Betta Electrical shares tips on standing the test of time in franchising
When the BSR Group started as an alliance of electrical retailers 50 years ago the landscape was vastly different
Take a trip back to 1961. Television was black and white, it was still a relatively new phenomenon, and the choice of electrical appliances was considerably less than the range available now. The challenge of building a business as an electrical goods retailer might seem today, from the landscape of a highly charged competitive arena, a simple matter of plugging into the trends for new and exciting products. After all, the 1960s was to be a decade of increased freedoms and greater leisure time. An individual retailer could service this lifestyle, establish a local trade, and build up customer loyalty for service and product variety and reliability.
But it is the mark of a good business person to spot the challenges ahead and implement strategies to overcome them. And so it was with the founding of the Brisbane Electrical Television Traders Association (BETTA), started in 1961 by seven local independent retailers to combat rival electrical retail groups already in existence. Retail stores were, and still are, individually owned: ‘the person who owns the store, runs the store’ is a succinct description of the group’s origin.
Today close to 70 percent of the group business is driven from regionally based operators and the group is a national franchisor, with a mission to assist franchisees in maximising their customer offer, and to deliver support to franchisees to allow them to compete in a progressively competitive marketplace. Providing an all-inclusive, comprehensive service is key to this.
BETTA went on to become BSL (Better Stores Ltd), a business that serviced both Betta Electrical branded and non-branded independent retailers throughout the 1990s. But the road to a half century of trading has not always been smooth, there was a major bump in late 2006 when BSL was placed in administration. As a result, both profitable retail outlets in the group, and the brand itself, were the subject of vigorous bidding from several consortiums and industry competitors.
The successful bid was put in by 48 member retailers who acquired their own brand, and formed a new company, the BSR Group. Out of this, BSR Australia Ltd was created to meet the buying and marketing needs of the Betta Electrical stores nationally.
Forward lookingThe new company saw the importance of reinvestment in the infrastructure, support and services delivered to member retailers and adopted a lean, low cost operating structure that allowed it to provide a stable operating platform for members, and establish a high level of profitability to its shareholders. Achieving these twin goals took just 12 months, and the company continued to out-perform industry expectations.
Earlier this year Graeme Cunningham was appointed CEO, and under his stewardship BSR joined the electrical industry’s largest retail group NARTA (National Associated Retail Traders of Australia).
NARTA has 32 Australian and six New Zealand members, and a buying power of more than $3 billion; brands already in the group, formed in 1965, include JB Hi-Fi, Bing Lee, David Jones and Radio Rentals.
Membership of this will allow the company to build on the significant turnaround in business achieved over the past decade, Cunningham predicts. “The NARTA alliance will deliver a range of exciting opportunities for our retailers and franchisees who will be able to tap into the group’s marketing prowess, supplier relevance, operating efficiencies and procedures,” he explains.
“Alongside the numerous benefits our existing retailers will access as NARTA members, our Betta Electrical brand offers our industry’s small and medium sized independent retailers a profitable and viable home.”
The strategy includes regional and metropolitan growth, and it is in part the regional heritage that has helped the brand reach five decades of trading. The relationships of member retailers across the network, and an ability to adapt to changing environments and technologies are also key to the group’s survival, believes Cunningham.
Introducing new product lines, such as the furniture and electrical brand Betta Electrical Home Living, and implementing new methods of trading such as the e-commerce site recently launched have distinguished recent business activity.
E-commerce and online strategy is set to play a key role in the Betta Electrical brand marketing mix, reports Julieanne Worchurst, BSR Group marketing manager. “E-commerce will certainly prove fundamental for the ongoing development of retailers within our industry,” she says. SMEs within the industry, especially those based within regional areas have lagged behind in their adoption of e-commerce, Worchurst suggests. The new model, online engagement and e-commerce offers Betta Electrical enormous benefits within three key areas: logistics and admin systems, supplier partnerships and direct sales and marketing.
Cunningham says the team is focused on fulfilling these objectives and enabling greater customer engagement through e-commerce. “It is an easy, convenient way for our time-poor customers to shop in the comfort of their own home. We believe it will work very well side by side with our traditional franchise stores, which will provide customers with the opportunity to touch, feel and hold our products and experience our friendly, personalised service.
“The customer bases for the traditional stores and online stores may have come to us via different needs, however we are engaging them through an omni-channel marketing strategy.”
Cunningham stresses that business expansion includes further bricks and mortar stores. And the store network will benefit from technological tools such as Betta Electrical’s retail management program, the IbGlobal System developed by the BSR Group. Retailers rely on this tool on a day-to-day basis; it allows them to access up-to-date information on inventory, pricing components, supplier and customer accounts and ordering systems.
Says Cunningham, “It is an open doorway of communication between head office, retailer and supplier. It also enables the retailer to produce reports based on daily intake, management, operational based duties and daily tasks. It runs alongside staff as the main heartbeat of the business.
“The retailers solely rely on the Retail Management System to run and objectify all tasks and movements as a business. All incoming business will run directly through this channel. The system allows the retailers to track and utilise new data and also run comparison to the percentage of new business enquiry captured by the retailer.”
As the BSR Group embraces the technological challenges and opportunities of the retail world today, Cunningham sees continued flexibility and an openness to new ideas as fundamental to any individual’s success in business.
Deputy chairman of the group, and franchisee of two Betta outlets in Bateman’s Bay and Ulladulla, Domini McClelland, can attest to this, but is also adamant that technological advancements and the rise of online shouldn’t drown out good face-to-face customer service.
He sees Betta’s new online presence as an important and necessary step forward, but only if it forms part of a wider, more comprehensive strategy to provide exceptional service regardless of the shopping medium.
“I’ve got a personal view that a lot of the online business that’s growing at the moment is purely because of retailers not looking after their customers. People are sick of being treated badly and online is probably a good alternative because people know what treatment they’re going to get from a computer. I think we’ve got ourselves to blame a little bit for some of the growth of online.”
Betta’s online tagline is ‘shop online with people you know’ reinforcing to the customer that the service and reputation they they’re familiar with instore will be carried through online. “We see it as more inline rather than online because we believe that’s the strong future for our industry — for those retailers out there to offer the full fleet of services to their customers, so they’re not just offering them customer service instore, but online as well.”
McClelland says that even if a consumer makes a purchase online, they will still be contacted by a bricks and mortar store, either with a confirmation email or phone call, when the product is delivered, or when the customer goes instore to pick it up.
“We all sell the same boxes. It doesn’t matter if you go to a Harvey Norman or a Betta Electrical, it’s pretty much the same products that we’re all selling. I think it’s just the delivery of that service that makes the difference and I think that’s what’s helped us survive 50 years.”