Latest / The Retail Podcast / 5 Retail Shifts Reshaping Asia | Baby Bunting, India, Eid & AI

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5 Retail Shifts Reshaping Asia | Baby Bunting, India, Eid & AI · The Retail Podcast

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  You're watching and listening to Five Things Friday Hey Pack
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  Edition. Brittany, thank you for the
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  introduction. We're going to jump straight in
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  15 minutes. Top five things, I'm moving the
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  needle in Asia. Why don't we start with Yuri for
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  the first? One, right, I reckon I've got a
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  couple of biggies this week and it's more because I've been
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  getting out and about and hearing cool things.
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  So the first one I want to talk about like I spoke at a
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  conference last week called Shop, which is run by a group
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  called power retail in Australia and they had the CEO of a of a
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  company called baby Bunting speak and baby Bunting is
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  Australia's largest, you know, baby stuff, everything from
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  bottles to nappies to pushes to prams to, you know, from zero to
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  probably toddler 33 is all right.
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  So I might just share a little bit on that one because I've but
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  they have launched their store of the future and I know in
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  recent weeks I'm going to see if I can make this a bit bigger.
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  Actually, how's that? They've looking good.
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  They we've been we've been talking about baby bunting a
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  little bit of that story of the future concepts for a while now.
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  And and what was really cool about Mark the CEO's
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  presentation is he really started to talk about really
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  started to talk about look at that.
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  It's just beautiful, isn't? It wow, this is this is
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  exceptional, Yeah. Yeah, it's amazing.
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  It's amazing. So he's on the go.
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  You know, some really beautiful stuff in here.
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  So like it is wild. So there's one really that is a
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  real, this is a really my favourite.
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  This is my favourite image. So this image is like a kitchen
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  scene, right? So you've got all of your
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  feeding, cooking bottle sterilising apparatus.
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  So this is a big change here. There's this, the assortment
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  went from, you know, all nappies and all bottles to like now into
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  situational moments. That makes sense.
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  So it's really done. So this is a mock kitchen if you
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  will. It's very.
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  It's not. Yeah, yeah, it's, it's
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  beautiful. It's beautiful.
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  And so Baby Bunting has been dormant.
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  People love them, but their, their, their, their shops look
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  like something supermarkets from the 70s I would suggest.
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  And so they've really stepped up their game in terms of the way
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  they're presented and Baby Bunting were in trouble much.
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  So they Mark said, the CEO said we were in touching distance of
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  our banking covenants. It wasn't going well.
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  EBIT was falling through the floor and they showed some
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  figures. And so they've they listened,
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  they had the consumer inside. They listened to the consumer
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  that we love you but and you have everything.
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  But it's just, it's, it's just really hard.
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  You know, it wasn't a great experience.
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  So they basically set set strategy on a page and they've
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  end up executing a beautiful infinite.
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  I'd really encourage it is from is actually a design award site
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  and go and have a look at if you're not not an Australian
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  can't see their stores go and have a look at this because it
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  is just absolutely stunning. But we you know, when we look
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  talk about store of the future concept, we sort of look at it
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  with a slight bit of scepticism because it costs a lot of money
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  to go from what it was to what it is today.
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  And So what I've got today is a little bit about payback.
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  So these store fit outs, you know, we're talking about
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  improved layout, interactive design, product designed, more
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  experiential retail, better merchandise and navigation and
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  focus on exclusive and private brands.
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  My products unique to baby Bunting to protect margin.
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  What they've seen straight away is sales uplifts of 25 to 28%.
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  That's incredible. That's too incredible, yes.
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  I mean, it sells uplift. That's amazing, yes.
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  On their stores, so high gross margin improvement of 40 basis
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  points. I will expect that, yeah.
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  Again, higher transaction volumes of plus 24% basket size
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  of increased by 6%, right. So people are people are
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  shopping mall and increasing the purchase of the order, right.
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  And the payback currently because they they thought they
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  might have a little bit of a Nike, a bit of a Halo type
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  effect where it would go up and then come down again.
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  It's been sustained. These stores costing about 1.7
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  million Australian to refurb 1 store.
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  Yeah, and they're paying back within three years.
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  That's the thing. Shot me bacteria.
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  Amazing. Yeah, so it's, it's an amazing
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  story. And I I just when I I saw this
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  and I saw them actually as part of the Power Retail Award show
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  last Thursday night. And this is, you know, Australia
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  is a mature market and very much a fast follower market.
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  But this is something exceptional that's happened in
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  Australia. And I was like, and I watched
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  Mark speak and he talked us on a journey of how they engage staff
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  and how they set their strategy on a page and how they looked at
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  the revenue, the revenue returns from this stuff, even from store
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  to store to store to store. It's but it's an incredible
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  story. So I really encourage you if you
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  go and have a go, go. You're looking for baby bunting.
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  It was something. And if you live in Australia, go
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  to a store. It's just.
