Inside Retail Weekly: Tell me about last year’s Strandbags transformation and what it involved.
Felicity McGahan: I came into the business 18 months ago and it was a very healthy business, and I think that’s a very important component. When you take roles like this, you have to be clear on the brief and why you’re being hired. Some people are looking for a different style of leader and when you hire me, there’s a certain thing you’re going to get.
When [owner] Michael Lewis interviewed me, the brand was healthy and doing really well, it just needed that new generation to evolve the business. You can’t age with your customer and that was the initial brief – to come in and elevate the brand and experience. Let’s get a vision. Where are we taking this business? It’s 100 years old. The family I work for has worked with it for 40 years, and it was ready for its next injection.
I did a lot of work with the customer and across the agency to just really spend time with them and ask them what do you love about us and what have we done well? We spent a lot of time with non-customers, which is quite confronting. We have a very loyal customer base so we had to be careful not to alienate them, we had to bring them with us.
IRW: What did you learn from those non-customers?
FM: We found that a lot of the strengths of what your customers love can be the reverse [for others]. The customers that love us love the range, the value, the wide assortment, the service, the people and the stores.
Then for the non-customers, it had to be more curated. It was a bit overwhelming and we had to be clear on what we’re offering and communicate that to them. It was also about telling them the brand story – we’ve never really talked about the brand before. And they weren’t coming over the lease line because of our clutter. We were starting to get them over our digital [channels], but it was about how to get them across multiple channels.
IRW: How would you describe the transformation process?
FM: The first bit was the discovery phase and it was really about understanding the brand and customer.
Then there was definition. The team and agency were really strong and we just defined our vision and where we wanted to take the business. We landed on a brand platform – Strandbags is always by your side. It was fantastic. It’s so authentic and feels so comfortable for us as a business. When we landed on our positioning – let’s create the most loved destination for the perfect bag – it gave us clarity.
Then from that, we started to develop all the creative and all the touchpoints. Internally and externally, you start to line them up against the new platform. That’s been the last 12 months.
That shoots out a new store design, your culture, your values, everything starts to align with where the business is going and who you are. That’s where we are now – we’re in the execution phase. We did the deep diving, we landed it, delivered it and now we’re testing and responding. Some things will work and others won’t work. We’re not this crazy risk-taking business, we read the customer’s response and adapt, but we make sure we get those reads before we go big.
We’ve been opening new stores, evolving product, putting in new product against that new platform. It’s just been phenomenal, because we spent so much time at the front end and clarifying it. Sometimes in businesses, you just want to jump in and change, but the more time you spend upfront and nailing it, [the better] – then everyone and everything can follow you and you’re clear about where you want to take the business.
IRW: Can you elaborate on what ‘phenomenal’ means to you?
FM: We talked about being digital and evolving the business digitally and driving those digital channels – the response to that over Christmas has been great. There’s a lot more work to go – we’ve just touched the sides. We’ve always run e-commerce, but I’m talking about the total evolution of it, making it more personalised, bringing the channels together to work more effectively and understanding the customers.
Whether they’re researching, buying, being loyal – whatever step they’re at – they’re jumping across channels all the time. So now it’s about getting clear with the data and finding out how to catch them on the different pieces of their journey and communicating with them. For example, you’ve walked into a store, you’ve done research, you know the case that you want, you just want someone to get it for you and then check out through a mobile POS because you’re not interested in lining up at the enormous queue over them.
IRW: You started at Strandbags 18 months ago and started the transformation six months later. That’s a lot of change for a 100-year-old business. What was it like rolling it out and were people on board with you?
FM: I think the key is when you come into a role like this, you need to learn the business, understand it and build relationships before doing anything. So I spent the first six months really focused on that piece of it, then through that process I started to bring the team on the journey.
The thing is, the team developed it, I didn’t – I put the team in the room, but I didn’t develop it and we brought an agency in to help us keep on track with customer feedback. The team was ready to evolve the business. It wasn’t an uphill battle. They were very excited about having a leader come into the business who was ready to take it to the next generation. We did it together and they’re a strong team. Where I probably added the value was getting them to work together. It’s such a solid business, it was very ‘let me run my function and get my job done’ but we spent some time out of the office to hear from other departments, learn and collaborate a bit more. They were really open and it made a big difference.
