E-Commerce success is the payoff for infrastructure investment, says Premier’s Mark McInnes

Premier CEO Mark McInnes says the company has been reaping the payoff of its big e-commerce investment in IT and logistics.

The Australian's Eli Greenblat in conversation with Premier Investments' Mark McInnes at the 2020 E-Commerce Summit.

Premier Investments chief executive Mark McInnes, who oversees a stable of some of Australia’s most popular fashion brands such as Just Jeans, Portmans and Peter ­Alexander, has attributed the company’s success through COVID-19 to its extensive e-commerce infrastructure.

That infrastructure, in which the company has invested heavily, ranges from owning its distribution centre to controlling fashion photo shoots.

Mr McInnes said retailers could only cope with the huge volumes of online shopping triggered by COVID-19 if they had sufficiently invested in their e-commerce infrastructure.

That meant not just owning the actual fashion brands, but the ­entire infrastructure, from the photos of clothes taken for the websites, to the distribution centres and the use of technology tools that can monitor and predict shopper behaviour as they flip between smartphones and laptops.

At The Australian’s E-Commerce Summit on Thursday, Mr McInnes said Premier Investments had invested in its own photo shoots to ensure it could ­curate the best pictures of its fashion for its online store, delivering the best possible shopping experience on smartphones, laptops and other devices.

“One of the investments we made quite a few years ago was to curate the product photography to ensure that the photography of the item can show you the detail online, even on a smartphone,” Mr McInnes said.

“So we invest in talent; we shoot all of our fashion; we shoot four to five shots per item so when you go to an item on our website, you can actually see four to five angles of the product, zoom in, zoom out.”

Chaired by billionaire retailer Solomon Lew, Premier Investments also decided six years ago to spend more than $20m on building its own distribution centre near Melbourne. The move was criticised by some analysts at the time, but Mr McInnes said it was now paying dividends as e-commerce boomed.

Owning that infrastructure made it possible to keep up with demand when COVID-19 hit, he said.

For Premier brands such as sleepwear label Peter Alexander, in the week ending May 2 when all of its stores were closed, online took 18.9 per cent more in sales than for the same week in 2019, when all stores and online orders were open.

“You only get that result if you have built the infrastructure that can cope with the customer volume to the website and when you have got the backend logistics infrastructure to support it,” he said.

“And because we had both in place, and because we had made those investments over the past 10 years led by Sol and the board, that enabled us to deliver a second-half winter 2020 with 70 per cent growth where online contributed over 25 per cent of our total sales.

“We own 100 per cent of our brands and therefore the full vertical margin stays with us.

“We have made significant investments led by Sol and the Premier Investments board right across our business, including world-class customer-facing websites, a significant investment in IT infrastructure technology to grow as demand grows, a fully integrated supply chain, so 100 per cent of all the inventory in Australia comes into that centralised distribution centre for both stores and online.”