Beer was previously chief operating officer at Luxottica Retail and the Australian general manager of OPSM Retail where he implemented programs to reduce chronic staff turnover, waste and shrinkage, while reforming an ‘endemic retail discount culture’.
In 2016, Beer founded George & Matilda Eyecare and is currently the CEO and managing director of the rapidly expanding firm, which last week hit the milestone of 50 stores.
Inside Retail Weekly: I’d imagine it’s been a very busy 12 months for the business…
Chris Beer: We launched George & Matilda two years ago and the business is predicated on the fact that in the Australian marketplace, there’s two big players and if you look around the world in any sector in the industry, there’s usually three or four, provided they’ve got a point of difference.
In the marketplace, we have 2,500 independents that are loosely held together, with some buying groups, small chains or purely independent practices.
We opened our first practice about 20 months ago and this month we opened our 50th.
We’ve got regularly onboarding practices and then once their onboarded, we’re focused on how we can improve already really well-run businesses.
We’re a fairly values-driven organisation and very conscious that these independents have been very successful in their own right in the past. We spend a lot of time working with them around what’s made them successful and how can we add value. We certainly don’t turn up and say, ‘We’re George & Matilda we do it this way’, that’s a corporate approach.
We’re very much the anti-corporate. It’s been a dual-track process. When we started with our first partner, it was a bit bumpy on the transition, but we’ve invested a lot of money in systems and technology to help the independents.
In the very early days, they weren’t as developed as they are 18 months down the track.
So we probably affected performance a little bit to start with, but once they’re onboard, we use very sophisticated data and analytics linked to IBM Watson to become very personal and relevant in communications. We’re not a TV brand.
The profile of our partners is someone who’s been very well-integrated into the community as a health professional then how do we use their very rich databases, which they probably haven’t done much with in the past?
It’s not because they haven’t wanted to, it’s expertise the cost of getting those infrastructures for automation and personalisation is high.
With our scale and size, we give the ability to be able to leverage that. The big corporate players have sophisticated supply chain technology that makes one more efficient to do business, takes time out of practices so that they can get more time back into looking after and serving customers.
But more importantly it takes cost out of the supply chain. Rather than independents being left to just market forces and small wholesalers putting prices up.
There was nothing in the optical industry that was off the shelf. We’ve taken software as a service, where it was logical and heavily integrated and customised technology so that we’ve got a unique benefit for the business and the optical industry.
That enables us to link into supply chains, do things differently from a retail business and say, ‘what are the things we want in the business going forward and what are the things that the technology wants to push out of our model and into other parts of the supply chain’.
Trading has been quite solid for the practices. We’re always improving the process so hopefully when we integrate new practices there is no bumps in the road or distractions, which is not easy to do.
Once we’re on to the supply chain, using those sophisticated marketing tools and bringing benefits of technology and marketing skills, we’re really helping grow those independent practices that haven’t had that sophistication in the past. When we partner with somebody, they stay as part of the business so that becomes a truly strong partnership and how we grow together.
IRW: Describe George and Matilda’s relationship with wholesalers, in light of the major supply chain changes over the last 18 months.
CB: We’re not one-size-fits-all, so we spend a lot of time understanding what works for an oncoming partner, what brands work and what ranges work.
We’ve got extensive supply arrangements for most suppliers in the country and the world.
Then what we do is we integrate slowly, so what we don’t want to do is go into a marketplace and say ‘oh we know better’. We work with a partner to say, ‘this is what’s really important to you, here’s what we’re finding at other practices’ and we let it evolve, learn, adapt and change.
We basically customise assortments for every single practice that our technology allows us to. Each practise is basically a different assortment based on what they believe, the customers they have, demographics and what sold in the past.
Over time, products that don’t move, we can then go back and in a formal way and say ’we have a sophisticated retail supply chain that tells us this product doesn’t turn, we’re finding that this one in a different area, this demographic works’.
The benefit of the suppliers is they know that as they work with us, we take costs of gearing out of the supply chain because we’re fully electronic and data-oriented.
Whereas those in the independent market are not, so the cost of them doing business is call centres and other things, whereas ours is digitally linked.
We share from a wholesale perspective too, what I call the last mile. So most wholesalers in the market think they know who they’re selling to but most retailers don’t actually give back to them, or most small retailers don’t give back to them.
This is probably because they don’t have the data in a meaningful format, so we help the suppliers become more efficient and it’s a true partnership in doing it. Over time, we just keep evolving and customising and we don’t mind any brand that works being on the assortment plan for any particular practice.
But if one brand doesn’t move, then we talk to suppliers about, ‘if you want it to stay there you’ve got to help us do more training’ or there might be something in terms of refreshing the range. It’s a living, breathing beast, nothing that you wouldn’t expect in any other retailer.
We’re an organisation that prefers not to have suppliers, we’d rather have partners. I have the view that the deeper relationships, the greater the trust, the faster you go.