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  Absolutely, Yeah. So, yeah.
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  So if you put back the same picture just now, I just want to
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  point out something which it ties exactly to what I'm going
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  to say next, right? And you look at the spaces here
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  and you kind of expect your front liners, you know, the
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  people who are introducing your items or talking about
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  promotional items or talking through how this lifestyle is
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  because you're going to kind of have to introduce it.
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  If it's if it's designed this way, it's not just for customers
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  to experience. It is also for the store to sort
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  of have demo sessions, the stores who have ambassadors to
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  talk through it. So this is one of the most
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  profound shift my story in retail today that's happening
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  under our very eyes and nose. And perhaps we may not realise
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  it immediately. This is the frontline human
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  resource design that's changing. So we as retailers we use to ask
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  this very strange question that continuously is strange for me
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  is about how do we reduce labour cost?
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  You know, labour cost is one of the most important thing in
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  retail and we're still asking that, right?
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  But now for me, the better question to ask really is how do
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  we design better human structure that will amplify the customer
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  experience. So the idea really is we want to
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  optimise human impact per employee.
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  So one employee actually should be turning around and converting
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  more customers into real, into bigger baskets, into frequency,
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  into better loyalty. That's what a front liner should
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  be doing. But we're not able to measure
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  that before because the job scope that we give them has
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  nothing to do with that. So now we look at examples.
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  So for example, if we look at Heidi Lau, Heidi Lau is
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  incredibly successful. They have in Singapore, them in
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  China, they're in Malaysia. It's like a Steamboat kind of
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  restaurant that got everyone talking because you know
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  Steamboat, it takes a long time. You go into a table, you spend
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  an easy 2 to 4 hours before you come out.
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  So, you know, the turn around time for people to keep coming
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  in and wait is long. The wait time is very long.
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  So what do they do with it is that they then have people, your
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  own staff literally walking around doing amazing stuff like,
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  oh, let me colour your nails. Oh, I can tie your hair for you.
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  Oh, what about snacks? How about you?
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  How do you snack around? What about massage?
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  I give you a quick massage, you know, so the wait time becomes
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  bearable. And then they talked about and
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  sometimes they even put on little, little shows and they
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  become really famous on TikTok. Yeah, and their toe in and all
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  that stuff and their employees are highly sought after post
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  their job, post their steam at Heidi Law.
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  And then if you look at another crazy way of doing this, which
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  belongs to Lucking Coffee. So Lucking Coffee has like quite
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  amazing number of outlets across China.
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  And what they have been doing is that they if you want to order
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  coffee, there is no human person for you to order from.
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  You got to order it from the app.
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  So the whole front liner team is only turning to people who make
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  coffee and people who serve. There is no people who take take
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  your order because you should be able to do that yourself and you
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  know what you want best. And you don't need a person
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  doing that. Whereas the person serving you
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  will be doing all the extras for you as they serve you.
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  So you see, like Heidelow is doing, he's using experienced
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  creators. They're hiring experienced
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  creators. And you see, like in talking
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  about technology efficient way to, to, to, to quicken
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  frontliners to work on. And then we look at Zara and
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  Trader Joe's and they are they are now hiring for personality.
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  So staff are encouraged to recommend products, they open
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  samples, they talk to customers like they're food bloggers, you
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  know, so this kind of stuff, which is insight generators,
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  they're using the cut the, the, the style first.
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  Hey, I give you insight, I recommend things.
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  I'm actually your your key opinion consumer too.
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  So this actually changing the way we are looking at
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  frontliners and the way we are hiring.
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  So I think that's amazing that that's something we need to look
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  at. Yeah, OK.
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  I love it. Interesting brief coming back to
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  you. That's a little while ago.
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  Recently we've been at travelling so much.
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  I don't know where I've been the masters a while I've been in
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  India and I got invited to speak with the retailers associated
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  with his Retail Association of India's Leaders Forum.
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  And I got to meet the who's who of retail from Reliance to Tata,
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  all of these, you know, the Flipkart, all these amazing
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  brands. And what was really cool about
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  the experiences I started, I got out and about and threw it
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  around Mumbai. And I started to get a feeling
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  of why India is surging so quickly.
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  So I was in China in 2002. And when I was there, it was
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  incredibly poor. And, and China in the last sort
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  of 20 years or so has gone through this amazing evolution.
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  And, and so it, China contributes 27% of the world's
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  growth in terms of GDP. It's, it's, it's enormous in
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  terms of India, it's China has slowed down because it's
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  matured. Yeah.
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  Whereas India is basically, I reckon 5 is into that, onto
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  their wave. It is just exciting and
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  accelerating. So India's growth is operating
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  about 6.5% in GDP. So it's going absolutely
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  bonkers. It's contributing about 10% of
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  the world's growth. But what you're seeing in India
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  now is what happened in China 15 years ago, I reckon.
