Spotlight, long a mainstay of homemaker centres in Australia, is making a major push into shopping centres with a new, small-format store concept that focuses on the brand’s “creative” categories – craft, sew and party – and offers classes and DIY workshops as it looks to reach new customers and take market share from the likes of Kmart and Lincraft.

The retailer on Saturday opened its second Spotlight Creative store at The Glen shopping centre in the Melbourne suburb of Glen Waverley and has identified up to 50 sites in major shopping centres where it could introduce the concept going forward, Quentin Gracanin, Spotlight CEO, told Inside Retail. 

“[Landlords] love the Spotlight brand, but they’re always looking for something unique. When we pitched this, they were very excited. It’s a different category asset; it’s unique for a mall,” Gracanin said. 

Spotlight opened its first Creative store in Westfield Carindale in Queensland in June, and the phone hasn’t stopped ringing since, he said. 

“It’s hard to find the space [for a Spotlight store in a shopping centre], but the malls have been shaken up considerably by retailers’ retreating bricks-and-mortar footprints,” he said, pointing to the recent administration of Harris Scarfe. 

“We see landlords being more accommodating and welcoming because they have to backfill space.”

A sense of theatre

The Spotlight Creative store at The Glen is 815sqm. Besides the pared-down range – the store doesn’t stock window furnishings, manchester, home decor and many other products found in a typical, 2000sqm-plus Spotlight
– the interior doesn’t look markedly different from other stores in the network.

“This was something we debated at length – how far do we deviate from the Spotlight look,” Gracanin said. “I was very passionate about maintaining it.”

One difference is the design of the front windows, which are used to create a sense of theatre. 

“In one of the windows [at The Glen], we have a purpose-built creative room, where there will be classes and demos going on. And in the other, we have an amazing inflation station, where you can watch people filling up balloons,” he said. “I think that’s really exciting.”

Incremental growth

The launch of in-store experiences like classes and demos may help Spotlight to differentiate itself from those retail chains already serving customers’ crafting and party needs in shopping centres. They range from discount department stores, such as Kmart and Big W, to specialty players like Lincraft.

Another differentiator is the fact that Spotlight Creative stores, while significantly smaller than traditional Spotlight stores, are still much bigger than those of its competitors, according to Gracanin.

So far, Spotlight Creative isn’t cannibalising sales from the retailer’s destination stores in nearby homemaker centres. There are four Spotlight stores within 15km of the new, smaller store at The Glen shopping centre.

“It’s a market share play but also a frequency play for existing customers…it’s [about] incremental growth rather than cannibalisation,” Gracanin said. 

“We’ll always be predominantly in homemaker centres – that’s our bread and butter. They have easy access, great parking and rents tend to be lower.”

Opportunity in Asia

The idea for the new store concept came from Spotlight’s experience in Singapore, where the retail chain has had a presence for 25 years. It also operates in New Zealand and Malaysia. 

“There’s no big box retailing in Singapore or Kuala Lumpur,” Gracanin said. 

And yet, the creative categories – dress, sew, quilting, craft and party – in the retailer’s shopping centre stores in Asia outperform its destination stores in Australia.

“We weren’t sure whether this was an Asia factor or a shopping mall factor,” Gracanin said, noting that malls attract a wider audience and more frequent visitation than homemaker centres.

The retailer is now considering bringing the Creative store concept to Asia.