School uniforms, Amazon and no self-serve check-outs: Best&Less’ plan to take on Kmart

THEY’VE become ubiquitous but the head of one of Australia’s largest retailers has explained why he will never install self-serve check-outs.

THE boss of one of Australia’s largest chain stores has said he will buck the retail trend and refuse to install self-serve check-outs saying the till technology drives him “insane”.

Rod Orrock, the chief executive of Best&Less, told news.com.au that customers valued staff interaction and it wasn’t fair for shoppers to “do the retailers work”.

Mr Orrock spoke as the budget fashion brand announced a new weapon in the battle against retail heavyweights Kmart, Target and Big W — the humble school uniform. He also said that far from fighting new kid on the Australian retail block Amazon, Best&Less was actually trialling a plan to get into bed with the US online shopping giant.

Best&Less is using school uniforms in an attempt to wrestle Kmart’s retail crown.

Next week, the vast majority of Australian students head back to school — that means it’s going to be busy weekend as parents snap up everything from shoes, to shorts and stationery.

According to Heritage Bank, families of primary aged schoolchildren spend at least $600 on back to school items; around $250 simply on uniforms and shoes for each child.

“Back to School is a significant spike for apparel retailers and it happens at an otherwise quiet time of year,” said Mr Orrock.

The budget retailer, formed in 1965 in Sydney’s CBD, is leading the charge against the big names with uniforms for under $10. For that you get shorts for $6, socks for a $1 a pack and polos for $2.75.

Mr Orrock said he hoped a 100 day guarantee and the ability to take purchases away and pay for them later, a kind of lay-by without the wait, would win over shoppers.

He also hit out at schools charging over the odds for uniforms or directing parents to recommended, but pricey, shops.

Best&Less Chief Executive Rod Orrock says mums rule the roost when it comes to his shops.

“Why should I pay $25 to my school for a polo just because it has a printed emblem? That shouldn’t make it 10 times more expensive. For people on lower incomes they may choose another school if they can’t afford the uniform costs.”

Research in 2017 by FieldAgent, a consumer insights data company, found 71 per cent of parents headed for uniform shops at the beginning of the school year followed by Kmart at 41 per cent.

A third of parents headed to Best&Less for school clothing but that was still less than the number of parents who head to Big W or Target.

“Kmart is an extremely good competitor and we’re sensitive to the price pressure they bring. Maybe we see Kmart like the Australian Democrats; they keep the rest of us honest,” Mr Orrock said.

$2.75 polo shirts are Best&Less' big weapon in the Back to School retail war.

But despite Kmart’s resurgence, sales at the chain rose to $1.4bn in the first quarter of the 2018 financial year; Mr Orrock was bullish about Best&Less’ prospects against its larger domestic rivals.

“We can prosper against the likes of Kmart and Big W, absolutely, we’re part of a global apparel business that’s much more significant in scale than Kmart or Big W,” he said.

That global business is the German listed, South African-based company Steinhoff.

In Australia, Steinhoff employs 10,000 people and owns other big retail brands including Harris Scarfe, Fantastic Furniture and Freedom.

Best&Less is part of the same South African run group that owns Harris Scarfe and Fantastic Furniture.

But Best&Less’ owner is in a world of pain. At one point late last year, Steinhoff’s share price sunk by 80 per cent following the discovery of accounting irregularities that led chief executive Marcus Jooste to resign.

The Australian business has taken on external legal and business advisers which some have interpreted as the precursor to a sale to help its parent group out of the mire.

“Best&Less is trading extremely well, we’re a profitable business,” Mr Orrock said.

Indeed, last year the Asia Pacific arm, which includes all the Australian brands, reported a rise in sales of 3.1 per cent in the 12 months to November 30.

Will the brand be here in a year’s time? “We’ll be here in a year, in 10 years, clearly market forces change but I’m not concerned about the future of Best&Less,” Mr Orrock said.

But one thing that won’t be in Best&Less in a year is self-serve check-outs.

Rod Orrock says he is not a fan of self-serve check-outs and will not be installing them in Best&Less.

First appearing in supermarkets, they’re now found in Best&Less’ discount department store rivals. In the US, retail mega chain Walmart is reportedly close to ditching cashiers in 100 stores.

They don’t impress Mr Orrock. “Personally, it drives me insane when I turn up to the checkout with a full basket and I have to do the retailer’s work for them,” he said.

“Check-outs are a key touch point between customers and the company, they can come with their questions and talk to our staff and I think that’s really important.

“It doesn’t make sense; I’m not a great supporter of [self-serve check-outs]. We’re committed to providing our customers with a person, face-to-face, to assist them.”

Mr Orrock claimed his customers weren’t clamouring to scan their own shopping.

“Our customer is mums and families and our challenge is to remain relevant to her,” he said.

“Not to stereotype but the great proportion of people who come into our stores are mums, they have the responsibility of managing the family budget. Men would be lost without them.”

The effect of new online entrants, such as Amazon, has focused minds at the retailer.

The chain is keen to wrestle market share from Amazon. Picture: Nicole Garmston

While the US company’s newly launched Australian website is majoring on school stationery, Mr Orrock said parents were still keen to touch and feel clothes purchases and let their kids try them on.

Best&Less has a transactional website but they are considering working with, rather than against, the Amazon juggernaut.

The store is about to trial selling some products through Amazon’s Marketplace portal, a favourite site for small businesses.

“As a retailer we need to be where our customers are. So, just as we are in Westfield and Stockland we want to see if the traffic is there on Amazon Marketplace permanently and if it is, it makes sense to be there.

“I’m confident we can compete and win,” Mr Orrock said.

A few $2.75 polos scanned through the manned check-outs this weekend would help in that quest to win over Australia’s mums.