility, we know out looking much better. That’s a big trend.
where to press and push from a marketing spend perspective and
where to pull back as we see trends move. IRW: How would you say your business has adapted to the
pandemic?
IRW: What are some of the consumer behavioural changes that JG: Funnily enough for us, there isn’t much of an adaption.
you’re seeing right now? Because we’re only digital, this is our bread and butter – we live
JG: Everyone’s at home, so people are more online and on their and breathe this, and if anything, it’s made us further double down
devices with more screen time. It doesn’t mean everyone is more on that notion, and the data part is very important. We’ve always
willing to purchase, it’s just the environment they’re in. utilised data as a big ally to our retention and acquisition and we’re
We’ve noticed more people clicking on our site and visiting digging further into the granular details – how they’ve behaved after
our products. It’s not so much that there’s been an increase of their first purchase and after their second purchase. What products
revenue in certain areas, but more of an interest to explore our lead them to buy other products? What combination leads to them
6 insideretail.com.au
Q&A
becoming a lifetime customer? What cities are we likely to see an
average order value? What demographics within those cities?
A lot of people expect data
IRW: What have you learned about yourself and the business
during coronavirus?
JG: For us, holistically, I’d say that we’re building on our people even
more so than ever. A large majority of our workforce is working from to be a Hail Mary; that’s
home. The co-operation and level of communication have increased,
but I’ve been impressed and realised the importance of positivity
not the way we view data.
of those people. There is such a willingness for our team to pull
together during this time and work together as a unit, even though a
lot of us are working in siloes or remotely. That’s the biggest thing –
the importance of people working in this and then out of this as well.
E-commerce is definitely the next frontier of business and retail highly improved our e-commerce ability. We’ve really increased
and I think people are catching onto it, but for consumers, more conversion rates by 1 or 2 per cent of our stores, to really
people are being pushed into online shopping. Say you’re a 35-year- understand user journeys and understand the customers we should
old who still enjoyed the bricks-and-mortar experience, you’re now be attracting. That’s a credit to us hiring our e-commerce manager,
being forced to go fully digitally native, so the customer pool is who was previously the e-commerce manager at Youfoodz, so she
much larger as well. The opportunity for businesses is much larger is bringing in more experience to us.
because the numbers are increasing. Those are the big wins from the last year. We’re really building
and enhancing our digital experience, especially from a data and
IRW: What’s the past year been like for HiSmile? website front, and then improving and maturing our branding
JG: The past year has been very good. For us, one of the big experience from marketing collateral all the way to our overarching
highlights has been increasing the size of our team, bringing on key brand strategy.
senior leaders or succeeding them to the next stage of HiSmile,
especially bringing on our new head of data and tech. He was IRW: We’ve talked so much as an industry about the importance
previously the CTO of Sportsbet and head of data for Ladbrokes, of data, but I feel like few businesses actually hire someone to
and he brings a wealth of experience. It was a big win for us. oversee that part of things.
Our new head of creative was the creative director for big brands JG: We lead on the gut and we have enough data from a marketing
like Airbnb. In terms of creative, brand and data, we’ve moved and analytics standpoint, but we gave it a good six months to
forward on both sides of the coin. That’s led to us making more develop. The first few months were about building infrastructure and
mature and smarter decisions with how we display our brand from four months after that, we got the granular details of how we can
both a marketing and brand perspective and how we react to our build our data dashboard to get minute-by-minute, week-by-week
data from our customers and potential customers. business and market updates and we can go as micro and macro as
Even though we’ve always been an e-commerce brand, we’ve we want. ►
Since the coronavirus
outbreak, HiSmile has
seen a rise in customers
browsing the products
on the its site.
7
Q&A
We’ve paired that with our performance media and marketing tighten screws and be smart with our decision-making, always being
analytics to supercharge all our acquisition and retention efforts. sure of the moves we make now and how they will look in the next
It’s been key for us but a slow burn. A lot of companies aren’t six months and the butterfly net effect of that.
comfortable with the sunk cost of investing so heavily in data. We
hired our head of data, then we hired a mid-level data analyst as IRW: How would you say HiSmile has made teeth whitening
well and it’s made a big difference now. We’re only starting to see products sexy?
that after six months, when they’ve had enough time to build the JG: We’ve enlisted people like boxer Conor McGregor, model Emily
infrastructure. Ratjowski, the Kardashians and other big influencers to help people
A lot of people expect data to be a Hail Mary; that’s not the way bridge the gap between the function of our products and what it
we view data. Instead, we view it as an analogy. The higher up you should be in terms of self-care.
