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Catch Group: Expanding online, learning from offline

Catch Group chief executive Nati Harpaz believes Catch’s half-yearly figures posted yesterday “speak for themselves”.

“We’ve had an unbelievable six months from July to December which beat even our most optimistic forecasts,” Harpaz told IR.

Much of the 62 per cent sales growth is due to Catch’s execution of its marketing strategy, as well as the growing range of products available to customers across its online marketplace.

“If your range is 40,000 products, you might be giving your customer a reason to shop with you once or twice every 12 months,” Harpaz said.

“[But], when you grow that range to two million products, for example, all of a sudden that customer…has a reason to come back more often and shop again.”

Harpaz said the increased product range also means Catch is losing fewer customers to its competitors. Active customers jumped to 1.36 million at the end of the second quarter in FY19 – 54 per cent higher than the same quarter last year.

The company has launched several new marketing initiatives over the past six months to introduce its offering to new customers. One of the biggest was the opening of a physical pop-up store at Chadstone shopping centre.

“Initially, when we looked at [the store] we thought about how we could make the experience very digital, allowing self check-out and integration between online and bricks-and-mortar,” Harpaz said.

“But we realised during the [holiday] period, you just want to make it very, very easy for customers to grab the product, pay, and leave the store. No one wants to spend time widgeting and playing around with things.”

As the weeks moved closer the Christmas, Catch focused on reducing friction in the shopping experience and expanded the size of the store to stock more product and offer more checkouts and customers into the space.

While the initial Chadstone pop-up closed, Catch has signed on to relaunch the store, in a smaller capacity, within the centre for another six months.

The new store will offer click-and-collect, but it will be more focused on curation of stock, featuring the best products from online and deciding if they will also sell in a bricks-and-mortar environment.

“Choosing the right stock to be on the shelves makes a difference. Usually a retailer puts something on the shelf and it’s stuck there for months until it sells,” Harpaz said.

“We have the luxury to be able to pull things that don’t work out, on a daily basis, put it in the warehouse and replace it with other products.”

Catch Group’s 22,000sqm warehouse, opened in October of 2018, will be a key component in the second half of FY19, enabling the retailer to hold more stock, and therefore, allowing Catch to improve its in-stock range moving forward.

Additionally, while Catch Marketplace has curated its range down to a more manageable 1.7 million products, the group has plans to grow that number further.

“Marketplace can grow into millions of SKUs, but it has to be the right SKUs,” Harpaz said.

“We want to be differentiated by the other marketplaces by making sure that what we put on our site is very relevant to our business.”

Further incentives to Catch’s membership program, Club Catch, are in the pipeline as well, as the brand moves closer to hitting $1 billion in sales – a challenge for the business set by Harpaz several years ago.

“We’re getting closer, probably the fact that we took Scoopon out of the business made a change [but] we are really on track to grow significantly over the next 12 to 24 months,” Harpaz said.

“We’ll definitely get there.”

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