Australian Betail Survey Nov 2019 THE DEC/2019 RETAIL SWAMP THE AUSTRALIAN THE AUSTRALIAN SURVEY BETAIL

1 Australian Betail Survey DecTHE 2019 RETAIL SWAMP THE RETAIL SWAMP THE RETAIL SWAMP THE RETAIL SWAMP THE RETAIL SWAMP THE RETAIL SWAMP THE RETAIL SWAMP THE RETAIL SWAMP

2THE RETAIL SWAMP Australian Betail Survey

Australian Betail Survey Dec 2019 INTRO DUCTION In 2015, Hammond Thinking conducted are a number of Australian-owned brands one of Australia’s largest retail surveys, fighting to usher in a renaissance of belief- concluding that the traditional bricks lead retail. We call them Betailers. and mortar retail industry was on the precipice of a full-blown crisis of What are they doing that’s so different? consumer engagement and, ultimately, What can we learn from them? This study in-store spending. dives into the murk, and sets out the new standard for retail experience and Five years on, Hammond Thinking’s Brand engagement. Agency, 50 Crates revisited the survey and the situation is markedly worse. THE AUSTRALIAN BETAIL But not all hope is lost. In the slowly SURVEY 2019. sinking swamp of traditional retail, there

3 Australian Betail Survey Dec 2019 A SCARY THING HAPPENED ON THE WAY TO THE SHOPS...

ive years ago, we conducted a The survey, conducted over six months The lowlights comprehensive study of retail throughout shopping centres in • 10% of the brands featured in the brands in Australia known as the Melbourne and Sydney, involved more 2015 Retail Brand Survey no longer F‘2015 Retail Brand Survey’. The than 350 visits to over 265 local and exist. findings identified a multitude of threats international retail brands. The aim? To • 10% of surviving brands have negatively impacting the Australian bricks discover who was moving with the times scaled down their bricks and mortar and mortar retail landscape. and who had stood still. In that survey, presence. Apple, The Body Shop, Nespresso and • A mass exodus (selling off) of These included; Lush took top honours, cementing Australian-owned brands to • The impact of unprecedented global themselves as perfect Be Brand retail multinational corporations. brand invasion. experiences (more on that later). • Downturn in consumer confidence. Despite tax cuts and the lowest interest As we approach the five-year anniversary rates on record, Australian consumer • The meteoric rise of online retailers. of the study, we decided to revisit the spending in shopping centres and • Apathy in the part time retail research with a tighter lens on Australian- department stores is the worst it’s been workforce. founded brands. What we found can in almost 30 years.1 Even the once • Rising cost of commercial rent. only be described as depressing. More frenzied Christmas trading season looks • Increases in base labour rates for than ever, consumers are being put off in dire. The slow-boiling frog is almost retail workers. droves by retailers that lack imagination, completely cooked. creativity, clear purpose, a sense of Much like the slow boiling frog, Australian belonging, and powerful storytelling. retail brands seemed unaware that the Pair that with record household debt, heat had been turned up to high and they stagnating wages and job growth, and were slowly being boiled in a soup of their 1 ABC News, (November 4 2019) Retail slumps to ‘weakest’ increasing economic uncertainty, what we own apathy. level since 1990s recession as tax cuts fail to stimulate found was a perfect storm of retail failure. consumer spending. – https://www.abc.net.au/news/2019- 11-04/retail-sales-disappoint-tax-cuts-rba-fail-to-boost- spending/11668912

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Australian Betail Survey Dec 2019

IN DARKNESS, THERE IS HOPE. Retail has a right to feel pessimistic. It’s harder than ever to inspire a sense of devotion to a brand when consumers are lacking in confidence. Earlier in 2019, retail spending stagnated. It’s now going backwards, dropping 0.2 per cent over the past 12 months - the first drop since the recession of 1991.2 No category is safe. From newsagents to global fashion brands to local chicken shops, everyone is feeling it.

But it’s not all doom and gloom. There are retail brands shining bright in these trying times.

These are the ones who have reinvented the retail experience, signalling a clear and strongly-held belief that invites devoted belonging and ultimately drives purchase behaviour. This relationship — which we call the Be Brands approach of Belief / Belonging / Behaviour — is the driving force behind the best retail brands; ‘Betailers’.

These Betailers understand that retail is primarily about theatre, delivered by people who are highly engaged and committed purpose and belief. Selling then is merely a byproduct.

With retail slowly sinking deeper into distress, our mission with this timely RETAIL SALES BY CATEGORY study is clear: identify and celebrate AUUST SEASNALLY AUSTE the best Australian Betailers and gain LTHIN ST S 1.8% practical guidance from them on how to EARTENT STRES 1.2% claw our way out of this retail quagmire.

LIUR 1.2% The fight is not over yet. ELETRIAL S 0.7% HUSEHL S 0.3% RETAIL IS NOT DEAD, YOU 0.3% SUERARET REY 0.1% JUST NEED TO BELIEVE. HARARE BUILIN AREN -0.1% AES RESTAURANTS TAEAAY -0.4% NESAER B -5.5%

Source: Refinity Datastream, ABS, ABC News 2 Ibid

5 Australian Betail Survey Dec 2019 BE BRANDS & BETAILING. BE BRANDS & BETAILING. BE BRANDS & BETAILING. BE BRANDS & BETAILING. WHERE BELIEF MEETS EXPERIENCE BE BRANDS & BETAILING. BE BRANDS & BETAILING. BE BRANDS & BETAILING. BE BRANDS & BETAILING.