climb the ladder, the more of the landscape you see, and it’s up to We don’t take the classic dental medical approach to teeth
you when to jump off and dive into the landscape. The thing is, it’s whitening, which has always scared people. People think of being in
not the be all and end all. It acts as a consultant, it’s up to you what a chair at the dentist’s office. Not everyone wants to do that or have
you want to do with that information and how much data you need to the sensitivity or pain that comes with that approach. We’ve tried
take action. to create something that’s very consumer-friendly, with low to no
We need just enough data to move to the next execution point. sensitivity and something you can do from the comfort of your own
home as part of your personal care routine you otherwise wouldn’t
IRW: What other plans have you got for the rest of the year? have had. It’s about fitting it into your routine and how you do
JG: We have a new product in development at the moment – it’s things now.
our next big step. I can’t say what it is, but it’s a big thing for the
company in terms of our next step into the teeth whitening space. IRW: How have things been going for HiSmile in the product
How can we further dominate the market and lead in innovation? innovation space?
That’s a big thing for us for the rest of the year. JG: In the last six months, we brought on a senior scientist,
We’re doubling down on our strengths. This time has allowed us to one of the lead scientists at Griffith University, to really headline
Influencers have played a
significant role in raising
the profile of HiSmile.
8 insideretail.com.au
Q&A
JG: The industry is very much a monopoly. You have the Oral Bs,
the Colgates – brands that have been there for years and years and
instead of releasing new marketing techniques, they have released
There’s that idea that new products to get the marketing buzz. What’s been missing from
the industry has been the ability to develop a personal consumer-
we’re going into lockdown friendly relationship like what Airbnb did for hotels and Uber for
taxis.
looking a certain way, but I hate the word disruption, but the new guys coming in are more
you’ll come out looking
in line with what their customers want and listening to the industry
trends. For us, oral care felt old and stagnated. If you look at
much better.
toothpaste, people buy it as a commodity or to get a result, not
because of the brand. You probably buy Colgate but you don’t
think twice about it. That behaviour is successful because there’s
a monopoly, but it can be dangerous because there’s no emotional
attachment to it. That’s what we’re trying to do – build an emotional
the chemistry aspect of the business. We’ve also brought on a relationship with customers that no other company has.
number of innovation specialists to assist in the science/logistics/
procurement side to improve our supply chain, the way we IRW: Are there any tech trends you’re interested in?
manufacture our products and the quality and efficiency of our JG: Zoom and the way people are approaching face-to-face
processes. contact digitally is an interesting trend. People want to still look
It’s come a long way which will come to fruition in that department good in front of the camera, because they’re trying to elicit these
with the new product launch. We’re trying to become way more digital conversations online. For e-commerce as a whole, because
science- and tech-focused from a product standpoint, so we can competition is getting saturated, you can’t just put up a store and
continue giving people the best product we possibly can. expect to sell well like the old days. You have to be smarter, more
agile and more clever with how you approach your marketing effects
IRW: What would you say the oral care sector is like? and your overall e-commerce push. IRW
HiSmile has recently invested in
boosting its team to focus on its
brand and data.
9
OPINION
How supermarkets are
winning hearts and minds
It could be said that prior to coronavirus, there wasn’t a
lot of love or loyalty for Australia’s major supermarkets.
Now that seems to be changing. By Gary Mortimer
I
t’s no secret that many retailers are struggling right now and are supermarkets are doing more than simply offering discounts and
wondering whether to reopen their bricks-and-mortar stores. specials, they are going over and above to demonstrate they
But given that they are seen as essential, supermarkets are really care.
among the few stores that have remained steadfastly open, quickly In times of uncertainty, customers seek normality, regularity and
adapting to change in the face of toilet paper stockpiling, changing structure. Supermarkets have historically offered habitual, routine
social distancing measures and varying customer needs. shopping experiences that provide this sense of normality and
And it seems that consumer sentiment may be changing – and structure. Shoppers are also growing aware of how supermarkets are
perhaps even brand loyalty is on the rise. demonstrating corporate social responsibility, such as how they are
treating their stakeholders, including vulnerable customers, suppliers
Loyalty as deep as your wallet and staff. Supermarkets are now competing not just for shoppers’
No, that little plastic card in your wallet doesn’t measure loyalty, it dollars, but for their hearts and minds.
