While other department stores are shrinking their networks and handing back space, Dean believes consumers still want to touch and feel products before they buy, even if they’re now doing their research online.
“Consumers do want to interact with physical products,” he said. “They do want to come into a physical store and have a look at the entire range, as well as do their research online.”
Key to making this work financially is Harris Scarfe’s flexible store format. While the retailer is predominantly located in shopping centres, where it offers a full range of categories, from kitchen and homewares to apparel and electrical, it is also trialling some large-format stores that only offer the kitchen and homewares range.
“We’ve got six of those today and we would certainly open up some more,” he said.
Harris Scarfe is also making use of taller fixtures that enable it to display more products in less space, which is part of its new, more industrial store design featuring polished concrete floors and open ceilings.
Of course, it doesn’t hurt that retailer was able to renegotiate all its leases when it went into voluntary administration last January, prior to Spotlight buying the business in April.
“We’re not in a position where we have too much space, and we’re flexible enough and adaptable enough to be able to occupy a different array of retail spaces that may become available, which other retailers can’t do,” Dean said.
In addition to new stores, the retailer is also sharpening its focus on apparel through more exclusive designer collaborations.
In February, Leona Edmiston launched an exclusive range of her iconic wrap dresses for Harris Scarfe, and Olympic swimmer Giaan Rooney recently introduced her own exclusive range of athleisure and loungewear. They follow Australian fashion designer Jane Lamerton, who has been designing exclusive collections for Harris Scarfe for the past few years.
“You have to have a point of difference in the marketplace if you’re going to attract customer loyalty, and that’s going to become harder and harder to do moving forward. This is our way of being able to create a range that is exclusive only to Harris Scarfe,” Dean said.
While kitchen and homewares are the retailer’s two biggest categories, and what it’s best known for, apparel is key to growing foot traffic and, ultimately, sales.
“If you’re buying a cook set, you’re not going to buy one of those every three or four weeks, you’ve got that for at least 12 months, whereas apparel is definitely a more frequent purchase,” Dean explained.
“Apparel is critical for our business because it helps drive traffic into the store, and then people cross-shop across the other divisions.”
Investing in digital
Like many retailers, Harris Scarfe saw significant growth in its e-commerce business during Covid-19.
According to Dean, online sales represented more than 20 per cent of the business during the lockdowns last year, up from 7 per cent pre-Covid. He expects online sales to settle around 15-18 per cent, and says the business will need to improve its digital capabilities accordingly.
In the next few months, the retailer will open a new distribution centre, where it will handle a significant portion of its online orders. It currently does fulfilment out of its bricks-and-mortar stores, but moving to a hybrid system will enable faster and more efficient delivery, Dean said.
The retailer is also working on a drop-ship approach with some of its key suppliers, so it can still fulfil orders even if they’re out of stock at Harris Scarfe.
But the biggest change will be to the website. The retailer will move to a new e-commerce platform mid-year that will enable it to create a more intuitive and personalised shopping experience, with product and page recommendations based on browsing behaviour.
“It will be able to deliver up pages that you are most likely to be interested in just by seeing how you’re navigating the website, and then the actual experience of transacting will be more efficient as well,” Dean said.
“It means people will come on more often, they’ll search more on the site and be more likely to spend.”