6 BE BRANDS & BETAILING. BE BRANDS & BETAILING. BE BRANDS & BETAILING. BE BRANDS & BETAILING. Australian Betail Survey

Australian Betail Survey BE BRANDS & BETAILING.Dec 2019 BE BRANDS & BETAILING.

he Be Brands philosophy was created Over its 16 years, Be Brands has proven to be a in 2003 by brand strategist and cultural powerful blueprint for customer-centric businesses, anthropologist, Simon Hammond, to enable utilising popular culture observations, consumer BE BRANDSTbusinesses to better understand what &they behaviour BETAILING. insights and over 30 years of practical must be for the culture they seek to serve. experience working with top brands to suggest a simple but bold new way for creating great brands The Be Brand philosophy and methodology is of deep emotional resonance. The Be Brands ultimately about articulating the reason why a brand methodology is now taught in select universities and or organisation exists. It adds a potent preface throughout dozens of business around the world. to what you do, and tells an emotive story of why you do it. It ensures a brand is more aligned to the If Be Branding starts with a business’ core belief, then BE BRANDSemotive drivers of its consumers, tapping into their& Betail isBETAILING. where that belief and customer experience most basic fears, frustrations, and desires. inevitably intersect. It’s here that the brand and everything underpinning it, are put on trial by As such, successful Be Brands create an emotive consumers. True Be Brands become a destination, story of what a brand must be for its customers and the best of the best — Apple, The Body Shop, in order to form a deep connection and sense Nespresso, Lush — understand that ultimately, of belonging. Be Brands is not surface level. By what their retail experience needs to be is a potent understanding what your business must be for alchemical mix of attraction through brand theatre. BE BRANDSits customers, you can power sales forces, unite& BETAILING. BE BRANDScultures and focus product development. & BETAILING. BE BRANDS & BETAILING. BE BRANDS & BETAILING.

BE BRANDS & BETAILING.7 BE BRANDS & BETAILING. BE BRANDS & BETAILING. BE BRANDS & BETAILING. Australian Betail Survey Dec 2019 OUR 4 P’S THE FOUR P’S OF BETAIL EACH CONTAIN A SUB-SET OF THREE OF BETAIL. CRITERIA THAT MAKE UP THE WHOLE. POSSIBILITY

BELIEF /10PTS CONSISTENCY /10PTS SEDUCTION /5PTS TOTAL /

All brands on our shortlist had The ability to integrate Seduction is the x-factor to have a semblance of a Belief the Belief into the in-store pulling passerbys into a great or purpose. This measure aims experience and replicate this retail experience, inexplicably to separate those that just over multiple outlets takes drawn to an interesting space talk the talk from those that commitment and a clarity and allured by things they actually walk the walk. How do of message. never knew they needed or 25 POINTS they live it? How well does their wanted. This subconscious belief resonate to potential seduction is a lynchpin of customers? How is it qualified? traditional retail experience that sets it apart from the more deliberate intent of online shopping.

PHYSICALITY

LOOK /10PTS FEEL /10PTS DESTINATION /5PTS TOTAL /

The physical representation of As a measure of overall sensory The presence of purpose is the the brand through the in-store engagement, this measure difference between a place and experience. Is it distinctive or considers intricate design a destination. This measure unique? Ownable? Does it look details and textures, music, looks at how Betailers extend the way the brand feels? lighting, aromas and general the retail experience beyond ambience (playfulness, merely selling their product. 25 anticipation, intimacy, POINTS craftsmanship etc).

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Australian Betail Survey Dec 2019 OUR 4 P’S OF BETAIL. PERFORMANCE

PASSION /10PTS THEATRE /10PTS STORYTELLING /5PTS TOTAL /

The beating heart of a Betailer All stores must utilise retail This comes down to how well is its staff. During the survey, theatre to some degree, but staff can ‘perform’ the brand staff at each store were asked the truly great Betailers go story and communicate the to speak spontaneously about above and beyond to create brand’s belief. We looked for the brand they represent, and a sense of belonging through articulation and consistency. 25 scored based on passion and the in-store experience POINTS trustworthiness. they provide.

PRODUCT

PRESENTATION /10PTS IMPACT /10PTS PRIDE /5PTS TOTAL /

What does the product display Flowing on naturally from This final measure looks at say about the brand and its self Presentation, Impact looks the shareability of a product worth? Is it put on a pedestal? at how product presentation or brand. Great brands create Is it an invitation to play and impacts your perception of proud tribes of consumers who discover? Mass-produced the products and the brand become their most valuable or personal? more holistically. expression of the brand 25 Belief. Their retail outlets then POINTS become temples for these zealots to congregate.

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FILTERS 1. AUSTRALIAN FOUNDED The core of this study - Australian made.

2. TRADITIONAL RETAILER Filters out eateries and other specialty OUR categories. 3. BELIEF LED Retailers without an identifiable belief could not be accurately assessed. 4. TOP LEVEL Limits the shortlist to independent retailers or retailers that act as hero METHOD brands for their umbrella companies. 5. MINIMUM 3 STORES Eliminates boutique retailers and those just starting their retail journeys. OLOGY AWARDS To finalise the shortlist of 50 brands, we ran 300 retailers through 5 elimination criteria. We then measured those 50 brands against our 12 criteria for assessment, ultimately identifying 10 retail beacons and 5 bogged brands. TOP 10

Beyond these 50, there was one other brand we wanted to highlight - the worst of WHO’S RISING ABOVE the worst. TOP 5 WHO’S BOGGED SWAMP MONSTER THE WORST OF THE WORST

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Australian Betail Survey Dec 2019

BETAILERS TOP OF 2019

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Standing inside a Bloch store makes one showing a consistency and commitment feel as though they could peel away the to their Belief. Appointments for pointe merchandise to reveal a fully functional shoes can go for as long as 40 minutes. dance studio. That’s their true strength; At Bloch, “the most comfortable dance living and breathing dance. shoes in the world” is something not to be rushed. Balance beams line floor to ceiling mirrors and hardwood floors creak quietly underfoot as knowledgeable staff flit from BY THE NUMBERS: shelf to rail helping dancers find their DESPITE THEIR NICHE perfect fit. Bloch comes to life with their in-store experience, true principal artists MARKET BLOCH # of retail theatre. MAINTAINS A GLOBAL 10 Bloch thrive in a niche market by making themselves a rite of passage for young PRESENCE, WITH STORES BLOCH dancers, delivering on reputable products IN LONDON, PARIS and personalised service.