simply measures how frequently you visit a supermarket and what
you buy – at best, “behavioural loyalty”. Research firms like Roy Response to restrictions
Morgan regularly illustrate that more than 90 per cent of average As the COVID-19 crisis began to unfold, and panic buying ensued,
grocery buyers will visit at least three different supermarket brands all Australian supermarkets responded. While Woolworths has
every fortnight. Shoppers chase specials, and are willing to sacrifice undoubtedly led the way, Coles, Aldi and IGA are all committed
loyalty points to save on their weekly grocery bill. to supporting their customers during these unprecedented
In contrast, “attitudinal loyalty” is more than just counting times. All have rolled out new procedures, such as rotating staff
transactions. Attitude-based loyalty is a deeply held commitment to every two hours to ensure face-to-face interactions are limited,
consistently repurchasing from a preferred supermarket. Customers asking customers to pack their own bags, having store greeters
with highly developed attitudinal loyalty will ignore other retailers or conspicuously wipe down baskets and trolleys, closing some self-
brands, despite situational influences like location and marketing serve checkouts to provide additional space, increasing tap-and-go
efforts. Attitudinal loyalty can create “brand-stickiness”, “brand limits, and increased reminder signage and prompts across the
love” and encourage positive word-of-mouth advertising and store, including floor decals. These procedures instil confidence
recommendations. So, how does a supermarket build attitudinal in shoppers.
loyalty? With shelves stripped bare of toilet paper, rice and pasta on
Friday, March 13, Woolworths announced it had begun working with
Caring for the customer Meals on Wheels NSW to deliver toilet paper and other essentials
Building strong relationships with customers is essential to the directly to the elderly in the community. Aldi, which has consistently
long-term success of any retail organisation, especially when the maintained relationships with food charities, then donated an
service provided takes place over an extended duration. Customers’ additional $450,000 to OzHarvest and Foodbank, while also
perceptions of the strength and longevity of the connection are partnering with government agencies to coordinate the distribution
critical to building and maintaining strong, durable and mutually of food relief among various states. Coles is also donating extra
beneficial customer-retailer relationships. food and groceries (to the retail value of $1 million a week) to help
In pursuit of strong relationships with their customers, Australians who are facing hardship as a result of coronavirus. All
supermarkets invest substantial financial and non-financial supermarkets then imposed quantity restrictions on most items
resources. Evidence suggests that customers’ perceptions of the to ensure shoppers could access wanted products in a fair and
financial resources alone do not adequately predict their perceptions equitable manner.
of the connection they share with the supermarket. It seems that When concerns about job losses and lost wages began to surface,
a focus on just the supermarket’s economic investments – weekly Woolworths immediately announced it would commit to paying its
specials, collectibles and the like – overlooks the “softer” attributes 55,000 casual workers in accordance with their upcoming two-week
shoppers consider when forming relationships. rosters for any shifts missed if directed to isolate by the Department
Increased competition and low switching costs in the FMCG of Health. For full- and part-time workers, Woolworths committed
sector, combined with decreased differentiation, have led to to topping up leave for a maximum of two weeks if the worker
weak value propositions and positional advantages. Accordingly, has already used up their personal leave. The group announced it
10 insideretail.com.auOPINION
relief and employment opportunities to help retail tenants in its
shopping centres and other retail assets impacted by the pandemic.
Aldi similarly began engaging with dozens of its commercial
Supermarkets have tenants in order to provide rental relief, and Coles has committed to
historically offered
assessing any requests on a case-by-case basis.
On March 31, the payment terms for eligible small suppliers to
habitual, routine shopping
Woolworths were aligned across the entire group (including Goods
Not For Resale, BIG W, Endeavour Group and New Zealand),
experiences that provide
meaning payments to suppliers would not exceed 14 days. Coles
has had similar 14-day time frames for a large part of their small
a sense of normality
suppliers and have been since mid-2017.
In stark contrast, Solomon Lew’s Premier Investments, which
and structure. owns brands such as Smiggle, Peter Alexander and Just Jeans,
notified suppliers it would now impose a 180-day payment term on
all current and future orders.
And this Easter, Coles donated almost 200,000 hot cross buns to
would seek to hire up to 20,000 people across its supermarkets, SecondBite, as well as hot cross buns and Easter eggs to patients
e-commerce, supply chain and drinks businesses, including up to and health workers in children’s hospitals around Australia and
5000 short-term workers from Qantas who had recently been stood included some Easter treats for no added charge into their Coles
down. Similarly, Coles and Aldi also found work for thousands of Community Boxes. Woolworths similarly has decided to donate
new recruits. 20,000 Easter Eggs and 20,000 Easter Bunnies to a handful of
A couple of days later, a small IGA in Altona, Victoria, became hospitals across Australia.
the first supermarket to open an hour earlier, giving seniors and So, while shoppers are often quick to criticise our big
disability card holders exclusive access to the store. A day later, supermarket brands and, in most cases, lack attitudinal loyalty, it’s
Woolworths followed suit; Coles announced their “shopping hour” evident that in a time of crisis, these big organisations step up.
