From the source: Adam Wilkinson, Crumpler

adam wilkinsonBIO: Adam Wilkinson joined Crumpler as CEO in April 2017 and has over 20 years of experience in retail operations and branded businesses, including Hugo Boss, Williamson-Dickie and Cambridge Clothing Co. Most recently, Wilkinson worked as the General Manager in product and sales for Designworks (part of ASX-listed The PAS Group), a multi-brand apparel wholesaler.

COMPANY PROFILE: Crumpler

Born in Melbourne in 1995, with a creative spirit that remains today, Crumpler is dedicated to creating innovative carrier solutions built for purpose and made to last.

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Inside Retail Weekly: What have been some interesting highlights from the past year for Crumpler?

AW: The past year has been an exciting time for us. About a year ago, we made significant changes. I was brought onto the team and we made changes at an executive level with a new retail manager and new planning, marketing and design managers.

We’ve done a lot in terms of reinvigorating the brand and we relaunched a new Crumpler logo a few weeks ago. There’s been a lot of work that’s gone into the reinvigoration of product and marketing the in-store and online experience. We’ve made some significant headway and first and foremost, that’s been getting the team and product right. We’ve been fortunate that on the back of that, while going through this transition, we’ve achieved strong like-for-like sales. It’s a tough [retail] environment at the moment, but we do feel the brand is heading in the right direction and the customer is appreciating the new design.

The other highlights have been that we’ve rolled out some new retail stores. Over the past year, we opened new stores in Sydney, Perth and Malaysia, as well as refurbishing quite a few others.

A couple of years ago, a lot of research was done into the brand and overwhelmingly, the consumer said they knew Crumpler. It had strong brand recognition, the customer knew it was a great Australian story with great heritage, and still stood for value, quality and functionality, but it probably wasn’t as aspirational as it used to be. So the business at the time made the decision to elevate the product and make it more desirable, while not letting go of its functionality, quality and durability.

It’s still an evolution, but we’re looking at a new store format next year. It’s a work in progress. We’ve engaged a company called Noise Noise Noise to work with us in executing our in-store experience. For example, anyone who’s walked past our windows has seen a marked change, just in terms of the in-store theatre. We’ve rationalised the in-store product range and a lot of work has gone in elevating the visual merchandising element by putting colour ranges and capsules together. Instead of having just a sea of bags, we’ve focused on merchandising collections and we’re dropping in more product regularly to give the customers a sense that it’s new, fresh and on-trend.

We’re definitely a customer-led business, omnichannel is important for us and we see growth in both online and physical retail. But obviously like a lot of other businesses, e-commerce is growing rapidly. We’ll invest quite a bit in terms of digital to drive the growth, but equally, the [physical] retail business is important.

Crumpler stands for clever design, functionality, quality and we’ve spent a lot of time training our staff on how to talk to the customers through technical products in terms of all their key features and benefits. Omnichannel is the best option for us – we’re seeing growth in online for us.

IRW: A lot of retailers now are realising that because the customer buying journey isn’t linear anymore, they don’t judge the performance of their bricks-and-mortar stores on just sales anymore. Is that something you have thought about at Crumpler?

AW: We have flagships that are in key locations in the inner-city. Those stores are very much a marketing tool or help to sell online and help to drive sales into physical locations. As we widen the network, we want all of them to be profitable and there will be some that don’t serve that purpose, but we do want to see a cash contribution coming from those stores. It is a bit of a mix, but there are some stores in our portfolio which are more instrumental in terms of driving online sales and brand recognition [than others].

We’ve invested quite a bit in a new website and digital marketing, whether it’s affiliate marketing, paid search advertising or different ways of generating leads and customers. We’ve doubled our budget in that area in order to drive sales. Nowadays, you need to drive that very hard to capture that customer. We have an inhouse team that is working on our site’s speed, because we want that to be up to best-in-class standard. There is a marketing team that has grown from two 18 months ago to six or seven, and most of them are specialists in the digital space.

We’re doing a lot of work online, moving away from wholesale brick-and-mortar and working with pureplay retailers. The digital team not only looks after our online store, but also with those partners, as we’re trying to align ourselves with partnership programs. It’s a dropship model, so we control the product and pricepoints going on the stockists’ site and and the product gets dropshipped directly from our distribution centres globally. That’s a real push and focus for our business.

We’ve signed up to the likes of Zalora in Asia, Laza in Asia, and we’re about to make our shipment to Zalando in Germany, which will be shipped in 15 countries with a 20 million customer database. In terms of our investment on the logistical side of things, where our 3PL houses are located, we’re thinking about how we can get products sent to our customers quickly.