Despite having little to no major AND WARSAW. competitors in the bricks and mortar landscape, Bloch continues to strive and innovate rather than rest on their laurels,

PHYSICALITY PERFORMANCE PRODUCT POSSIBILITY Look 6 Passion 8 Presentation 5 Belief 7 TOTAL 70 Feel 7 Theatre 10 Impact 7 Consistency 8 POINTS Destination 2 Storytelling 4 Pride 3 Seduction 3 SCORE

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Australian Betail Survey Dec 2019

Kookai are the only traditional clothing But this strong brand image does come brand to break into the top 10, bucking with a downside. For some, this brand can the trend of apathetic apparel retailers. be alienating, perhaps even hostile. Kookai And it’s certainly not by chance. Kookai knows who they are and are unapologetic is a compelling case study in finding your to those who don’t fit their mould. But for demographic and fostering a community those who do fit, Kookai becomes their go- of belonging. to place for every occasion. Their zealots stand with them through thick and thin, Upon entering one of their stores, offering their loyalty and a sizeable chunk you’re enveloped by floral perfume that of their disposable incomes (Kookai isn’t welcomes you into the world of a Kookai cheap). woman. The interior would not be out of # place in an issue of Real Living - bright, BY THE NUMBERS: 9 open and minimalistic, tied together with soft pink accents and marble textures. IN 2017, KOOKAI The employees - dressed head-to-toe in KOOKAI Kookai clothing, shoes, and accessories AUSTRALIA ACQUIRED - are impeccably presented walking mannequins. THEIR EUROPEAN

Racks of clothing are satisfyingly colour NAMESAKE, FORMING coordinated, podiums of jewelry are strategically scattered, and a phalanx of A FASHION EMPIRE staff stand by, ready to meet any service SPANNING 200 STORES requirement. In this sense, the service level was a stand-out. Shoppers felt as AND THREE CONTINENTS. if they were always looked after as they explored the various nooks of the store.

PHYSICALITY PERFORMANCE PRODUCT POSSIBILITY Look 10 Passion 5 Presentation 9 Belief 4 TOTAL 71 Feel 6 Theatre 7 Impact 9 Consistency 6 POINTS Destination 4 Storytelling 2 Pride 5 Seduction 4 SCORE

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Melbourne’s La Manna and Sons are one supermarket contemporaries, and the of the smaller retailers to make the list. joyous energy of their staff is infectious. It’s With a greengrocer in South Yarra, two this atmosphere that separates LaManna café’s, a delicatessen and a supermarket from the rest. It’s the hustle and bustle of in Essendon Fields, they may be little, but a weekend market in retail form. Brilliant. they’re certainly mighty.

The LaManna brand is all about family and BY THE NUMBERS: community, and their retail expression 2020 WILL SEE LAMANNA exudes these elements in spades. Customers are routinely greeted by & SONS CONTINUE TO smiling staff, not because it’s their job # description, but because of their culture. EXPAND THEIR SOUTH 8 It’s something you rarely see that at YARRA GREENGROCER major supermarket chains like Coles or Woolworths. If you’re lucky, you might WITH AN ADJACENT even spot the titular LaManna and his LAMANNA sons at their South Yarra greengrocer. DELICATESSEN, AS They’re up at the crack of dawn every day to pick fruit and veg and are always happy WELL AS CAFES IN & SONS to have a chat. CREMORNE AND Walking into any of their stores is a MELBOURNE’S NORTH. sensory experience. Their towering fresh food displays go above and beyond their

PHYSICALITY PERFORMANCE PRODUCT POSSIBILITY Look 8 Passion 7 Presentation 7 Belief 8 TOTAL 76 Feel 8 Theatre 6 Impact 7 Consistency 8 POINTS Destination 5 Storytelling 4 Pride 3 Seduction 5 SCORE

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Australian Betail Survey Dec 2019

# BROMLEY & CO. When people7 think about buying art, they think of auctions and art galleries, BY THE NUMBERS: of highly-wound art collectors who judge 2017 SAW THE LAUNCH OF your tastes against their own. Bromley and Co. completely upend this attitude. BROMLEY AND CO’S FIRST Since making the transition from selling PERMANENT DISPLAY one artist’s art (David Bromley), Bromley and Co. has become a curator and retailer OUTSIDE OF VICTORIA - of a multitude of artists. And in doing so, ‘THE BROMLEY ROOM #2’ they’re making art accessible to a market the art world seems to have ignored for IN BRISBANE. many years.

Notably, Bromley and Co. have a strong and recognisable belief. In their staff’s own words, they’re committed to “creating an art gallery for the people.” Almost everything about the retail experience is right: strong message, eclectic store design, and staff that are both knowledgeable and passionate about what they do and where they do it.

For those who aren’t familiar with similar retail spaces, Bromley and Co.’s over the top displays might be more overwhelming than inspiring. But for those who truly belong, there’s charm in the chaos. One could easily spend hours getting lost in the whimsy and splendour of Bromley and Co. stores, which buck the stuffy art- world stereotypes with their low-concept, maximum-impact retail stores.