I pride myself on relationships. I’m not a CEO who goes in and says ‘Here’s my team’. Trust me, when you go into these kinds of roles, you’re on notice more than they are. They love their brand and they’ll be like, ‘Well, who are you?’ so you need to earn their trust and respect… But once you start getting the wins, that’s when people start thinking, ‘Right, she’s OK.’
IRW: How would you describe yourself as a CEO?
FM: I’m very driven by people, I feed off them and I get inspired not just by leaders, but my team and customers.
I’m a retailer. I was born to do this. I was raised in retail and I love retail. My mother was one of the original sales consultants at Sportsgirl. I used to go to work with mum and loved retail. I love being in centres and stores, so I think [as a CEO], I’ve got the retailer, the people side and that customer experience. I love the customer experience – I love understanding how customers are evolving and evolving the experience for them.
IRW: 2020 has had a lot of store closures, a few of which had been around for awhile. What’s your take on that?
FM: I think it’s very sad. There are people who are attached to all these brands. The reality though is retail has always been a change-or-fail world. You have to keep evolving the business. The customer has control now. They have it in their hand. We have to now change our model because they have control, whether it’s the landlords or the retailers – we all have to, it’s a different world. And you’ve got to do it quickly. It’s not a destination, it’s the journey we’re all on. We’ve been through massive things before. Every decade has shifts, this is just a tsunami right now.
You have to be honest with yourself and say, ‘If I went tomorrow, would anyone really care? Or would they just go somewhere else?’ I think the reality now is that with having two channels for customers to play in, they can find what they want and we’ve either got to deliver it to them at the price they want or they’ll just go somewhere else. It’s that simple.
Then there are certain categories that are over-penetrated in this market and that’s the reality of what’s going on.
IRW: What brands do you think are doing well?
FM: I think there are lots of brands doing great jobs. I think brands that aren’t here anymore were doing well in certain areas, but I think you have to be very consistent, it’s the combination of understanding how your back end is connected to the front end of the business. I think there are great brands – Mecca’s a phenomenal brand. I think that Cotton On is a phenomenal brand – they do amazing things and they’ve globalised the business. I think there are lots of good things happening, the question is is it fast enough and are the changes big enough for the business’s starting point?
IRW: If we look at Strandbags in the next year, what are your plans for the business?
FM: The thing for us now is we’ve put a strategy in place and we’re in the implementation of it, so we have to continue right-sizing the business with our mega-strategy. We’ve had incredible success with our large-store format. That’s a big opportunity for us.
Our luggage and travel category only gets bigger as the whole world travels. It has gone from being a commodity product that serves a function to get you from A to B to an accessory that supports your personal style. There’s a massive shift that’s happening in that category and we still see enormous growth in that.
From a digital perspective, we’re understanding now how you get to that personalised experience. We’re collecting a lot of great data, it’s just about how we’re using it to deliver value to the customer and value-add technology.
We rolled out our mobile POS for Christmas. It was insane to walk into the stores on Black Friday and Christmas and see no queues. Why should the customer go where we said she should from a store design perspective and walk through those three sections, go over there and check out? The customer’s thinking, ‘I’m standing out the front with my two kids and a suitcase here’.
It’s the same as click-and-collect and other things we’ve put into the stores. I think building on all of that is going to be the key focus for us for the year.
IRW: You’ve had some great experience at some major retailers during your career. What are some of the interesting things you’ve learned?
FM: An inspiring leader said to me ‘You don’t have an MBA, you have an MBWA – a ‘masters in business by working around’!’ It was actually a very true comment because I’ve just been very fortunate to work in amazing businesses for their time – Sportsgirl in the day of [former CEO] David Bardas; Esprit in the day of [founder] John Bell; Gap in the day of [CEO] Mickey Drexler. Sussan with [CEO] Naomi Milgrom; [founder] Nigel Austin at Cotton On and now [owner] Michael Lewis with Strandbags.
They’re such different leaders so what I hope is that bits of them have chipped away and created the brand that I am. I’ve been incredibly lucky. I’ve had great brands, great leaders and I surround myself with really good people. You don’t get into roles like this without the team around you. What excites me and what I feed off is being an inspirational leader who people want to work with and surprising them with how good they are.
When I can go into a business, I can assess it quite quickly and work out where I can add some value and work with the team on delivering that. But likewise, I know when it’s time for my next chapter – I’ve moved the family five times and we lived overseas for 20 years. I do what I love and while I’m adding value, I keep doing it. And when I see something come up, I just see where it takes me – I’ve taken many leaps of faith. Retail’s a bit of luck and success and it’s all just paid off.
