Cost-conscious consumers and e-commerce are key to the 2012 strategy for LookSmart Alterations. Founder and director Abraham Hatoum suggests consumers are increasingly looking for ways to save money and update their wardrobe and says “The up-cycling trend, where consumers take something old and have it tailored to be on-trend or new again is incredibly popular overseas and is significantly growing in Australia.”

At the same time the huge online buying trend has had a significant impact on the business. “Often it is easier and less expensive for a consumer to have an ill-fitting online purchase tailored, as opposed to sending it back overseas to be exchanged or refunded.”

These two aspects are driving the direction of the business, which is also adding dry cleaning and embroidery to its services. “One way of owning this market will be by forming relationships with key online retailers to provide their customers with a service that is affordable and efficient,” says Hatoum.

Q&A with Franchising magazine

F: How exactly will the link with online retailers work?

AH: “The online retail partnerships will involve special offers, developed in line with the online retailersÕ stock and styles, and digital advertising — we will negotiate banner ads and tile placements on our partnersÕ websites and ensure weÕre top of mind with their customer base.

“An online loyalty program will be developed to ensure we can engage in ongoing communications to our new customer databases. There will be geo-location store partnering — when customers buy online through our digital retail partners, they will then be directed to their closest LookSmart store by postcode or suburb.”

F: Can you explain how the corporate client relationships work and how does the franchisee fit in?

AH: “A franchisorÕs responsibility is to work in partnership with franchisees to build their turn-over. For us, this focuses in two areas: local area marketing and support, and the ability to offer single accounting functions to national organisations — corporate clients will be invoiced by LookSmartÕs support office so franchisees donÕt have to chase payments. This integrated accounting system also allows our franchisees to see payment status so there is transparency for all stakeholders.

“Corporate client relationships drive business into stores, creating an opportunity to grow the corporate clientÕs employees from business-to-business to business-to-consumer customers. Through local area marketing inclusive of bounce-back vouchers, our franchisees are able to retain these customers. Essentially, one customer from a corporate client can be retained for 30 to 40 personal transactions over the average consumer life-cycle of six to eight years.”

F: Expansion has traditionally been through existing employees — will this continue?

AH: “We have no doubt these will remain the majority of our franchisees as they are part of our core operating model and this strategy has served us well so far.

“We know that as a growing business we need to continue to adapt our strategies as the market evolves. We will look for and develop other franchisee models to support our changing business and the economic environment.”

F: What about overseas expansion, where next?

AH: “We are continuing to grow our NZ business and have recently opened a store in Botany Town Centre in Auckland, bringing our NZ store numbers to 19. We are on a natural growth-path to launching in Europe over the coming years. Our CEO was recently in Europe researching the market.

“While overseas is a logical next step, the stability of the global economy will dictate our roll-out timelines.”

LookSmart Alterations

• Annual turnover: $28 million +
• Goal for 2012: continue growth at 10%
• Expansion plan: 1000 stores globally by 2020
• Corporate clients include: David Jones, Myer, Roger David, Sass & Bide, Tarocash and Virgin Australia