PHYSICALITY PERFORMANCE PRODUCT POSSIBILITY Look 7 Passion 8 Presentation 6 Belief 9 TOTAL 80 Feel 8 Theatre 7 Impact 7 Consistency 10 POINTS Destination 4 Storytelling 5 Pride 4 Seduction 5 SCORE

15 Australian Betail Survey Dec 2019 #6 R.M.

WILLIAMS R.M. Williams is a brand that cues more than 400 stores in Australia alone, thoughts of leather, the outback, the crack the potential for variation in the customer of a stockman’s whip and Hugh Jackman experience is higher than the smaller in Baz Luhrman’s ‘Australia’. stores on the list and was evident across various locations visited. Customers are greeted by large portraits of the man himself that gaze imperiously On paper, R.M Williams is simply an apparel as they wander through the space. Stylish store, but their powerful storytelling and wood panelling, perfectly polished floors immersive in-store experience sets them and the open plan layout of a designer apart and cements their place as a truly boutique work together to marry the iconic Australian brand. brand’s rugged Australian identity with its premium quality and price point. BY THE NUMBERS: Beyond the space itself, the people and WITH CONTINUED GLOBAL the products truly feel like they belong. After multiple visits the one thing that EXPANSION, EARNINGS consistently stood out was the ability of staff members to recite brand stories and ARE EXPECTED TO TRIPLE anecdotes about almost every product. 3 From their apparel to their iconic boots, BY 2024. R.M. Williams is packed with personality, and the staff clearly love it. 3 Australian Financial Review, (October 10th 2019), RM The only area for improvement identified Williams earnings to more than tripple by 2024, bidders told - https://www.afr.com/street-talk/rm-williams-earnings-to-more- is consistency of service quality. With than-triple-by-2024-bidders-told-20191010-p52zen

PHYSICALITY PERFORMANCE PRODUCT POSSIBILITY Look 7 Passion 10 Presentation 8 Belief 7 TOTAL 81 Feel 10 Theatre 6 Impact 9 Consistency 9 POINTS Destination 4 Storytelling 5 Pride 4 Seduction 2 SCORE

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Australian Betail Survey Dec 2019

HAIGH’S #5CHOCOLATE

Haigh’s Chocolate is ‘Willy-Wonka- who offers a sample of their product, you have a stand-out brand that nails the meets-Sovereign-Hill’ – and the effect is pamphlets for chocolate factory tours retail experience. utterly delightful. are readily available, and the abundance of staff means there’s always someone Much like R.M. Williams, Haigh’s lean to talk you through their large selection BY THE NUMBERS: into their Australian heritage to form their of sweets. IN 2018 HAIGH’S INVESTED brand identity, but a fork in the road comes in the form of retail theatre. It’s hard to say The iconic gold-wrapped chocolate $15M INTO OPENING THE who does physicality better between the frogs adorn the shelves and beautiful two brands, but Haigh’s goes above and handcrafted chocolates taunt you through LARGEST CHOCOLATE beyond when it comes to performance. glass casings. The chocolates are the real stars of the show — and Haigh’s know it. FACTORY IN THE The gold rush era touches are charming 4 and the chocolate itself is quality, but Their store, staff and products are all SOUTHERN HEMISPHERE. where Haigh’s shines is in their ability to top tier, and their ‘family owned’ belief put on a great show and give a memorable and history is compelling. Couple that 4 ABC News, (March 22 2018), Haigh’s Chocolates opens retail experience. Every customer is with their community outreach and new factory, hopes to expand around Australia - https://www.abc.net.au/news/2018-03-22/haighs-chocolate- greeted by a smiling staff member collaboration with Indigenous artists and bucking-the-trend/9576738

PHYSICALITY PERFORMANCE PRODUCT POSSIBILITY Look 8 Passion 10 Presentation 8 Belief 7 TOTAL 82 Feel 8 Theatre 9 Impact 7 Consistency 9 POINTS Destination 5 Storytelling 5 Pride 2 Seduction 4 SCORE

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FANTASTICTHE

These brands nail all 4 P’s, and for that we’re calling them The Fantastic Four of Australian Betail. These top four are FOURalso incredibly close in score, a league above the other six in the top 10.

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DEC 2019

T2 have always been strong on what lies within. Friendly employees are Presentation, a commitment that has always ready to hand out freshly brewed helped them become the dominant tea tea and chat through their various notes purveyor in Australia. But what makes and benefits. It’s one of those spaces you them especially noteworthy is just how just want to pop into every time you’re at knowledgeable and enthusiastic their the shops. staff are.

T2 pioneered the emergence of BY THE NUMBERS: experience-led retail in the 2000’s and in 2017 SAW T2’S FIRST #4 the years since they’ve remained true to themselves and impossibly fresh, defying EXPANSION INTO ASIA all the retail odds. Both tea aficionados and those who never touch the stuff were WITH A NEW STORE IN T2 convinced to buy a box during their visits SINGAPORE. IN 2015 to T2. That’s a remarkable testament to the in-store experience. THERE WERE OVER 70 T2 These guys have the whole package. As STORES WORLDWIDE. BY soon as you walk in the door, the delicious aroma of tea wafts over you while rainbow 2018 THERE WERE JUST walls of perfectly stacked boxes of exotic tea blends invite you to come and discover UNDER 100.

