From the source: Alex Brandon, Macpac
It’s been an eventful year for New Zealand adventure retailer Macpac since Super Retail Group took over the brand. CEO Alex Brandon reveals what the process has been like, the creation of the brand’s Adventure Hubs and the benefits of living in a country with some of the harshest and wildest weather in the world.
Inside Retail Weekly: How have things been tracking since Super Retail Group took over Macpac?
Alex Brandon: The Super Retail Group bought us back in February last year and it’s been a good year actually. They’re a good bunch and have a very similar culture to us – the integration there was pretty straightforward. From a systems point of view, it was a bit more complicated because we run different operating systems. There were a few technical challenges, but nothing that wasn’t taken care of during the year. Overall, it’s been a good integration into the Super Retail Group business and being their fourth brand – it’s been good.
In March, we transformed nine stores from Rays to Macpac Adventure Hubs – it was a big project and we retained the store team. They’ve been fantastic. We changed everything else to become the adventure hubs such as the offering, the look and feel of the stores. The plan is to take the nine adventure hubs to 20 over the next four years.
Our Macpac stores average 300sqm and the hubs average 1800sqm. That was something we came up with with the SRG team. We wanted to offer Australian premium destination for gear and advice. We’re a big store offering the full Macpac range, plus other outdoor world-class brands like Patagonia and Colombo. It’s a real adventure destination and so far, so good.
We’re pretty autonomous here in NZ. When we sold the business, there was a lot of interest from people. The Super Retail Group was our preference because of their expertise in Australia. From the beginning, they saw the benefit of keeping Macpac in Christchurch, and had no intention of moving it to Brisbane.
The culture hasn’t been hard to retain at all – it’s been business as usual. We’re in the same office and the team is building, but we haven’t lost anyone at all through it, so it’s been an easy transition. The Super Retail Group’s culture is similar to ours – they really put their team and customers first and they care about both and we do that too, so it’s not been a conflict at all.
IRW: How would you describe the outdoors category at the moment?
AB: It’s an excellent category to be in globally and it’s growing. I put that down to people discovering the benefits of being outdoors physically. From a mindful point of view, I think people are discovering it’s great to be outdoors, whether it’s a short hike or a three-week hike. We’re benefiting from that global shift and I think – without getting too philosophical – it’s an anti-tech thing. We’re in front of 20 screens a day, it’s nice to get away from them. More people are discovering that, so that’s benefiting the whole category. I think there’s plenty of room to still grow on a global scale, too.
I think there’s a lot of good, strong, outdoor retail especially in New Zealand and Australia, and I think there’s enough business to go around. So we don’t look at our competitors too much because there’s plenty of growth in the category for everyone. We’re the brand of choice for customers who want quality outdoor gear and durability.
Since we launched in 1973, the business has a lot of history in making excellent outdoor gear in this fantastic proving ground of New Zealand. We’re based in Christchurch and we have the base of the alps nearby, so our team goes out daily to test the gear. New Zealand has some of the wildest weather in the world, so it’s an excellent place to test outdoor gear.
It’s really harsh weather and terrain here – harsh sun, plenty of snow, rain and very steep mountains.
It was part of the reason we just could not move the business to Brisbane, Sydney or Melbourne. I can literally look out my window now and see the mountains. Half the office cycles to work. They go running at lunch time and test a pack or raingear. It’s a passionate group of about 100 outdoors-y people who test the gear daily. It really meant we could not move to Australia because of the testing and SRG saw that from the beginning. The heart of the brand is in Christchurch, which is why we’re dedicated to staying here.
I think part of our challenge is to differentiate, but I think our customers appreciate the heritage and expertise we bring. We’re a real authority on it.
IRW: What are some of the challenges for retail at the moment?
AB: We’ve got similar challenges to most Australian and New Zealand retailers, which is online orders from overseas and Amazon – that’s a challenge for us all. We’re all in the same boat, and the way we have to combat that is just by giving better experiences and advice in-store and so far, that’s really working for us. You can’t get that sort of tactile experience online, so we certainly benefit from being in a category where people often want to come in to try the goods on and get the advice – more so than, potentially, the fashion retailers.
The outdoor business is a technical category, where people look for expert advice and want to try the product on before buying, especially in the higher-end category in terms of packs or walking shoes. I’m not saying we’re completely protected against the Amazons of the world, but we’re in a better position than some because of that.