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  And so if you're in your, if you're starting your career, if
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  you're 25 years old and starting your retail career in India, I
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  don't think there's any place else in the world you would want
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  to be, right. So, you know, and, and I keep, I
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  keep having little trying to work out what are the big
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  telltale signs about what's the exciting growth.
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  And the only thing I can get to you right now is this lack of
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  margin pressure in their businesses that we all feel in
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  the rest of Asia Pacific. Yeah.
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  And we and, and the thing that came down to me was now I looked
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  at the thing we're all selling spare inventory in our
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  warehouses, last mile delivery, but going hard at retail media.
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  And I was, I looked at India and I went, you know what, we're
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  China's $40 billion US in retail media.
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  India is 3. It's not obviously half of that
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  is, well, 60%. Half of that is Amazon and
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  Flipkart. And then the rest of it's driven
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  by the sort of quick commerce guys.
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  But what I'm saying is that this, we're not seeing any in
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  India. We're not seeing the margin
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  pressure like we're seeing in other parts of the region
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  because growth is just explosive.
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  And it was only that I went to see it and understand how people
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  were living and how they were shopping.
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  And I went, you know what we are just watching in the next wave
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  and China's coming off and India's coming on and it's
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  coming on fast. It's it's bloody mind blowing.
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  I was like, I was like, this has been the best week of retail
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  immersion I've had for. And I've got to say thank you to
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  Kumar, who's the CEO of the Retail Association of India.
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  Because I realised now, you know, this is a market that
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  we've all got to take notice of. Perfect.
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  Got you back to you, you. Yeah, it's Ramadan Kareem now
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  where all the Muslims are fasting and very soon ideal
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  Fetri is going to be I think about end of this week now
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  festivals or season like the celebrations used to be driving
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  retail. But I want to say that today
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  food, hospitality are the one that is driving festivals and
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  then driving celebrations. And then retailers who
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  understand this will then definitely own the biggest share
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  of how all this festive spending is going to be.
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  So now if you think about it in in the Middle East is a lot more
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  hospitality driven, so a lot more eating, a lot more
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  gathering together with family. And so what's change is that
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  fashion launches are paired with festive dining experience.
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  So the picture that I sent over earlier is actually, she's a
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  very famous Isaki Souza is a very famous comic illustrator.
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  And as an illustrator, we've gotten her to work together with
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  us on clothes, but also her work then yeah, OK.
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  And then yes, yes, that's her. She's very young.
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  She comes up very trendy. And immediately most of her
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  stuff are like, snapped up immediately.
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  She likes to draw big, very, very gigantic big lips on all
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  her comics and all her illustration.
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  And this then is imprinted onto like plates and the things I use
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  for dining wares, premium food day.
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  So it's not just one thing now, it's the whole conceptual, the
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  whole lifestyle, the whole festival, the whole celebration
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  of it becoming a larger economy on its own.
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  And coming years it is going to be sharing the same period as
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  Luna New Year. So you have Luna New Year and it
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  collapsing and falling at the same time.
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  So imagining that now is going to help tailors figure out what
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  to do in the future. So you start for the what, on
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  the 18th of March, doesn't it this year?
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  So, so is that. So we'll see this really start
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  to explode then at the end of Ramadan.
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  Yeah. So you will, yes, correct.
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  You will actually see more and more of this happening, the
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  cross Lunar New Year as well as it happening more and more in
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  the coming years. By the third year from today or
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  the second year from today, you will see it collapsing as one.
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  OK, wow. OK, that's a big call.
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  Wow. Awesome.
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  It's exciting, right? Final one from me.
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  Shame buggy but. Also shameless.
• 13:41
  Shameless. Yeah.
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  So obviously we run the retail news start and you can get your
• 13:46
  NRF AIPAC tickets there, by the way.
• 13:49
  That's good. But we run some research.
• 13:53
  We have come up with an AI glossary.
• 13:55
  The bits are we came up with 94 retails.
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  We. Love it.
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  Right. Or to do thing we want to get to
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  100 because obviously from a marketing perspective.
• 14:06
  I have good. Looks states domain is.
• 14:08
  Prospects, but we could only find 94 so that if you have yes,
• 14:13
  sorry if it's not there, send me a little message and we'll we'll
• 14:18
  pop it in here. But you can see anything from.
• 14:21
  It's it's a. It's a comprehensive AI.
• 14:23
  Look what's happening within retail and so.
• 14:26
  Amazing, love it. It's got to be my Bible and
• 14:30
  bring. It back.
• 14:32
  Hopefully you guys will be available next week.
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  Oh, absolutely. So I.
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  Was 10 cups. I can't go to the Middle East at
• 14:38
  the moment, so I'm always here. Alex, don't worry about that.
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  Hey. Look forward to seeing you next
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  week guys. Oh yeah, thanks mate, lovely.
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  See you and take care.