Cotton On’s plans to take on Amazon Australia
COOPERATE or compete? It’s a question weighing on local retailers after Amazon’s roll out in Australia. Fashion house Cotton On looks set to compete against the online goliath.
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COOPERATE or compete? It’s a question weighing on local retailers after Amazon rolled out its full offering to Australian shoppers.
Global fashion house Cotton On Group is one of the few Australian retailers to have first-hand experience — through its stores in the US and Britain — operating in a market where Amazon has a mature business.
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The Geelong-based fashion empire, which operates 1500 stores across seven brands in 19 countries, overhauled its online business ahead of Amazon Australia’s launch last month.
The revamp brings together the bulk of its brands under one group website and, of ever-growing importance, gives it a mobile-phone-first emphasis.
Cotton On has also launched its first loyalty program in order to make better use of a customer base running into the millions, widened its “click and collect” service and signed up as a founding member of Australia Post’s “Shipster” service covering deliveries for a set monthly fee.
All of which indicates that Cotton On, which has trialled selling products through Amazon in the US, will be choosing to compete against the online goliath — in Australia, at least.
“We will consider all options,” Cotton On Group e-commerce general manager Brendan Sweeney tells Business Daily.
“Does it make sense depending on the size of the market place? Is it a good destination for our customers?
“Is it going to bring us incremental business? Does the commercial case make sense?”
Mr Sweeney points out Cotton On sells though various online fashion platforms in other markets.
Its Asian arm taps South East Asia’s largest online fashion platform Zalora — the Asian equivalent of The Iconic — while in South Africa, its products are available through local fashion focused marketplace Superbalist.
But Mr Sweeney notes Cotton On is no longer using Amazon — which sells everything — in developed markets such as the US.
“What we learnt out of that is that going to a destination fashion marketplace that has the right demographic of customers and where we can showcase our brand properly is a better fit for us,” Mr Sweeney says of the group’s experience of selling through Amazon.
While Cotton On is focused on creating its own online marketplace — and leveraging a customer database it is only in the early stages of mining — Mr Sweeney says Amazon will be good for Australian consumers.
Australian retailers have already upped their game, with JB Hi-Fi introducing three-hour delivery, Woolworths rolling out click and collect nationally and Myer launching its own online lifestyle marketplace.
Mr Sweeney argues it will also put pressure on logistics companies to improve their service.
“They (Amazon) will help everybody sharpen up their act and hopefully drive an improvement in some of the delivery and logistic operations around the country as well,” he says.
“They will definitely get more people in Australia to become regular online shoppers and that increases the market for everybody.”
The move to overhaul Cotton On’s online offering is its most significant investment in its e-commerce business to date.
It is testing the new offering — housed under the Cotton On & Co label — in various markets around the world.
The New Zealand site houses all of its seven brands: Cotton On, Cotton On Body, Cotton On Kids, Typo, Rubi, Factorie and Supre.
The last two brands — Factorie and Supre — have remained under stand-alone sites for its Australian offering although that decision is under review.
“We have a reasonable business on the Supre site so we will tread carefully and understand what customers are telling us,” Mr Sweeney says.
“We are always testing and learning.”
The group — launched by entrepreneur Nigel Austin, who started selling acid-wash denim jackets from a car boot at a Geelong market in 1991 — has also launched its first loyalty program, which allows members to earn and redeem points across all its brands.
“Loyalty for us is the big unlock,” Mr Sweeney says.
“As we roll out our loyalty scheme globally, that will give us very mature multichannel data and allow us to be far more targeted in our approach to customers.”
Making the site user friendly on a mobile phone was also a key aim with 60 per cent of Cotton On’s online sales now coming from mobile phones.
“Australia pretty much leads the world on mobile penetration now,” Mr Sweeney says.
“It’s definitely overtaken desktop. Traffic was always higher on mobile but the challenge has always been getting the shopping experience to work as well on mobile and improving your conversion rate.”
Cotton On puts its new online marketplace through its paces during the Black Friday and Cyber Monday shopping events in late November.
The US shopping events, timed around Thanksgiving, are gaining traction with Australian shoppers. Cotton On’s web traffic was up 60 per cent this year compared with last.
It recorded 3.2 million individual sessions, selling 994,000 products with personalised Milo tins, Christmas Cards, calendars and towels big sellers.
Mr Sweeney says the results have more than justified Cotton On’s new focus on online with the site’s conversion rate — the number of customers moving from browsing the site to making a purchase — up 20 per cent.
“Quite a lot of that was around making it easier and faster for the customer to connect with the product,” Mr Sweeney says.
“We’ve simplified the navigation quite a lot, increased the subcategories and done a lot of work testing the user experience.
“Rather than being one big thing, it’s the combination of 200 or 300 little things.”
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