Attending the recent Retail NZ shop.kiwi event, I was exposed to lots of leading retailers, who gave engaging and thoughtful insights from a variety of retail verticals. The overall mood of the event was positive about the state of the retail market in this part of the world, offering an encouraging outlook for the future.
There were a lot of takeaways from the speakers, but the top two for me centred around the customer experience, and how it’s necessary to tailor your approach for different customer groups.
Experience is king
Since the GFC there has been an attitudinal shift, and consumers are now placing more value on experiences. This has resulted in more spend being directed towards participating in experiences – where travel, leisure and hospo verticals are doing very well - and the purchase of those products that are used in experiences, such as camping equipment, and sports shoes.
Younger people are at the forefront of driving this shift. This may have something to do with social media as a medium to document experiences and showcase a life well lived.
The takeaway message for retailers was to tie the brand and/or products and services in with an experience. For example, Ice Breaker #livewild campaign, and linking their clothes with adventure and travel. There is also the option of offering a unique experience online or instore, such as Barkers’ beautiful merchandised store in the Auckland CBD, where you can also grab a coffee and have a hair cut.
Australia and NZ are different markets: tailor your approach
One of the highlight presentations of the day was Freedom Australia leading furniture and homewares retailer (and Triquestra customer). Tim Schaafsma, managing director, spoke about the Freedom experience as a trans-tasman retailer and outlined its different approaches for each market.
Whist there are number of similarities, New Zealand and Australia are different markets and this requires trans-tasman retailers to understand differences, and then position their brand accordingly.
Freedom is an aspirational and inspirational brand on both sides of the ditch, however the context of New Zealand and Australian marketplace is very different. Freedom Australia has significantly more competitors in Australia than NZ, and, at the time the research in 2010, only 7% of kiwis earned $100K+, a significantly lower proportion than Australians.
Context determines Freedom’s strategies for each market. For Australia there was the desire for customers to spend more instore, and in NZ the objective was to attract more customers to the stores and grow the customer base.
Freedom Australia focuses on promotion with integrity and has only four sale dates per year, and the rest of the time focuses on ‘Love Coming Home’ brand messaging. Freedom Australia also has a very successful loyalty program ‘My Freedom’, which has helped to grow Australian customer spend.
Freedom New Zealand now also offers the everyday low price model in that they do not run sales, focusing on the fact that its everyday price is the best price.
While Australians and New Zealanders may be geographic neighbours, their shopping habits, preferences and needs differ considerably. For retailers, it’s another reminder to never assume that all customers act in the same way - both within and between country boundaries.