And ultimately that means some days, it’s not perfect but you wake up the next day and create a stronger relationship, you don’t throw the toys out with the cot.
I’ve been in this industry 34 years and not one day have I ever had a crisis of conscience – I don’t go to work and do things that customers don’t need.
We help people, test their eyes, make sure their vision is great and help them see better.
And through great products, we help them look and feel better with what they wear. I think it’s a unique industry to be involved and I’ve never had to question what I do or provide in services or products to consumers, because we’re not making junk that people don’t need.
We’re providing services and products that people need to enhance their lives in terms of visual purity.
More and more optometry is becoming the front line of the primary care of diseases like glaucoma, macular degeneration. So it’s a really nice industry to be part of and it’s one that there’s a lot of responsibility and we don’t take that lightly.
IRW: Given the health connection, are optical retailers sheltered from the reported woe and difficulties facing all the other sectors?
CB: From my past life, I used to run a sunglass business so the optical business, when things boomed, never saw the heady heights but it was also more consistent.
The peaks and troughs were flattened out a little bit. Having said that, without the risk of offending anyone and after 34 years in the industry, I don’t like to hang out with too many retail people outside of hours because they tend to be glass half empty.
The reality is, the ‘woe is me’ is a bit overstated. The true test, and if I go back in my career when I started as a kid on the shop floor, the same sort of conversations were taking place then. The difference is, it was something different, it was shopping hours, Saturday or Sunday trading if you go back all those years in Melbourne.
The key is, you’ve got to be investing in technology to enhance the customer experience but ultimately it is all predicated on your business model. Are the services and products that you’re providing truly customer centric and are you building a business from the customer up? Are you finding products and finding a way to sell them?
My sense is that many companies can be more and more customer centric.
It’s all about providing the right products at the right time. Evolving with technology, enhancing the customer experience and listening to them and adapting your services.
Now that hasn’t changed, I think what probably has changed is technology is speeding up that process, so you’ve got to be more nimble.
As a smaller company, we heavily invested in technology and we’ve done that because from my experience, knowing if you don’t, you’re out of date.
A few years ago, I stood at a conference and said, ‘hands up those people who don’t have a data scientist in their business’ and most people put their hands up.
My provocation to them was, well you’re probably going to die or it’s too late if you haven’t already done that.
We’re a little business compared to the big guys. One of the first things we did in the early months is we had data scientists understanding how we use data, but how do we use it in a way that makes the experience far more personal and interactive from a consumer perspective.
If you walk into a normal independent optometrist, most of them are going to give you a recall every two or three years to say, come back and have your eyes tested, just like a dentist would.
We’ve only been in operation 18 months, but we now send 400 variations of that a month. In 12 months time, that will be many hundreds more than that.
When my 17-year old daughter gets a recall, it’s in the look and feel and tone of George & Matilda. We co-brand with all our partners, it comes from them, we’re just the support engine that enables them to build their business.
The brand is very much them, by George & Matilda. But my 17-year old daughter gets a very different recall letter in look, feel and tone, pictures and diagrams and all that sort of stuff, to me, who’s a 52-year old guy with a family history of glaucoma.
So my recall letter is far more health-oriented, although I’m fortunate enough to not have glaucoma, but half my family does on my side and it’s very relevant. I think that’s testament to what we’re doing in terms of investing technology and to be quite frank, companies that aren’t doing that have probably missed the boat.
Things like getting a text spam message on the weekend saying ‘hey I’ve got a sale do you want to come in’, I call that pray and spray, you’re just spraying to your database something that’s probably not really relevant at the time.
Those things irritate customers and they opt out, rather than getting something to say ‘this is really relevant to me, it’s personal and more meaningful’. It’s about building stickiness to the brand and we haven’t waited to get technology like that, we say ‘this is fundamental to the business’. We invested in it before we opened the first practice.
IRW: Would you say that the ramp up of technology and speed of change highlight the main evolution of retail, say moving from your time at Luxottica to starting George & Matilda?
CB: Yes, there’s no question more and more technology is becoming required to drive customer experience. We’re building a business that wherever we can automate tasks and functions that can be from a finance and operational perspective, it’s really important.
In fairness to older and more established companies, the software as a service industry, cloud-based and the flexibility of technology today is far more cost effective than it was ten years ago.
Today, the sophisticated technology that we have is a benefit when setting up from scratch, you don’t have any legacy systems that are costly to change.
If you have the right architecture, today there is certainly a benefit to get it right up front without any legacy systems, there’s no question about that.
In some areas, not all because that would be extremely arrogant for me to say, but we know where we want to end up in the next 12 months and the following year after that.
One of the challenges for any company is having somebody on the board, or certainly senior management that has really got a strong eye for what’s happening and evolving.
And I think it’s no criticism of guys my age or older, but you have to be really open for what’s available because there is so much technology available that is really powerful and can do things for you.
It’s one of those things that’s probably overlooked or not really well understood.