IRW: Black Friday has snowballed quite quickly in the last few years. It’s huge now. How has it impacted Strandbags?
FM: It’s one event but it’s the globalisation of events that’s happened, which is great. Now you’ve got to create reasons to drive traffic and volume and there’s an event somewhere in the world every week. So you don’t have to go to China for Chinese New Year or Singles Day or the US for Black Friday. I think retailers were getting there, but I think the customers really ‘got it’ this year. Black Friday was one of the most exciting days [of the year]. If you love retail, it was brilliant. People were in centres, people were online, every channel was buzzing, stores were buzzing and people were buying gifts for themselves and others – it was everything you want retail to be. It wasn’t a day, it was an event that ran over multiple days and it really kicked off the season, like it does in the US. It kicked off Christmas for us all very strongly.
IRW: Some retailers have criticised how Black Friday has impacted their Christmas sales.
FM: I think you complain if you get caught out because you don’t have a plan. It’s a 13-week period now and it kicks off on that Black Friday, then you’ve got December trade then Boxing Day at the end of it. So you’ve got these enormous bookends now and it’s just understanding from a product perspective and offer perspective how you pulse all of that to make sense of what the customer is looking for. The better we all get at it, the bigger an event it will all become.
IRW: What have you learned about your new role that surprised you?
FM: I love this business because it’s very streamlined. It’s not big, it hasn’t been built up too much and it allows us to come together as a small team, make quick decisions and I’m loving that. I know what to be careful of when you’re in a business like this that has growth coming, but now I can apply those learnings – how do you keep it really resourceful and quite tight but keep it growing and really inject those layers and investment? When you get a good business, you start to think, ‘Let’s keep going’ but then the challenge is there’s nowhere to go and things start to turn down – you want to be in control of those levers.
Fast fashion can be so fast that it can create some spinning and it can be difficult for teams. Sometimes it can be difficult to develop your team and to make decisions and think and learn on the way because the business is going so fast. Whereas Strandbags is a great business that allows you to coach your team, which is really nice, but it might be just where I’m at in my development myself.
A mentor told me that there are three stages of your career. You’ve got those early stages where you’re like an athlete, then you become a warrior and then you become that statesman. I think I’ve still got a bit of warrior and athlete in me, but it’s nice to be able to coach and develop your team and give them more framework [instead of] driving every decision too hard. It gives them space and you can watch them develop around you. When you go too fast as a CEO, it can be hard for the team to keep up with you. I’m very much enjoying that piece of this and I love learning new things. I’m winding up, not winding down in my career and I’m in a place where learning a new category made me uncomfortable again and I love that.
IRW: Why do you think Strandbags is still around after 100 years?
FM: It’s been around because they’ve evolved the product, every decade. It used to be a lot less fashionable, so they’ve moved product along – luggage has continued to grow. There’s a really strong technical planning logistics backend to Strandbags that had to be built to make the business successful because it’s about big products, small footprint and high volume. Growing our own brand has been another piece of that success, too.
I’ve actually fallen in love with the category. I’ve literally turned into the bag lady. Because I fly to Sydney every week, I have my handbag, work bag and my carry-on. But through our research, we found that a bag is by your side in every moment of your life and it’s part of your milestones. Your first day of school? It’s all about your bag. Your first big job? It’s all about your bag. Your first overseas trip? It’s all about your bag. In all of your life’s adventures and journeys, you have a bag by your side. It holds your life now – it’s gone from function to fashion to your whole life.
It’s an incredible category to actually participate in and it’s amazing. When you see customers come in, there’s excitement. You see women walk in who are about to go on a cruise and you can almost see them holding a cocktail when they walk out with their bag – it’s very tactile, a very real beginning of the journey. We have a huge amount for customers that do click-and-collect. It way over-penetrates in this category. The majority of customers buy online and still want to come in-store, touch the bag and open it up.
Now as we’ve opened these megastores, we’ve seen our customer base – which was so strongly female – become much more unisex. I think in the bigger stores, we can create two stores very clearly – the travel world and the fashion world – and it’s becoming a place where guys are a lot more comfortable to shop. You can see that because our backpack sales are through the roof. People don’t realise we have a big men’s business.