How does Hunkemöller distinguish itself from its competitors?
We have the largest number of stores and a unique 150 m² high-street box. We trade on both high streets and in shopping malls. Our customer is ‘Shero’ (‘she hero’), a 28-year old, cosmopolitan woman; she's our muse, our northern light. We look at her when we are developing our product, marketing and communication strategy; asking ourselves how she wants our product delivered to her- we look at how, where, when, and why.
We are a social business, creating a world-class service in terms of our service proposition in the stores but also self-service. We look at how our stores are laid out and we reinvent them to make sure that the product is there when Shero wants it, that it’s easy for her to find, and the navigation of our stores is simple. Our customers shop across all our channels: m-com, e-com, social-com, in our traditional stores, and benefit from home delivery and store delivery. Among these, our e-com channel has grown over 30% this year.
Shero is a working girl, and therefore we have stores which are easier to use as a pick-up point. In the Benelux region, 50% of all of our e-com orders are picked up in store and 60% of all of our returns are returned to store. We cross-sell to nearly 50% of all people that return, which gives us a 360 degree re-loop of the consumer.
How do you fulfill customer demand in terms of logistics?
Our website provides customers with visibility of our e-com stock and the stock in our bricks; we are one of a few companies to allow that. We have a SAP system which allows us real time stock availability, so the consumer can either purchase by click-and-collect or click-and-reserve. Click-and-collect is using a store as a pick-up point and click-and-reserve is when a product can be reserved with no obligation to purchase.Both themes are run simultaneously and both are successful.
Which markets are Hunkemöller interested in and how do you select future locations?
Our biggest growth is in Germany, where we have over 200 stores; when we joined five years ago we had less than 50. This year we opened another 60 units, so we’ve got a clear understanding of the German market. We will end the year with 230 stores, andour ambition is to reach about 450 in the next three and a half years. 92% of the stores are ours, and 8% are franchise. For franchise, we have quite a unique 150 m² box with a 7-meter frontage located in a location with high footfall.
The most exciting part is looking at new countries. We would like to expand into Norway which we have benchmarked against Switzerland. We sent a team of people to look at pricing, real estate, the market, and the consumer, we show consumers our products and panels with our store layout, and we ask them what they would perceive the price of those products to be. This market data is giving us an understanding of what we could sell products for.
Norway is so much more expensive than the rest of Europe; so we've looked at prices against the competition. We need to be extremely competitive but also have a profitable business model. Those sorts of things are really exciting as they give us the opportunity to learn about the consumer in our new market. Recent openings are in Sweden and Austria, both countries are really exciting for us and already profitable.
With stores in Saudi Arabia and Bahrain, do you believe the middle-eastern market has strong potential?
We are very confident about the GME and we have had a very strong start already.We are the only business with 18 stores in Saudi Arabia and we have just started in Bahrain. Next, we are expanding into Qatar, Muscat, Abu Dhabi, and Dubai. The GME is a very different market; it has a lot of restrictions. Of course, we need to abide by the laws to be able to survive and grow. We cannot show visible products for women, so everything has to be re-shot and there are complications when going into these markets; but we are very successful. We believe that we will become the dominant party in the UAE. Local partners are essential, we do not have the understanding of the market or the skill set required to successfully open in those markets.
How has shopping behavior changed in the last few years and how has this influenced your brand?
I think that online shopping has influenced our brand tremendously and we have been quick to change our business model and create an omni-channel experience. The one thing we really need to focus on is Shero; if it’s relevant to her, it’s relevant to us; otherwise we stop and try something else.
We know that 60% of our customers browse online before purchasing in store. We've got 2.6 million active member card holders and we can see all of their shopping behaviors. Our CRM platform is very advanced, allowing us tolook at how customers shop and at what products they like. We can then entice customers by making suggestions or by tracking purchases and matching them to other customer's similar shopping behavior. We question how we can stimulate the customer and we have found that the customer does not like to be spammed, she wants the emails to be specific, she wants us to know what her shopping preferences are, and for us to, in effect, edit our product range for her.