According to Accent Group CEO Daniel Agostinelli, the footwear business is on track to emerge from the pandemic stronger than ever. Here, Agostinelli explains how he continues to lead his team through the challenging period and how increased investment in TV has driven sales during the pandemic. I will never forget the date: 27 March 2020. This was the day we closed every one of our stores and stood down the better part of our 5,000-strong team. I never thought I would see that day. Covid was ri
was ripping through the community and for the safety of our team and customers, we had no choice but to close our stores.
When we made that decision, we didn’t even know about JobKeeper. It was exceptionally difficult on all fronts, and not just because sales dropped off a cliff.
We quickly realised we needed to get to work on a plan and together with my 12 general managers, we developed a strategy underpinned by a set of catchphrases I like to call the three As.
Accept
We quickly realised we had to accept what was going on. Nothing was going to change it. And even though we had closed our stores, we started to notice online sales were exploding. The business traditionally brings in $200,000-$250,000 online in a day. During the pandemic, sales increased to $1 million on many days. We even had a couple of $2 million days.
By accepting the reality of the situation, we were able to come up with a plan to get the business through this challenging time.
Adapt
After acceptance came adapting. We quickly shifted focus to what needed to change. Prior to Covid, we didn’t have hand sanitiser or masks in our stores so that had to change. We also needed to adapt our marketing strategy.
We know plenty of people watch TV but we appeal to a youth demographic and weren’t sure our core consumer was watching. We tried a sample with one of our brands in Melbourne to see what would happen. The results were stunning. We took that, added two brands and went national. An immediate sales increase followed that was so impressive, I don’t know if we will ever see those sorts of results again.
Accelerate
As we started to reopen stores in various states, we saw what we are calling ‘revenge spending’. People who were bored and tired of being at home were looking for an escape and shopping was it. Our stores have reopened in Queensland, New Zealand and New South Wales and they are doing exceptionally well. The expectation is that when we reopen in Victoria, where we have 110 stores, we will have the same outcome there.
But we won’t rest on our laurels. Covid has shown us the benefit of continuing to focus on our digital business as well as our customer experience.
You know the old saying that when someone has a bad customer experience, they will tell 10 people? When they have that bad customer experience online, they’ll tell 100 of their friends. So you can’t drop the ball.
Covid has certainly changed consumer behaviour in a major way and we don’t know what that will look like in the future. Pre-Covid, around 15 per cent of our total sales came from online. And while this has surged by 150 per cent, we expect this to settle somewhere between 22-25 per cent of total sales. That’s a seismic shift and it’s one we forecast to happen in the next three to five years, but Covid has brought it forward.
Online is important but I believe stores will always remain relevant. For many people, shopping is an experience and stores are critical to driving brand awareness. Stores are still relevant in terms of a return on investment. In fact, in the coming months, we’re looking at opening another 30 stores while trying to grow digital space.
It’s amazing what happens through a crisis. During the pandemic, we purchased the Stylerunner business. It was losing money and we thought we could add value. The online pureplay has been so strong during Covid, we have decided to add physical retail stores.
Like many of you, we’re facing a challenging environment. In the next couple of months, we hope things will settle but there’s always opportunity to be found within the challenge.