PHYSICALITY PERFORMANCE PRODUCT POSSIBILITY Look 8 Passion 9 Presentation 10 Belief 10 TOTAL Feel 9 Theatre 9 Impact 5 Consistency 8 87 POINTS Destination 4 Storytelling 4 Pride 5 Seduction 6 SCORE

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Aesop imbues every one of their retail Despite being more than 30 years old and stores with the striking architectural having more than 200 stores, Aesop keeps elements, attention to detail and service a humble facade. They know that the quality that you might expect from a world doesn’t need another big company concept or pop-up store. It’s a feat that’s - it needs symbols of change to pave the as impressive as it is unique, and that’s way to a better way of living. why Aesop belongs in the top three. The one element that we found to be Aesop is the whole package as a Betailer, hit-and-miss was the level of knowledge maintaining its consistency across each of exhibited by staff, though they were its stores. What sets it apart is its design friendly and happy to help in every philosophy, which radiates personality instance. Head to head with its closest # and belief. The beautiful simplicity of contemporary T2, Aesop loses out in 3 Aesop stores is striking. The design of Performance and Possibility, but takes each one is tailored to its location through the win when it comes Physicality subtle unique elements, and filled with and Product. perfectly placed jars of lotions and potions AESOP leave you feeling like you’re in some kind BY THE NUMBERS: of ultra-chic apothecary. AESOP ARE CONTINUING It’s clear that every Aesop store puts culture first - and that’s how they create THEIR UNSTOPPABLE such a gripping retail experience. Through the creation of a sensory destination like GROWTH, OPENING 19 NEW no other, Aesop force customers to snap out of their haze and take notice. STORES IN 2018 ALONE.

PHYSICALITY PERFORMANCE PRODUCT POSSIBILITY Look 10 Passion 7 Presentation 10 Belief 8 TOTAL 88 Feel 9 Theatre 8 Impact 10 Consistency 7 POINTS Destination 5 Storytelling 4 Pride 5 Seduction 5 SCORE

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Australian Betail Survey Dec 2019

#2 GEWÜRZHAUS You may not have heard of Gewürzhaus aromatic spices from every corner of the Spice Merchants, but they stand shoulder world, giving you the same feeling as an to shoulder with the best of the best. afternoon spent at your nan’s house — Gewürzhaus customers step off the if your nan had seriously upgraded her streets of Melbourne and into a traditional spice rack. Turkish bazaar, enveloped immediately by colour and culture. Anchored by the Belief Before this year’s retail survey we hadn’t that cooking should come from the home heard of Gewürzhaus, but they’re one of and the heart, Gewürzhaus delivers a truly our favourite discoveries. They don’t have immersive retail experience. many stores yet, but they’ve been growing quickly since their 2010 launch. Keep Customers are invited to scoop and bag your eye on these guys — your pantry and their own spices. It’s a practice that’s your tastebuds will thank you. not only fun, but is driven by the belief that cooking is an important and intimate experience, best improved by getting to BY THE NUMBERS: know and smell your spices before using GEWÜRZHAUS ARE A them. RISING STAR WITH 3 NEW As you’d expect from second spot, Gewürzhaus Spice Merchant dominates STORES OPENING ACROSS across all 4 P’s, with especially strong showings in the Performance, Product MELBOURNE IN THE LAST and Physicality sections, all due to their 4 YEARS, WHILE ALSO well executed and refreshingly unique stores. EXPANDING INTO SYDNEY

Each store is warm and homely; tea is AND CANBERRA. always brewing, and the quiet environment is a welcome change from the loud pop music that blares from many other retailers. The walls are chock-a-block with

PHYSICAL PERFORMANCE PRODUCT POSSIBILITY Look 9 Passion 10 Presentation 9 Belief 7 TOTAL 91 Feel 10 Theatre 10 Impact 8 Consistency 9 POINTS Destination 5 Storytelling 5 Pride 3 Seduction 6 SCORE

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AND THE WINNER IS… DEUS EX MACHINA#1

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Australian Betail Survey Dec 2019

Try as we might, we simply can’t fault Deus Ex Machina on their retail experience.

At its simplest, Deus is an apparel company. But as a lifestyle brand that celebrates the speed, craftsmanship and excitement of motorcycle culture, it’s simply unparalleled. The amazing thing about Deus is that each of their stores possess a distinct identity anchored by place, yet maintain a consistency that allows them to form a global tribe of brand zealots.

Scattered around the world, each flagship is a temple of worship to the motorbike culture that Deus seeks to serve. Polished concrete floors and industrial elements create spaces that feel more like motorcycle garages than retail spaces. Surfboards and Deus apparel fill the room, complemented by photography toe in personality. The staff and customers Deus is this year’s ultimate Betailer and street-style illustrations of muscle look like they could easily be friends who because it embodies all Four P’s. Their cars and motorbikes that adorn the walls. have come to hang out, both equally Possibility score completely outshines Where the concrete gives way to wood invested in Deus tribalism. Their sense of all other retailers in our study, while their you’ll find more clothes and in some belonging and Deus’ consistency back up Physicality score sits at the top with the instances, a signature Deus café where the behaviour of the community who live likes of Aesop. It’s clear that the Deus staff customers spend hours just enjoying and die by the Deus creed. love their jobs and regularly score highly # the atmosphere. in Performance, while their Products are 1 Deus believes there’s no ‘right way’ to do coveted by Deus fans all over the world. Each flagship stores adds unique individualism, and lets the world know elements that speak to their location that all are welcome under their roof. With If you’re looking for an example of retail and history, but the rustic feel and biker this belief flowing to their very core, every done right, look no further than Deus Ex heart are consistent. The Harajuku store Deus shop/experience tells you all you Machina. is mystical, the Canggu store is spiritual, need to know about their brand without the LA store is oh-so LA — but every store ever really saying a word. remains Deus at heart. BY THE NUMBERS: In addition to the Camperdown flagship, BACK IN MAY DEUS Originally founded in Australia, Deus now Deus also has smaller retail locations in has more stores worldwide than back Penrith, Manly, Byron Bay and Warringah UNVEILED PLANS FOR at home, but it’s the Camperdown store Mall. Even without large warehouse in Sydney that captures the heart of spaces and in-store cafes to support A SECOND AUSTRALIAN Australian Deus-heads. The Camperdown them, each of these stores still manages flagship is everything a retailer aspires to to embody the spirit and heart of one of FLAGSHIP IN be; a place of pilgrimage doused head to the flagships. FREMANTLE, WA.