In Australia, we have 17 stores. We have four stores that we run from head office in Singapore, two stores in Malaysia that we run from Melbourne and we have one in Thailand through a distributor. Then there are three others in Germany, run by Crumpler Europe.

We feel there is an opportunity for us in Asia, especially in Malaysia and Singapore where we’ve been for awhile and there’s strong brand recognition. We see opportunity in some of the other Asian markets, but we will be moving into those markets through key distribution partners, like we have in Thailand. We have strong distribution partners interested in opening concessions or stores and that’s probably going to be a focus over the next two years.

IRW: How would you describe the product category that you’re in?

AW: Bags and luggage is how we define ourselves. We’re a carrying solution! We do get into the smalls and accessories market. It’s quite a competitive market at the moment.

Probably as late as five or six years ago and since the brand started 23 years ago, the key product for Crumpler was the messenger bag, which is how the business was built.

We were also known for our camera and photography products, but trends change and certain categories move on for various reasons and four or five years ago, we noticed that there was a diminished demand for the messenger bag. It wasn’t seen as cool anymore. The camera market was being decimated by iPhones, people weren’t carrying cameras anymore.

As a business, we had to look at other opportunities and other trends and how the business could evolve. The big one for us was there was an explosive growth in backpacks. As a category, three years ago, it accounted for 10 per cent of sales – now it’s over 40. That’s not just the bottom-end backpack, either – that’s been seen through to premium labels, too. It’s not seen as a younger person’s bag anymore, it’s being used by all ages now.

The other big one is the travel category. Three years ago, we had hard luggage, but we’re about to launch a new soft luggage range which will come in around July, August and September. With the increase in people travelling now, that’s a big area of focus for our business.

IRW: What are some of the challenges of running a business that has such a long history like Crumpler?

AW: I think the hardest thing with a brand as iconic as Crumpler is there’s a diehard customer base that never wants to see the brand change because they’ve grown up with it since the 90s when they first bought the messenger bag. We have customers telling us they’ve had that bag for 20 years. They’re a diehard customer who is probably adverse to change, but the reality is as we grow globally and see a split of customers moving to a 50/50 male/female ratio, we need to offer product that’s new and on-trend, but ensure that the loyal customers from day one are along for the ride, too.

We are comfortable with the new range that we’ll capture a new base, but we love our loyal diehard customers and we want them to keep buying bags they can hang onto for 20 years.

IRW: What was behind the transformation of Crumpler as a brand?

AW: Our key motivation was the evolution and elevation for Crumpler as a brand. We’re quite lucky to have a history that we’re incredibly proud of and in the 1990s, the messenger bag suited our customers perfectly – it was high functioning and in bright colours with big logos. It was very 90s and very recognisable.

Obviously we wanted to update the image of Crumpler now that we’re moving in 2018. It was time for a refresh and a lot of research went into consumer sentiment and a lot came back saying that while they loved the story and logo, it was actually a reason not to buy it. The branding wasn’t in tune with current customers’ desires, they wanted something that was understated, more on-trend, less brightly coloured and less overt.

Another trend in bags is we’re selling a lot more in terms of hybrid bags. Customers want to use backpacks they can take to work, the gym, then on a plane. We found that some of the colours and branding we used to have might be appropriate for riding a bike, but not work, so we saw an opportunity to evolve the logo and the product range in order to look relevant in the 21st century.

IRW: What are some of the key areas of focus for Crumpler this year?

AW: We’re looking at doing key collaborations over the next 12 months, as we’re drawing in a more female base. Next year, we’re doing one with Disney for example. and predominantly it will have a demand in the Asian market. We’re selling it wholesale, then we’ve got two other collaborations with well-known fashion brands over the next year as well. We are working with partners that can do a collaboration to stock in our stores and in theirs as well.

IRW: Crumpler has been in the overseas market for a long time now, but not all Australian brands that have gone international have been so successful. What do you think are some of the problems there?

AW: I think a local understanding of the market is important. Every market is so unique globally. Even though you can sell product online, to trade bricks-and mortar successfully, you need an intimate knowledge of the market. There isn’t adequate brand recognition in the market or an adequate amount of marketing focus on that particular market before the brand enters.

The approach is almost like, ‘We’ll open a store overseas, then we’ll do marketing and people will come’, but that’s not the case. Within Crumpler, the regions that have been successful for us, like Singapore and Malaysia, started off as distributors, and those guys had to put in eight to 10 years of hard work to build the brand equity before we took the business back.

The guy in Singapore had launch events going on in the store, he built the social media up, took ownership of the brand and was a good partner for us. After eight years of that, we bought the business back and it’s been successful for us because of the margins.

A lot of Australian brands are a bit premature [going overseas] and they go in with the idea that if the product is successful in Australia, it will work overseas and it just doesn’t work that way.

 

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