Then there are the usual retailer issues, in terms of the landlords and their rents. Shoplifting is an issue for all of us retailers – that doesn’t get as much publicity as deserves. It’s a real issue for most. The penalties for the people who get caught are very low, so it’s a frustration that a lot of us share, I’m sure. Our best way to combat it is to offer excellent customer service and make sure we have the right teams on. All our stores have pretty high-end cameras which certainly help deter thieves. It’s something we all face.
IRW: How would you describe the Macpac customer?
AB: It’s a wide range of people from those doing everyday outdoor activities to climbing to the top of a mountain. Everyday outdoor activities are like walking the dog or dropping the kids off at school. Then there are people climbing peaks around the world. It’s very diverse.
We know that most of our products never see a mountain, but our customers have the confidence that our product is built for the top of the mountain, so if they’re walking the dog, they’ll be kept warm and dry. That philosophy has been around building the best products possible, even though we know most people don’t go off-road in them.
Our customers value quality and performance and durability. I think a lot of them are socially and environmentally conscious – we certainly are and I think it’s a great thing. We certainly try to do our bit to help and our customers appreciate that.
IRW: Tell me about the kind of work that Macpac does in that space.
AB: It’s twofold. One is trying to use the most responsible materials possible, so it starts from the manufacturing side and specifying products that do the least harm in terms of using the least chemicals and water or having recycled content. We are on a real mission to use more responsible fabrics and materials.
Then about two years ago, we started the Macpac Fund for Good that uses some of our profits to give back to environmental or social causes. We might have helped maybe 25 causes in the last year, both in Australia and New Zealand, where we donate to good causes – like getting kids hiking who would never be able to afford to go, or planting trees or helping in all kinds of different ways to help environmentally and socially with a connection to the outdoors. We started that two years ago and each year, we’re growing that fund to make sure that as our business grows, we can be more socially and environmentally conscious and helpful.
IRW: How have outdoor customers’ expectations changed in recent years?
AB: I think customers expect more now in terms of the experience and advice they get in-store, that’s probably not exclusive to the outdoor industry, that’s probably retail as a whole. Given the growth of online, retailers have had to lift their game in terms of making stores about more than just product, but giving great advice and a better experience, which we’ve been attempting to do in the last few years.
IRW: Supercheap Auto is well known for being an excellent omnichannel retailer. Where are you guys at in that journey?
AB: All four brands of SRG are on Salesforce Commerce Cloud. We switched maybe six months ago – it is a really impressive platform and certainly improves our omnichannel delivery, especially on mobile because so many people shop on mobile now. The switch has been of benefit to us. It’s early days, but there’s still a lot more we can do in terms of omnichannel.
Supercheap is ahead of us, but it’s great to be a sister company and learn from them. There are a lot of ideas in the pipeline for Macpac’s omnichannel in terms of how we can better serve our customers, but so far, I think we offer a fairly good digital experience. Our online sales are around 10 per cent of the business, so there’s room to grow that when compared to other retailers.
I’m a big believer in bricks-and-mortar. We have 70 stores delivering 90 per cent of our volume and digital is 10 per cent. Our plan over the next four years is to add 30 stores, so we’ll be at 100 stores in four years’ time. Digital is an important part of what we do, but it doesn’t replace traditional retail for us.
For the last five or six years, so much focus has been on digital and for most retailers, it’s less than 20 per cent of what they actually do. For us, we’ve got a good digital team that is growing well, but bricks-and-mortar is growing just as well
IRW: A big part of creating that kind of offline experience is hosting events. Is that something you guys are looking at doing?
AB: We don’t do a lot of retail events, but the plan is to introduce them, especially in our hub stores in Australia. We have the room to hold some great events focusing on the outdoors. That will be coming in the last six months. There might be a beginners’ introduction to hiking or an introduction to camping with kids – you have no idea what to buy, so we’ll do evenings in those Adventure Hubs where expert speakers talk about what you should expect and take with you. They’d be education-based evenings for our customers. We’ll get that up and running pre-Christmas.
Are there any particular trends in the outdoor retail sector that you’re interested in?
Really, the biggest trend in outdoor is responsible sourcing and sustainability. That’s coming through more in outdoor than any other retail category as far as I know. It makes a lot of sense. As an industry, we use the outdoors a lot and we all want to protect it for our children and their children. Companies like Patagonia really lead the charge on that and do a fantastic job.
I think the absolute biggest trend is sustainability in terms of using recycled content and less harmful materials. Responsible sourcing in general is a real focus and it’s growing. Then we’re seeing our customers and team members more interested in what we’re doing to help that cause, so that’s exciting. We’re all passionate about that here, so it’s exciting that the whole industry is behind that.