PHYSICALITY PERFORMANCE PRODUCT POSSIBILITY Look 10 Passion 9 Presentation 7 Belief 10 TOTAL 95 Feel 10 Theatre 8 Impact 10 Consistency 10 POINTS Destination 5 Storytelling 5 Pride 6 Seduction 5 SCORE

23 Australian Betail Survey Dec 2019 BOGGED BRANDS

OUR TOP TEN HAS MANY RETAIL TRIUMPHS, BUT LYING JUST OUT OF OUR TOP TEN ARE SEVERAL BRANDS WHO DIDN’T QUITE MAKE THE CUT.

For one reason or another each of these five brands fall by the wayside. Some narrowly miss their mark and others dramatically misfire. Here’s a handful of brands that show huge potential, but stumbled at the finish line.

CRUMPLER In years gone by, Crumpler has been It seems to us that Crumpler hasn’t a consistently powerful retailer with kept theirs. Soulless industrial stores a belief focused on finding your and a shiny new mascot (brutally own way. It was strong and simple killing off the old iconic dreadlocks) and always landed them a place as both work wonders to sterilise a once one of Australia’s leading retailers. vibrant brand. When asked what Unfortunately, a disastrous rebrand Crumpler was about, staff could only has knocked Crumpler from top tier to offer their thoughts on what Crumpler bottom rung. used to be while sheepishly admitting that they’re no longer sure. This was Don’t get us wrong, change isn’t consistent in every store we visited. always a bad thing. Quite the contrary. Boost, NAB, Woolworths and many Staff who are confused about the more have successfully undertaken identity of the brand they sell is a far rebranding measures in an effort to cry from the effortlessly personable keep up with the tides of times while Crumpler of the past. Unless drastic maintaining their core brand identity. measures are taken, it could soon be too late to turn back.

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BAILEY NELSON After a strong performance in the 2015 displays for a variety of glasses, textured This lack of consistency throughout Retail Brand Survey, we expected Bailey floors and thematic eye-test decorations their retail experience allowed a few Nelson to turn out a similarly impressive make for an optical experience that’s disappointing stores to dim the light of a score in the 2019 survey. Unfortunately, more chic than you might expect. Back once great brand, earning Bailey Nelson a this was far from the case. in 2015 this aesthetic environment was spot in 2019’s Bogged Brands. enriched by brilliant staff and a powerful Back in 2015, Bailey Nelson was a belief that was outwardly evident. Bondi Beach upstart with only a few flagship stores. In the years since, they’ve So, where did they go wrong? amassed more than 40 stores across Australia as well as locations in London, Some stores are so far removed from the Canada and New Zealand. We’re sad to presentation of the flagships that one say their quality and attention to detail could be forgiven for wondering if they has not kept up with this massive scaling had mistakenly wandered into OPSM of their retail presence. rather than Bailey Nelson. Customer service was virtually non-existent, bare Those who have visited a flagship Bailey shelves begged to be restocked, and staff Nelson store know that their spaces offered customers little more than an are a pleasure to be in, something unapologetic ‘take it or leave it’ attitude. other eyewear retailers should aspire to. Beautiful wood paneling, shrine-like

LORNA JANE JURLIQUE KOKO BLACK Lorna Jane perform well in a number Jurlique have the Presentation, they Much like Jurlique, Koko Black sport of areas. They have an avidly loyal have the Possibility, and they have the full package in all but one spot, following, a great belief, and a strong the Product. What they don’t have but this time it’s their possibility that’s brand presence in the retail landscape. is the Performance. Compared to a lacking. Koko Black lean too heavily on But unfortunately Lorna Jane hasn’t contemporary like Aesop, the cracks their premium positioning. Yes, they quite nailed the physicality of retail. in Jurlique’s facade become obvious. have good performance, but their core Instead of taking cues from some What’s needed here is more theatre and beliefs and their x-factor is lacking. You of our best experience-led retailers, more passion. know what you’re going to get when Lorna Jane still gives the experience of you visit Koko Black, but a belief-driven a traditional clothing retailer, offering experience isn’t part of the offering. little more than a crisp white visade with industrial touches in most of their stores. A little extra effort could turn this into a destination that invites you to spend a little extra time discovering the brand beyond the racks.

