The head of New Zealand’s largest hardware DIY chain has revealed the single most popular product sold during this alert level lockdown.
When you find out, you’ll probably go “oh, yeah, of course”.
Andrea Scown, Mitre 10 chief executive, addressed the national Retail Conference being held online today.
After her talk with the snappy title of “building resilience through transformation”, attendees sent in many questions, one from a conference-goer who wanted to know what locked-down kiwis demanded or needed the most.
Was it facemasks? DIY tools? BBQs? Maybe bike repair kits?
No. Scown was clear: those green-fingered Kiwis were the dominant customer segment and they really wanted just one thing, she said.
“Potting mix. Growing media has been huge.”
New Zealanders unable to travel more than 5km from their homes except for essential work or for food or petrol or health needs thought about growing things.
When we were so confined, come August and spring’s pending arrival with warmer weather, thousands of us thought about little else other than plants – lush green ones providing us with vegetables, flowers or fruit.
Plants dominated our consciousness.
But it wasn’t just potting mix we needed.
Scown named other most-popular products: “Outdoor furniture, SodaStream, cleaning products….everyone’s been working on their nest.
“Everything across the board – paint. But garden has been really big. It’s been really across lots of departments…anything that can be bought online and we’ve got over 60,000 products that can be bought online.”
She also told the conference how Mitre 10 New Zealand plans 11 new stores including a new Silverdale Mitre 10 MEGA store which would have sustainability features designed into the building.
“We’re currently looking at 11 new stores over the next few years, not including trade stores or offsite storage. A couple of Hammer Hardwares are growing up into Mitre 10s. We’re also looking at a new urban solution in Auckland.”
Asked if Mitre 10 would be a sub-tenant of a larger building, Scown said it “liked big car parks and drive-throughs” and indicated that option being asked about was unlikely.
The business is struggling to keep products on shelves. More than 8 per cent of its stock is not on shop shelves currently due to supply chain disruption, Scown said.
The business, founded in 1974, has been hit by website outages recently and Scown acknowledged that.
The co-operative had several multi-generational businesses, “many family-owned and operated and the entrepreneurial spirit runs through them all”.
It put an emphasis on local suppliers and labour and was now New Zealand’s largest garden centre. The first significant transformation was the first Mitre 10 megastore was in 2004.
The trade business had transformed the co-op, representing 40 per cent of total turnover “and more so in some regions”. The business has 41 Mitre 10 stores and 43 Mitre 10 MEGA stores, with a support office in Albany.”
Some Hammer Hardwares had converted into Mitre 10 stores.
The national business employs 7000 staff “and we are growing rapidly”.
The digital transformation began in 2016 with the business going online with an Omni-channel launch then.
“We’re looking for land,” she said of centralised distribution opportunity plans.
“The emergency of the pandemic was a wake-up call for us. It’s changed areas of our business but underlined the fact that our strategy is right with digital and supply chain transformation, the evolution of our store footprint. Those are all going to be essential to meet the growth transition of Mitre 10.
“We’re replacing legacy systems and modernising technology. It’s a big deal for us. The real focus is on the team member experience and what it’s like to use technology. This will change the world of our team. It’s a real shift for us.”
Covid had accelerated the need to transform Mitre 10’s online systems, she said.
“We’re having some significant web issues right now and it’s a real, real issue, particularly for our level 3 trading stores. There’s a bit of pressure on the team. We’re looking at a multi-node approach to fulfil those changes in customer shopping expectations. There will be click and collect lockers, centralised distribution, dark stores, all of that stuff – We’re looking at the lot with the transformation of the technology in the entire way we operate.
“Why? The resilience in retail requires constant innovation,” Scown said, citing talking to an Australian supplier of power tools.
“This power tool supplier was telling me how in the last five years the appearance of the battery had just fundamentally changed the world of the power tool supplier. That was only five years ago.”
Bluetooth and cellphone connectivity was at the heart of power tools now “and it’s become almost an Apple product”.
She cited the Manukau Mitre 10 MEGA store “which has got a very, very young demographic in that part of Auckland, high non-European. Pacific and Indian is the major demographic of customers.”
“Where we’re located, access, car parks, hours of opening, how easy you are with multi-channel really makes a difference to a non-linear shopping expedition.”
Retailing was no longer based on “selling stuff” but solutions, she said. Customers were looking for a “do it for me” solution or a “do it with me” solution.
“We’ve got different demographics across regions. The co-operative model is a real advantage because it allows members to cater for local communities and urbanisation is crating challenges for us.”
Land prices and availability were key constraints and the Resource Management Act was “so complicated, so expensive. We’re watching with interest where changes will improve things.
“Across the board, we’re looking for better relationships with commercial landlords. We would like landlords to understand the necessity of flexibility of this new world of retailing,” she said, referring to the transformation of buildings which would be an ongoing cycle.
The business had a vertical integration arrangement with Mainfreight in Auckland, she said.
All online orders were currently fulfilled at store levels. None were fulfilled offsite.
The business wanted to develop more distribution centres, so was looking for land and Scown told the conference that she was interested in hearing from people interested in talking to Mitre 10 about that.
Asked how it was integrating sustainability features into its store network, Scown said a sustainability roadmap meant “we’re doing things in a simpler way that actually makes sense for our customers”. She referred to recycling programmes.
Asked about the cost of building materials, she said those were less than 25 per cent of a finished house.
“We think there are probably bigger areas to look at being involved in if the Government wants to remove the cost of building,” she said.
Social media was important “but it’s more about encouraging our customers to be sharing their projects, things they’re working on and what they’re doing with Mitre 10 products”.
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