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More than a store: a modern flagship for a modern world

Supercheap Auto“This is much, much more than an auto store,” asserted Supercheap Auto managing director Chris Wilesmith at the opening of the brand’s Penrith flagship last week in Sydney. 

Preferring instead to call the culmination of 18 months of planning and building a “customer experience centre”, Wilesmith did two things last week.

First, he laid out SCA’s vision for a digitally-engaged, experience-led retail landscape, putting the principles expressed across Super Retail Group’s (SRG) broader business into practice.

Two, he provided an answer for the persistent uncertainty that’s been swirling around the retailer and its parent surrounding the impact of Amazon and e-commerce more generally, on established market players.

The flagship represents the largest investment SCA has ever made in a single store and is claimed to be the most digitally-integrated retail offering in the southern hemisphere by the technicians who laid kilometres of wires into the walls. 

It’s the brainchild of veteran store designer Gary McCartney, who envisaged a concept that could deliver experience and community to a big box site, while catering for the automotive retailer’s digitally savvy customer base.

As one would expect from a modern flagship, the bells and whistles aren’t in short supply, with everything from endless aisles to an in-store learning cinema adorning the fixtures.

But beneath that is an attempt to manifest a retail philosophy that’s equipped to carry the brand into the future, namely implementing channel agnosticism and a fixating on in-store experience.

It’s an evolution for SCA, which has traditionally been a strong performer for its ASX-listed parent, having contributed a 6.9 per cent increase in sales to $489.2 million for HY17. The brand retains a market leading position in its category over competitors like Repco and Autobarn.

But Wilesmith isn’t resting on his laurels, amid ongoing concern about whether SCA could continue to outperform the market in an Amazon-enabled environment, with some analysts predicting that SRG could lose between 19-32 per cent of its earnings within five-years of the e-commerce giant’s entry.

Investors, who have sent SRG’s share price down more than 21 per cent since the start of the calendar year, remain sceptical, prompting group managing director Peter Birtles to repeatedly attempt to shore-up confidence in the company by appealing to its underlying strengths.

Clicks-to-bricks reaches new heights

Perhaps ironically, SCA’s strength is undoubtedly digital. Online sales increased by 48 per cent over HY17, and although this coincides with e-commerce growth more generally “an encouraging trend for Amazon”, it’s the way that customers are shopping online that Wilesmith and his team are banking on.

More than half of SCA’s online orders are now collected in-store, a fact that’s forming a crucial part of the company’s future.

Leadership has responded by upping the ante on click-and-collect at Penrith, utilising an adjoining mini-distribution centre to provide a 60-minute turnaround time and 24-hour collection through exterior lockers and unique SMS codes.

The prevalence of click-and-collect is crucial for the continued relevance of SCA’s nationwide network of 320 stores and brings the flagship’s approach to experience into focus, justifying a change in thinking for the brand more generally.

Supercheap may be in the name and price will always be important in retail, but Wilesmith and his general manager of retail operations Pam Pugsley recognise that they face a different set of priorities than those who founded the business as a mail-order operation in the early 1970s.

As Pugsley noted, “Retail is a pretty tough space these days and if you are just selling on price and not much more, of course people will shop online.”

“People have limited time, they know in the first six feet if they will walk into a store or not – this store is about drawing you in, it’s about extending the offer outside of retail to communities,” she later told IRW.

The do-it-for-me customer

Those who buy online and collect in store form a crucial part of what Wilesmith and Pugsley see as a tripartite customer profile: the do-it-yourself customer, who is in decline; the do-it-for-me customer, a growing segment; and the don’t-do-anything customer.

The rise of do-it-for-me customers has prompted SCA to increase the number of services it offers at the flagship from the usual 29 to 63, encompassing everything from wiper fitment “it does around 220,000 a year network-wide” to new services such as windscreen chip repair.

“We see that we can provide an even greater end-to-end solution for customers, our next evolution may even involve actually having service centres in the not too distant months,” Wilesmith said.

A quick look around the store reveals that this type of customer has been built into the fabric of the operation, the exterior services section feeds into a rest area dubbed the ‘pit-stop’, which invites customers in to have a coffee and share their car stories, and a part cinema/part workshop/part advice area in the centre that McCartney dreamt up as the focal point of the store.

Rafted seating within the central area provides a gathering point for consumers to access more than 700 product education videos, while simultaneously allowing others to watch motorsports live via directional speakers and a hexagonal ring of 84-inch LED screens, below which sits exhibition space for regular in-store events with trade-partners and motorsports pros.

The headline fact about the centre of the store is that there’s not a single product on display, something that McCartney maintains is a big step for a retailer to take.

“The first thing we asked was, ‘How do we make the customer journey as easy and simple while also providing that ‘wow’ factor?’,” McCartney explained. “The experience centre is a central organising principle, you put something wonderful in the middle and let customers circle around.”

Products skirt the inner perimeter of the location in distinct sections that general manager of merchandising Matt Logan organised into distinct occasions and solutions rather than traditional categories.

Each area is embedded with digital functionality, but rather than opting to install a multitude of tablets focused on the same task throughout the store, digital screens have section-specific functionality, such as a touchscreen that matches a recommended oil type to a customer’s car.

Omnichannel meets services

It remains to be seen whether customers will be hooked on watching Bathurst from the rafters of Supercheap Auto Penrith or sit down for a cuppa and a chat with fellow enthusiasts, but Wilesmith isn’t counting his chickens and knows some features may not work. 

“There are some things we’ll need to fine tune. We’ll look then for two opportunities – what are the things we can scale immediately right across the network and how do we fit that into the evolution of our refurbishments?” Wilesmith explained. 

But between online shoppers collecting in-store and those looking for a growing range of services, SCA remain confident that digital integration and in-store experience are the foundational pillars of the company’s future, whatever form that may take.

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