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AS WE COMPLETED THE FIELDWORK FOR THIS STUDY, SEVERAL DAMNING TRENDS EMERGED AMONG OUR SHORTLISTED BRANDS. WE SAW RETAILERS MAKING THE SAME MISTAKES TIME AND TIME AGAIN ACROSS EVERY CATEGORY OF ASSESSMENT. AND SO, THE SEVEN DEADLY SINS OF RETAIL WERE BORN. 1 2 3 APATHY NONDESCRIPT INSECURITY

The strength of bricks and The white bread of the retail If you don’t know who you mortar retail over online world. Brands that exhibit are - how can the consumer shopping is personal this sin have a tendency guess? This sin manifests interaction. So, when to make you wonder if itself in a number of different the exchange provided they ever even talked to a ways. When a retailer’s is more painful than no designer or merchandiser. self image changes with interaction whatsoever, There are two camps that the tides and no sane something is very wrong. sinners tend to fall into: the person could be expected When an employer is more ABC stores of old (may they to keep track of their ever concerned about what rest in peace) and brands changing positioning, that’s goes in the till than what like OPSM - painfully dour insecurity. The easiest and they’re contributing to and unimaginative. The fastest way to spot this the world, they become a other camp is where JB sin is near constant sales wellspring of indifference. Hi-Fi lives. There’s clearly and promotions. Ultimately this infects the an atmosphere of some staff who act as the face kind, but the outlet style of the brand, and what layout forces customers the world sees is apathy. to play product hide- When your staff don’t and-seek, a practice care about the experience which is exhausting and they’re providing, why off putting, especially should your customers those who are new to the care to endure it? product categories. THE SEVEN DEADLY SINS OF RETAIL

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Australian Betail Survey Dec 2019

COMMIT ONE OF THESE SINS AND YOU’LL FIND YOURSELF IN RETAIL PURGATORY 4 5 6 7 DECEPTION (MERCHANDISE) TUNNEL GREED MANIA VISION

All retailers use psychology Merchandising is the art Price is an important Greed is a strong word, to influence customers, of product layout and and unavoidable part of but what else do you say but some cross the line as a retail concept it fits retail. But where can you about retailers who actively into dangerous territory directly into our P of the get focusing on a price- engage in predatory of deception. No matter same name. When done led retail experience and behaviour to improve their how small or large the well it can explain the nothing else? Not on our bottom line? Only the worst deception, when a brand in one glance while list. We’ve talked at length of the worst showcase customer is put out once, leading customers with on the folly of belief- this sin, and we can think they likely won’t forget it. visual cues. But when done deprived retailers, and this of only one truly greedy This sin rears its ugly head poorly, merchandising can sin is an extension of that. example. Read on to find when an item that appears confuse and disorient. The ‘look-how-cheap-we- out which retailer is in need fully stocked on the If your eyes have ever are’ sales point works for of repentance. shelves is in reality, sold been visually assaulted some, but you’ll be edged out. This can also extend to in a store, or you’ve ever out by the competition overpricing and behaviour wondered “Why the hell do eventually. designed to make money they even sell this?!”, well off the ignorant. that’s merchandise mania.

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“STOCKS FELL TO THE “EB GAMES HALT DIVIDENDS “NET INCOME IS A MERE 24% LOWEST POINT IN 16 YEARS” DUE TO DECLINE IN SALES” OF THE YEAR BEFORE” THE – https://www.channelnews.com.au/eb-games-owner-suffers-major-revenue-loss/ SWAMP MONSTER It begins as soon as you walk in the door. strength that only seeks to increase their WE’VE FINALLY COME Customers are greeted with apathy and desirability. TO THE SOURCE OF THIS poor customer service, cluttered displays that seem purposefully confusing, items And we still haven’t talked about the worst RETAIL STINK. on shelves with no indication of actual part of EB’s retail experience - customer product availability and an overwhelming membership. EB retailers practice Who are the ones dragging down feeling of discount desperation. predatory behaviour when it comes to Australian retail and drowning out trade-ins and EB World memberships. experience-led retail with their Infuriatingly, products you’re looking characterless oversaturation? for are always “in another store,” while EB offers discounts or gift cards in order things that no-one would want and to severely under-pay for trade-ins and From the much-maligned Telstra, to the don’t appear to belong are available make a huge profit off of pre-owned very vanilla Myers and David Jones, there in abundance. Pop-culture figurines, sales (it’s actually where a large portion are many ‘Swamp Monsters’ populating miscellaneous merchandise, and several of profit comes from). These programs this bog, but the worst of the worst has got editions of Monopoly litter shelves that are lead to thousands of customers making to be... somehow simultaneously cluttered and pocket change while EB resells for a huge understocked. There’s no consistency markup. Why? Because their customers in the way product is displayed, or even don’t know any better, and they’re only EB GAMES between the stores themselves. too happy to take advantage. It might be rough to call out one Perhaps EB’s most blatant offence is The best we can say for EB Games is retailer above all others, but EB Games the never-ending sale banners that they’re consistent at being a poor example exemplifies all seven of our retail sins. plaster every surface and hang down to of the retail experience. So, to set Australian retail back on course obstruct vision and movement. Over the once again, an example must be made. Retailers take note. As long as you’re last decade these banners have become doing the opposite of everything EB the identifying feature of an EB Games If you’ve never shopped at EB Games, Games do, you’re doing ok. well, you’re one of the lucky ones. Physical store. Constant discounts are a sign of media is slowly dying, and as a purveyor desperation, and overpromotion makes it video games, EB Games is top of the list all the more off putting. Brands with strong of endangered retailers. Yet much like identities rarely offer discounts, and in drowning in quicksand, the more EB has the case of premium brands like Apple, struggled, the quicker it’s sunk. maintaining their price point is a sign of

PHYSICALITY PERFORMANCE PRODUCT POSSIBILITY Look 0 Passion 0 Presentation 1 Belief 0 TOTAL 6 Feel 1 Theatre 0 Impact 0 Consistency 0 POINTS Destination 2 Storytelling 1 Pride 0 Seduction 1 SCORE

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POSSIBILITY PHYSICALITY PERFORMANCE PRODUCT Australian Betail Survey THE Dec 2019

