From The Source: David Jordan, Baskins-Robbins
Jordan has held the position since February 2014 and has extensive experience within the hospitality industry with multi-site business management, franchising, retail operations management, project management, sales and marketing and business development.
Baskin-Robbins commenced operations in Australia in 1989. On June 14, 2013, Palm Oasis Ventures became the Master Franchisor of Baskin-Robbins Australia. Palm Oasis Ventures is a division of Galadari Brothers, which is the largest ice cream franchisor in the world, owning and operating more than 600 ice cream stores. Globally, the Baskin-Robbins brand is present in almost 50 countries with more than 5000 stores.
Justin Grey: How was FY15 for Baskin-Robbins Australia?
David Jordan: I’ve been in the role for 18 months and 2014 was a record year for the brand in the history of it being in Australia. We had a lot of work to do in terms of the transformation from where we were to where we wanted to be. So 2015 for us has been very much about solidifying from the platform that we created in 2014 and just continuing to build on that. It has been a very consistent year and steady growth year, because we were coming off a lower base and have had a lot to do in terms of systems and rebuilding the brand. So 2015 has been for us a very positive year.
JG: Baskin-Robbins Australia is owned by two overseas franchisors in US-based Duncan Brands Worldwide and Galadari Brothers in the Middle East. Does having two masters throw a spanner in the works?
DJ: We do have a very autonomous framework within the Australian market. Obviously we have two owners – we’re a JV here in Australia. The percentage owner is Duncan Brands Worldwide, which is the master franchisor. The stakeholders are quite different with regards to their businesses – an American company versus a Middle Eastern company. So there are always some strategic and cultural challenges we’re faced with here in Australia in managing the expectations of both owners. But there is good symmetry, and there is key alignment on all of the overarching strategies, which is important. We’re able to leverage experience from both of our owners, and I think that gives us a competitive advantage in the market. To take on board the insights on what they’ve implemented successfully worldwide, that has been very important, especially in the turnaround stage we’ve had in the business.
JG: We’re currently deep into a major shift towards healthier eating habits. How is that impacting on business for Baskin-Robbins?
DJ: It’s something we talk about on a regular basis as a team. Market conditions shift, there’s an ebb and flow, and I think what’s important for us to remember is we need to go back to what our core values are. And at the end of the day, our job is to make people happy. And we stand by that. So we don’t sell ice cream; we sell experience. So for us it’s really making sure we don’t lose sight of what our core brand values are, and why we are successful. There’s some interesting statistics that I came across when I started the role – Australia has one of the highest per capita rates of spending on ice cream of any country in the world. We’re third, only behind New Zealand and the US, and the average Aussie eats around 18 litres of ice cream a year. Consumers are becoming far more educated than they ever have bee, and there are some great brands establishing themselves in the marketplace that are focused around healthy product lines. So it’s important for us to realise that consumers are always looking for something that makes them feel good. So as long as we continue to create great ice cream with an instore experience that is better than the product, then we really feel that there’s a strong market for us to continue to successfully trade as a brand. And ice cream will always be there.
JG: What is Baskin-Robbins offering in terms of customer experience?
DJ: For any brand, I think brand awareness is important to build upon. And then in turn, brand loyalty. Brand loyalty for us comes back to the product and the experience. So 18 months ago we had to stop everything we were doing as a brand and go back and think of our guests. So it started with the out of store experience, all the way through to the instore experience. So we created several initiatives with our franchise partners – training initiatives, instore initiatives – designed to be able to give our guests the best experience possible, based on their feedback, and the learnings from them. So all the way from external aesthetics, to the greeting that you receive instore. We have, as a point of difference, our pink spoon, which effectively means that any guest could come into our store and they can try every single ice cream we have, for free, with our pink spoons. It’s a point of difference, but it’s something that we’re very proud of because we really want that instore experience. We want people to be able to try eight flavours, if they’d like, before they actually make a decision. We’ve really worked hard as a group on creating better training programs and making sure we deliver great guest experience. It’s the greeting, it’s the conversation we build when they’re instore, it’s the farewell we give them. And it’s really about the engagement that we can create. We’ve got a great product, we just need to be able to create the great experience and memory.
JG: There were plans for 20 new Baskin-Robbins stores in 2015. Is that number close to being realised?
DJ: It’s coming along quite well. Last year we opened 14 new stores, which was a record for us as a brand. Effectively it’s a more than 20 per cent growth rate, which was significant for us last year. And this year we’re well on track – we’re about to open our ninth store and we’ve got a large glut of store openings in the last quarter of the year. So we’re very close to being able to achieve out targets. What’s been important for us is making sure that our growth is based on long-term sustainability principles. There was a period in the market in retail many years ago where supply and demand ruled and retail tenancies were in short supply. That drove rents up, and as a result there was fierce competition amongst retailers to snap up those tenancies. So as a result of that, there are some unsustainable rent yields out there at the moment. So we’re very mindful of growth just for growth’s sake and ensuring that our growth is for long-term success for us and our partners. Our approach has been a little more conservative and making sure that we grow by achieving the right locations and the right tenancies, but critically with the right rents. Not just for the sake of opening another store for another store number. It’s pursuing long-term sustainability rather than short-term development.
JG: Have you identified how many more Baskin-Robbins stores the Australian market can sustain?
DJ: We currently have just under 90 stores nationally, and we’re very comfortable with where our brands our located. In Queensland we have our strongest presence. We have a very limited presence in NSW and Victoria, which are the two largest states by population. So we feel we’ve still got significant opportunity to be able to move into those states with some significant presence. And then there are a variety of other opportunities through commercial partnerships and varying the model that we currently have to be able to give ourselves an opportunity to move into other categories as well.
JG: You spoke recently about how Baskin-Robbins is using social media – please share some of the key points from your presentation…
DJ: One of the things we realised 18 months ago was in terms social media and digital, we were doing a lot. We were in as many avenues as we could be, but we really weren’t doing well in any of them. So the key learnings for us was to scale back. We had to stop, and just understand who were our demographic and our core customer base. Where are they? And how are they communicating? And then we had to be very specific with our marketing department and develop key synergies for that market first. And only over a period of time, we started to diversify.
The second part for us was to ensure that our online strategy was backed up with a comprehensive, but aligned, offline strategy. And that was a key learning for us that we didn’t do well two years ago as a brand. And thirdly, sometimes there’s a tendency to try and be something to everybody as a brand and try and generate as much reach as possible. And we’ve scaled that back significantly, to make sure that we have a very targeted reason for all of our activity. And coupled to that is understanding that reach at national level isn’t always as important as at a local level. So a lot of our social media strategy in particular has been around building localised social media activities with specific stores, to be able to build communities. And that’s where we’re starting to see some of the most significant success from our activities – being able to harness the power of our brand at a local level and building the grass roots and building a relationship between our franchisees partners and their local communities that’s authentic.
And authenticity is really important. When you take an approach at a national level, sometimes you can lose your authenticity. And then you just become another brand that’s selling another product.
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