IRW: Can you tell us a little bit about expansion plans for the company?
CB: Obviously we’re building out a technology platform that’s really driving the business. We’re not fully omnichannel yet but that will certainly happen in the next 12 months, clicks-and-bricks with that full integration of using technology for the customer experience from a marketing perspective will all be integrated, which is great.
We’ve focused on the big building blocks first and the most important things that drive the greatest value from a consumer and patient perspective.
We’ve gone from zero to 50 in 18 months. Our goal is to keep that pace, I would say for the next two to three years. We certainly believe that there’s the opportunity for us to become a significant size and scale because of what we’re doing and who we’re partnering with.
We engaged with Saatchi and Saatchi to help us with the brand before we even launched. I said this is what I’m thinking of doing instead of going back into the corporate world, I’m thinking of doing my own business.
I wanted to create a brand that had warmth and personality. And it’s no criticism of any of the optical businesses, but it’s a very functional industry. It’s an industry where you don’t say ‘I’m going to hang out at the optical store on the weekend’ right? It’s seen as medical, you do it when you have to like dentistry, but you’re probably not as scared of your optometrist as you are of your dentist.
The heritage of the brand is about being independent entrepreneurs and George Street was the first street of independent entrepreneurial retail in the country. We wanted a balance between city and country and Matilda was regarded as a warm country Australian historic name, so we’ve got the balance of the yin and yang, between a progressive city but the warmth of the country.
We’ve also tested the brand across other key markets around the world so that one day – first and foremost it’s about us doing a fantastic job in the Australian market and being sizeable – and then we will clearly look to expand internationally. That’s probably two or three years away but we’ve certainly got an eye on it and been building relationships and people have been reaching out to us.
When you start a new business, people say ‘well done’ and think will or won’t it succeed, and I think when we passed 50 stores people realised we’re the real deal. It’s a lot of fun doing it. We’re adding a lot of value to people.
IRW: What’s making trends in the optical and eyewear retailing space?
CB: The population is ageing so the need for more eye health services is increasing, but at the same time there’s an epidemic acknowledged by the World Health Organisation of creating myopia.
There’s a predisposition for the Asian communities to wear glasses but myopia is now also being caused by the huge amount of time people spending looking at digital screens.
World Health is saying there’s an epidemic by 2050. So we’re seeing the instance of needing more health services to manage those increases and you can have things like myopia-control that can stop it.
In terms of the retail, the market is really moving in two ways. No different to any other industries, there’s a move away from the middle to cheap and cheerful, with less focus on healthcare but having multiple pairs of wearing glasses.
A lot of that is coming from many of the online retailers that have struck up. Because it’s a personal thing, putting glasses on your face, they’re [online optical retailers] are struggling to have a successful business.
Then on the other side, where George & Matilda sits, is where health and eyecare is far more premium. You want to spend more time with your optometrist, understand issues or what the options for myopia-control are so you don’t have to keep wearing glasses or contact lenses.
We enable the independents to take away a whole bunch of the costs that they can’t control, so over time we can create better value for them without having to put price pressure on, because of the efficiency we just invest that back into more service, more time.
IRW: Any initiatives on the cards?
CB: We’ve built a new practice design as we wanted something that was more unique. If you walk into most optometry practices, there’s a box with frames on it, the most important area of the whole process – the optometry room – is usually shoved down the back and hidden away.
We wanted to take the mystique away and make it a more inviting environment by making the eye exam and health element more integrated and part of the process so that it feels more seamless with the retail.
How do you make a bigger hero of the optometry, which is what it’s all about moving forward?
We a test location in Liverpool [Sydney suburb] where it’s designed like a house so as you move into the eyecare, it’s more personal, integrated.
In a contact lens area, where it takes more time like a bathroom type situation and similar to the kitchen or dining where you sit and eat, there can be more interaction with customers, staff, people trying things on.
It’s a very warm environment and we’ve used materials that are uniquely Australian.
We’ve also been conscious that because we’re the independent community and the anti-corporate, we have no intention of one-size-fits-all. We’re going to have a couple of flagships that are the ultimate brand experience of George & Matilda, but what we also don’t want to replicate those in every location because then you just look like a corporate business.
From those model stores, we’ve taken some key elements. Let’s say we’re redoing our practice in Mudgee, we want the local Mudgee team to be involved and make it their own but we want the designer working on that to incorporate key elements so there’s some look and feel elements that are part of Georger & Matilda, but their store, looks and feels different because it should be an expression of the partner.
We don’t want a cookie-cutter approach where you build them all the same. It costs more for us, but it means we’re staying true to the brand of being warm, local, which is what the big guys can’t do.
So we stay focused on how do we let the independents continue to be independent but enable them with the sophistication and tools we can bring in the levelling of the playing field.
My ambition is that everyone who walks into George & Matilda, walks out better educated, better understanding, whether they buy anything or not, that’s their choice, but at least the experience is enjoyable.