FINAL 50 Belief Consistency Seduction Look Feel Destination Passion Theatre Storytelling Presentation Impact Pride Total Aesop 8 7 5 10 9 5 7 8 4 10 10 5 88 Alice Mccall 3 3 1 7 2 2 2 3 1 8 10 5 47 Bailey Nelson 9 6 4 8 5 3 4 5 3 6 7 4 64 Betts 7 6 3 5 3 1 4 6 4 7 8 3 57

– https://www.channelnews.com.au/eb-games-owner-suffers-major-revenue-loss/ Black Hearts and Sparrow 7 7 4 7 7 3 6 5 3 7 7 3 66 Bloch 7 8 3 6 7 2 8 10 4 5 7 3 70 Bonds 6 4 2 3 5 2 5 5 2 4 4 2 44 Bromley and Co 9 10 5 7 8 4 8 7 5 6 6 3 78 Bunnings 3 7 5 6 9 5 7 9 2 4 3 1 61 Camilla 6 5 4 8 6 3 6 7 3 7 6 2 63 Cotton On 8 3 3 5 3 2 3 3 2 2 2 1 37 Country Road 2 5 3 5 4 3 4 2 3 5 5 2 43 Crumpler 6 6 2 4 4 3 3 3 3 5 8 4 51 Cue 2 3 2 3 4 2 3 2 2 5 6 2 36 David Lawrence 6 5 2 3 3 1 3 2 1 6 8 3 43 Declic 5 7 4 8 6 2 4 6 2 7 7 3 61 Deus Ex Machina 10 10 5 10 10 5 9 8 5 7 10 6 95 Dusk 2 5 4 7 8 4 6 7 3 7 7 3 63 Gorman 4 4 4 4 6 2 7 4 3 3 4 4 49 Haigh’s Chocolate 6 9 4 9 8 5 10 9 5 8 7 2 82 Jeanswest 3 3 2 6 4 1 4 3 4 5 5 1 41 Jurlique 6 7 3 9 8 3 6 7 2 6 7 3 67 Koko Black 5 5 2 9 7 3 6 8 4 9 9 2 69 Kookai 4 6 4 10 6 4 5 7 2 9 9 5 71 La Manna and Sons 8 8 5 8 8 5 7 6 4 7 7 3 76 Lorna Jane 9 10 3 3 3 3 9 6 5 3 4 4 62 M.J. Bale 8 8 4 7 5 2 6 4 4 7 8 3 66 Matchbox 6 7 3 3 3 2 6 2 1 5 5 2 45 Mecca 5 3 5 6 4 4 4 10 3 10 5 3 62 My Size 4 3 1 2 4 1 7 4 5 4 4 1 40 National Tiles 7 5 3 6 5 2 8 6 4 8 5 1 60 Petbarn 7 4 2 2 5 1 8 7 4 4 3 1 48 Peter Alexander 4 5 5 3 7 4 3 4 2 6 8 5 56 Platypus Shoes 5 5 3 6 6 2 2 5 1 6 4 1 46 Priceline 6 6 2 3 3 1 6 3 2 2 3 2 39 Ripcurl 6 7 3 6 7 2 4 6 4 6 4 4 59 RM Williams 7 9 2 7 10 4 10 6 5 8 9 4 81 Sass and Bide 6 5 3 7 4 3 2 3 2 8 8 3 54 Seafolly 8 8 4 5 6 2 7 2 4 6 6 3 61 Seed 5 5 2 4 4 1 5 4 3 7 6 4 50 Sheridan 6 5 4 5 7 3 7 7 4 6 7 2 63 Skin and Thread 2 6 2 7 3 1 7 5 4 7 5 2 51 Gewürzhaus 7 9 6 9 10 5 10 10 5 9 8 3 91 Sportsgirl 2 2 1 4 3 1 2 2 1 3 2 1 24 T2 10 8 6 8 9 4 9 9 4 10 5 5 87 Teds Cameras 3 4 2 1 5 2 7 4 1 3 4 3 39 Terry White 8 2 1 2 2 1 6 4 1 2 3 1 33 Tigerlily 2 5 3 5 7 2 5 5 2 4 6 3 49 Yd. 5 7 3 6 3 2 6 2 2 7 7 2 52 Zimmerman 4 6 2 8 3 3 4 3 2 8 9 3 55 29 Australian Betail Survey Dec 2019

THE WAY OUT OF AUSTRALIA’S RETAIL SWAMP IS CLEAR. BRANDS MUST LEARN FROM THE BEST WHILE AVOIDING THE PITFALLS EXHIBITED BY THE WORST. IF AUSTRALIA’S RETAIL LANDSCAPE IS TO REMAIN ABOVE MURKY WATERS, CHANGE IS NEEDED.

So, to all the retailers out there: use this study as a low hanging vine. Pull yourself out of this swamp and blow away that miasma that’s been plaguing retail for so long. Change comes from within, and as we’ve seen, there are plenty of retailers showing the way forward.

But there are some other ominous clouds on the horizon that cannot be ignored. Australian founded no longer means Australian owned - even in our own top 10, nearly half have sold to international retail groups in the past five years. What this means for our retail landscape, we can’t say, but if our experience with umbrella corporations tells us anything, bricks and mortar may suffer. Either way, you can count on us to check in soon for retail’s annual health check.

THE BETAIL SURVEY WILL RETURN IN 2020...

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Australian Betail Survey Dec 2019

ABOUT 50 CRATES

50 Crates is a creative brand agency with presence in Melbourne, Sydney, Shanghai and New York. Founded by industry veteran, creative visionary and cultural anthropologist Simon Hammond, 50 Crates exists to reconnect brands and business leaders with the cultures and customers they seek to serve. With a guiding belief that creativity can inspire new ways of thinking, and ultimately change the world.

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