Cottoning on to online
With its e-commerce and in-store offerings, Cotton On is looking to create a seamless, integrated retail experience
SA retailers have not had the most fabled experience when setting up shop in Australia. Luckless forays have been made by many, including Pick n Pay (twice), Truworths and Clicks Group.
When its comes to Aussie players giving the SA market a go, only one really stands out: Cotton On Group. Its expansion, however, has been anything but a misadventure.
SA has Cotton On’s largest store fleet (170) outside Australia. The company opened its first store in the country at the West Rand’s Clearwater Mall back in 2011.
In line with growing trends towards e-commerce, the company this year launched an online store through which local consumers can shop across the group’s seven brands: Cotton On, Cotton On Body, Cotton On Kids, Rubi Shoes, Typo, Factorie and Supré.
The Financial Mail interviewed the group’s GM of e-commerce, Brendan Sweeney, and Johan Van Wyk, the retailer’s country manager for SA.
The e-commerce market is still relatively small in SA, so why was it important for Cotton On to launch an online offering now?
BS: It’s not really about taking a silo view focused on the size of one sales channel.
Our business is focused on delivering the best and most convenient omni-channel customer experience.
As a global retailer, we know that more than 60% of customers who buy from us in-store engage with us online before doing so. Online provides an opportunity to showcase our brands and products to our customers when they are researching and looking for inspiration, so it plays an important role in supporting our network of 170 stores, as well as offering new and convenient ways in which customers can purchase the full range of our seven brands.
There was a time when the future of retail was deemed to be online. Now, however, traditional retail, or bricks and mortar, is considered necessary in the overall shopping experience. Why is that?
BS: Today’s consumers are looking for more than just great products. They want the whole package — an integration of both the online and in-store experience to get that great product.
Customers think less about the channel they are interacting with and more about the brand itself and their experience of that brand.
Our focus is on providing the right shopping experience and the highest level of convenience for our customers, and that happens across channels.
The main barriers to online fashion purchases are:
● I want to try the product on or touch and feel it;
● I don’t want to pay for delivery or it’s not convenient as I won’t be home [to accept delivery];
● How do I return it if I don’t like it or it doesn’t fit? and
● How do I get help if I need it?
Integrating across channels and leveraging the assets of a great supply chain and store network give us a real advantage in tackling these challenges. That is why we launched “click & collect” and “store to door” options, and we offer free and easy in-store returns, in addition to the traditional online model of home delivery.
Who is the group’s local logistics partner for e-commerce in SA?
JVW: One of the many advantages we have as a business is that we run our own distribution centres in SA, with all seven brands under one roof. We have also fully integrated our store distribution and online operations.
Our rapid supply chain allows next-day delivery to most of our 170 stores, and we leverage this for our “click & collect” offering, which enables customers to shop the full range and pick up their purchases for free at a convenient store.
For direct delivery to customers, we use DPD Laser Express Logistics, which we partnered with in the UK.
Given that mall culture is quite developed in SA, what kind of targets do you have for online shopping as a percentage of sales?
JVW: Mall culture is equally well developed in the US and UK, where up to 20% of the fashion market is online today.
Clearly SA is at an earlier stage. We see competitors reporting 1%-2% of sales online.
Our aim is to have 5%-10% of our business generated through online sales in the next two to three years.
Does the launch of an e-commerce platform afford the group the opportunity to rationalise space in terms of underperforming stores?
BS: We continually review and optimise our store portfolio in the normal course of business. If anything, the influence of online is more likely to uncover new regions with high demand and lead us to potentially opening new stores.
How much did it cost to build and launch your local online platform?
BS: We take a global approach to our e-commerce business. We had already built a platform that we could easily scale into new countries, so the cost of building a local website for SA was relatively modest.