How we became a full omni-channel retailer: Warehouse CEO Mark Powell
- 13 November, 2015 10:00
“We are now a full omni-channel retailer in all our business,” says Mark Powell, CEO of The Warehouse Group.
Powell notes how the retail group has moved from $18 million of online sales when he became CEO five years ago, to the current $150 million.
“Nearly one-third of those online sales are ‘click and collect’. The customers order online and pick their orders in store.
Another 10 per cent go to small stores with a smaller range of products. They order from that store from the whole catalogue and have these delivered to that store, or their home. This ‘endless aisles’ service is available in all the Warehouse stores and links checkouts with the website.
“So it is all about the whole customer journey,” says Powell.
The Warehouse Group includes 92 Warehouse stores, 73 Noel Leeming stores, 65 Warehouse Stationery stores and 10 Torpedo7 stores across New Zealand.
He says the company is innovating across several areas, from online, to digital, to the prepaid phone market.
Last week, for instance, the group launched Warehouse Money, its financial services brand. The brand provides lower cost options for credit cards (which have no establishment or annual fees) and insurance for travel, health car, home and contents insurance. These can be purchased online, via post, the phone and customers will be able to get all the information on these products at any The Warehouse store.
Digital is changing the organisation. But fundamentals don’t change. It is about customers and what they want.
He says digital has also led to huge changes in the business.
It is not only about online sales, he says, the marketing strategy has changed.
“You go back five years ago we used to spend about 5 per cent of our advertising budget on digital marketing. We now spend nearly a quarter of our advertising spend on digital marketing.”
"In the past, we will just do mass marketing...radio, TV, mail and catalogue, traditional marketing," he states.
“EDM, Facebook, Google, search engine optimisation…All that language is coming to the business.”
He says the appointment of a chief digital officer is critical in this new environment.
“The CDO is critical of recognising that change. We need expertise, knowledge, deep subject matter, but also we need [this role] within the business so it goes right across the whole business.”
He says the CDO and CIO are both on the executive team and report directly to him.
But becoming a digital organisation involves the whole business, not just the customer facing side of it.
He says the company, for instance, is moving to Office 365 so people “can collaborate and share more easily”.
“There is still the basic product, price promotion and customer experience, and the basics of people being involved in the business,” he says. “It is about keeping that tension right.
“Digital is critical, it is changing the organisation. But fundamentals don’t change. It is about customers and what they want.”
Sidebar: The competition for shopping dollarsNew research indicates New Zealand retailers will benefit from increased consumer confidence in the lead up to the Christmas trading period. New Zealand holiday shoppers are expected to spend more this year, with a projected increase of 5.2 percent over last year, according to SAS.
SAS surveyed in October 3,458 adult consumers from Australia, Canada, New Zealand, the UK and the US about their holiday buying intentions.
Among Australian consumers surveyed, 79 per cent said they expect to spend the same or more on Christmas this year than in 2014.
New Zealanders are equally bullish with 77 per cent saying they will spend the same or more.
New Zealand holiday shoppers are expected to spend more this year, with a projected increase of 5.2 percent over last year.
SAS says key holiday shopper trends this year include:
- Growth in spending will come mainly from younger shoppers, those between the ages of 18 and 29.
- Discount stores and e-tailers (online retailers) will be the big winners as shoppers focus on price and bargains. “They won’t hesitate to look elsewhere for the specific items they want.”
- Digital continues to change the face of holiday shopping as customers search for gift ideas online, compare prices, and click to buy.
- Seven in 10 shoppers will be clicking to buy online this season, but in-store shopping is still the mainstay (80 percent will shop at brick-and-mortar stores). Mobile will be used by nearly half of the online shoppers, primarily among those under 40.
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