would start on March 18. By the end of the month, Woolworths had While our major supermarkets will continue to compete on range,
expanded its community hour to include emergency services and quality and price, as Australia moves through these unprecedented
healthcare workers. To make it easier to shop, most supermarkets times, it is guaranteed many shoppers are already beginning to form
increased their trading hours. strong bonds and a deeply held commitment to reciprocate after
On March 24, Woolworths moved to install protective plexiglass the COVID-19 crisis passes. This short-term pain will lead to long-
screens at the manned checkouts of each store across Australia. term gain for many of our supermarkets. IRW
Aldi followed suit, and Coles continues to trial screens in selected
supermarkets and liquor stores, with the aim to roll them out to all
supermarkets by the end of April. Gary Mortimer is a professor of marketing at the Queensland
On March 26, Woolworths announced it would be offering rental University of Technology.
Customers have seen how supermarkets
are stepping up to help in the crisis.
Xxx
11FEATURE
The search for consumer
demand during COVID-19
Discretionary retail may be struggling right now, but for some
fashion brands, there are opportunities – if they look in the right
places at the right time. By Phung Yi Jin
P
essimism is evident in today’s retail landscape, as more demand is not gone. Offering constant newness not only ensures an
brands bow to the pressure of coronavirus. Fashion players ongoing cashflow, but also keeps you ahead of the competition.
across all segments not only need to solve supply chain But this poses another problem: What is the consumer demand
disruptions, but they also face the biggest threat to consumerism – now? The answer lies in data.
low demand. According to Omnilytics, newness isn’t disrupted. Compared
Expenditure has decreased significantly, as consumers prioritise with the same period last year, March 2020’s new-in products in the
essential items over clothes, jewellery and shoes. Fashion groups are US saw a spike, as well as an increase in the number of first-time
estimating loss of sales, and retailers are frantically cancelling orders discounted products.
to mitigate risks, leaving brands with mounting stock with no avenue Across fashion homepages, retailers are prioritising apparel
to clear. suitable for remote working, an enforced order by global
But for most crises, there’s a lifecycle. First panic, then governments for social distancing. “Cosy” and “lounge” are common
stabilisation and, finally, recovery. While the US and UK markets are keywords, and the term “stay at home” had more than tripled by
in the midst of the panic stage, their eastern counterparts are seeing March 2020.
green shoots, a cautious sign of recovery. Consumption is on a Modern minimalist brand COS has leveraged on the shift, as it has
steady rise in China, and sales programs in South Korea are up increased its offering of knitwear and sweats by 96 per cent in the
and running. last few months, compared with the same period last year.
For global brands and retailers, it’s crucial to be prepared for On the other hand, some retailers – including Lafayette148 and
every stage of a crisis. Consumer behaviour fluctuates according to Shopbop – are focusing on elevating loungewear, a style that’s both
the cycle, and more importantly, windows of opportunity will emerge comfortable and professional, featuring loose silhouettes and
across all segments. cheeky prints.
The keyword “spring” has seen an uptick as well, an indication
The panic stage: Low consumer demand, but not gone of continued newness, while “autumn” saw a rise among Australian
During this stage, uncertainty is at its highest, and industry leaders brands and retailers such as The Iconic, SurfStitch and Ally.
struggle to understand the complexities of the challenges ahead, The key takeaway here: Don’t hold off on newness. As loungewear
which is why many resort to instinctive reactions, such as cancelling continues to gain popularity and weekend wear becomes the new
orders to preserve cash. However, despite the outbreak, consumer essential, brands should consider incorporating these trends as
12 insideretail.com.auFEATURE
transitional designs in assortment planning. To trade effectively, China, with Prada and Burberry set to participate in Tmall’s new
Amanda Liu, Omnilytics’s associate director, also recommends luxury livestream.
implementing immediate measures to reforecast sales that include
changes to the existing line sheets. Stabilisation
The crisis will eventually stabilise, as it has in China. This is where
Will luxury start discounting? sales will slowly begin to generate revenue once more, as brands
For luxury players, the problem poses a different set of challenges. and retailers respond to consumers’ immediate needs.
Historically, luxury brands do not resort to discounts in order to
protect brand equity. But the market’s reliance on touch-and-feel Study trend shifts
to sell is proving to be disastrous, as coronavirus renders It’s of utmost importance that brands pay attention to trend shifts
this obsolete. in the market. Consumers behave differently at every stage. At the
When coronavirus first struck China, brands like Gucci and stabilisation stage, consumers are much more open to spend on
Moncler quickly rerouted stock to less impacted countries, such as other products, aside from just the essentials.
the EU and the US. But as the virus shifts west, luxury players are However, it’s important for brands to not go overboard – monitor
bracing for impact. With no e-commerce sales channels to turn to, the market closely and shift when necessary.
they’re running out of options. While knitwear and sweaters are uptrending, understanding the
At marketplace retailers – such as Farfetch, Net-a-Porter and key styles is crucial. The bestsellers at ASOS (with the most size
Yoox – strategies for luxury brands differ. Omnilytics data shows restocks) consisted of styles in core colours and basic designs. The
that under global retailers, Dolce and Gabbana, Prada, Stella same pattern emerged when analysing the bestsellers of the same
McCartney, Givenchy and Versace increased first-time discounts in subcategory for COS.
February 2020, while others like Gucci, Saint Laurent, Balenciaga, “Even when consumer confidence returns, the road to full
Fendi and Burberry amped up newness instead. recovery will take time. Keeping a tight assortment is recommended
On the upside, the landscape is starting to see green shoots in during this pivotal shift, and replacing trend-led items with
transitional designs,” says Amelia Teh, Omnilytics’s head of
It’s important that in these business intelligence.
times, fashion retailers The key takeaway here: Focus on expanding cross-seasonal
offer a tight assortment of products, and shave back on trend-led items for the time being.
transitional pieces.
Those that have done their homework at this stage will reap the
benefits in the last stage – recovery – as they’re well-positioned with
the right products for pent-up consumerism.
Wholesale reinvented for luxury
Luxury, on the other hand, will see a new normal in the stabilisation
phase. Wholesale will have a completely new outlook, as everything
moves online to operate.
Virtual showrooms, for example, have been a big hit among
fashion buyers. Fashion showroom and buying agency DFO saw
double the number of Chinese buyers (who would typically fly to
Paris to shop) tune in. Eighty per cent of its sales targets were
achieved, further affirming that buying digitally is not just entirely
possible, but preferable.
Skmmp, a fashion supply chain platform that developed digital
showrooms, has seen a boost in demand, approached by Bottega
Veneta and Tod’s. Luxury brands’ reluctance to adopt technology,
citing the importance of the touch-and-feel, had to be eradicated –
and some buyers are embracing it. After all, with travelling out of the
equation, the scope of their target audience expands tremendously.
Plan according to each stage
Even at the panic stage, there are still pockets of opportunities for
the industry to capitalise on. The key here is to not just to plan well
for the current stage you’re in, but also for the next.
After stabilisation comes recovery, where everything returns
to “normal”. However, brands and retailers will find themselves
in an entirely new retail landscape, powered by digitisation and
innovation. IRW
Phung Yi Jun is the lead content editor at data platform Omnilytics.
Yi Jun built her career as an independent fashion writer. Her
Xxx
previous work can be found in Retail Asia, Harper’s Bazaar
and Female magazines.
13NEWS
People Contact us
EDITOR
Jo-Anne Hui-Miller
jo-anne.h@octomedia.com.au
Managing director Nati Harpaz exits Catch
Nati Harpaz (pictured) is stepping down as managing director of Catch.com.au to start a ONLINE EDITOR
family investment vehicle and startup incubator called Harpaz Group. Heather McIlvaine
The move, announced in a LinkedIn post, comes almost four years after Harpaz joined heather.m@octomedia.com.au
Catch of the Day, a popular daily deals site turning over around $250 million a year from
the sale of end-of-line brand-name goods. JOURNALIST
As CEO of Catch Group, he oversaw the Dean Blake
rebrand to Catch and launch of an online dean.blake@octomedia.com.au
marketplace, which saw the company
roughly double annual revenue by the time CONTRIBUTORS
Wesfarmers acquired it for $230 million in Joyce Abaño, Jared Dickson,
June 2019. Norrelle Goldring
“What we have done in the last four
years is nothing short of amazing and it SUB-EDITOR
is all thanks to the great team that works Margaret MacNabb
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message on LinkedIn.
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Pablo Colombi
Over the last six months, Catch has
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Former Caltex executive to run Oporto
Former Caltex executive Helen Moore (pictured) has been appointed CEO of Craveable
Brands’ Oporto operations, effective May 4, as acting CEO Adrian Pinazza steps down PO Box R217
from the role. Royal Exchange NSW 1225
Karen Bozic, also formerly of Caltex, was appointed Craveable Brands CEO Telephone: (02) 9901 1800
last December.
“I am excited to have someone of Helen’s calibre join our team,” Bozic said, adding SUBSCRIPTIONS
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14 insideretail.com.au2020 Australian
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