How are Australian franchises facing up to the challenges of the retail revolution? We put Battery World and Beaumont Tiles in the spotlight.         

“Australian retailing is in a very exciting transformative stage at present. The underlying fundamentals of the Australian economy are incredibly robust. The emergence of e-commerce highlights opportunities to engage and interact with customers as never before.”

That is the view of Battery World general manager Rowan Hodge. 

“Increasingly empowered customers are also brutal to retailers who fail to meet their expectations,” he says.

Bob Beaumont, founder and franchisor at Beaumont Tiles, reports a mixed trading landscape in retail. “It’s a bit patchy from state to state but generally the business is there for the good operators,” he says.

“The strength of the building industry has helped but equally so has increasing willingness of the market to be adventurous in their decoration of their new home or renovation. 

“As Beaumont Tiles is an aspirational brand specialising in innovative decorating ideas this has made our brand more appealing in the market,” Beaumont says.

Technology naturally drives the battery industry. But Hodge attributes the real power elsewhere. 

“The real engine room for our business is our franchise community. Only through providing truly reliable and trustworthy advice, products and services for many years has Battery World achieved its highly enviable position in the Australian retail landscape.”

Battery World franchisees face similar challenges to most retailers with rising utilities. In recent years, software costs have also risen sharply, Hodge reports. But these costs have been offset by a $1m investment from the franchisor in the NetSuite retail management system (RMS). 

“The greater cost challenge is to remain undistracted by costs in our mission to invest in training. The Battery World unique selling proposition vests in our extraordinary product knowledge. In 2015, the franchisor has created four extra full time resources to support the training of the franchise network.”

Cost of goods is of course the “Pachyderm  in the room” suggests Bob Beaumont. “This is being driven by the dramatic decline in the value of the Australian dollar resulting in a huge cost of goods increase which is very difficult to fully pass onto the market used to lower prices. This puts pressure on margins.”

So what have franchisees needed to do differently to boost their businesses?

The answer is simple – and yet not so simple. 

“There is no magical method to suddenly become a successful retailer that we are aware of. What we have done is to truly provide expert advice,” says Hodge. Any business can price match a product. The right business can instead get you the right solution at the right price. Quality is so important when dealing with batteries and power solutions.

“The highest volume Battery World stores attract some new customers through their marketing and strive to never lose a customer, ever.”

In the Beaumont Tiles business the focus has been on meeting the more demanding and sophisticated expectations of today’s d_cor-savvy consumer.

Beaumont says “Our shops have embarked on a big comm-itment to upgrade shops to appeal to the higher expectation of the market place. 

“We have also needed to upgrade the range to cater for the innovative public attitude driven by such programs as The Block and House Rules.”

What do you think is the future for retail?

Bob Beaumont has been in the tile business for more than 40 years, working in the family business that now brings in more than $200m a year. Now we’re on the edge of a technological revolution he says.

“Retail is in a huge state of change. We are only seeing the beginning of the internet revolution. We have already seen some types of retail become virtually extinct overnight due to online purchasing. Fortunately some products are more resistant than others to inroads of web sales, tiles and bathroomware being among them. 

“Technology also enables us to be innovative in-store, en-hancing the experience and ideas we offer to our customers. 

“Retail has been cyclical, experiencing ups and downs, since the beginning of time. Successful retailers thrive in the long run because they respond to their customer needs,” he says.

Battery World’s retail strength lies in responding to a changing world where people need to be continually charged. 

But again, according to Rowan Hodge, the successful retailer has a role to play beyond the simple supply of relevant products.

“Future trends in e-commerce, payment methods, marketing or salesmanship will always be relevant, but they will never replace the desire of Battery World customers to rely upon the expert advice they receive; to be treated with respect; to enjoy high levels of customer service; and to trust the handshake (and warranty) of the local owner in a bricks and mortar business. 

“Retail will continue to be strong with consumers who want and expect this service.”

How are businesses adjusting to suit this future? 

Like any retailer, Battery World is not immune from new customer preferences. One of these is e-commerce and the chain is embracing this in 2016. 

“Our greatest care will be taken to make sure that no new customer touchpoint is ever brought to market in our business if it erodes in any way our unique selling proposition (USP). That USP is the delivery of extraordinary product knowledge to solve customers’ problems.”

Battery World is so confident in its bricks and mortar retail model the franchisor signs the head leases for new and existing sites for 12 years. 

“As a customer e-commerce doesn’t provide  expert advice and the right solution for your specific needs.”

Bob Beaumont insists the tiles business been for years an early adopter of technology. “We continue to be on the front foot, adopting the best from the computer industry but also developing our own specialist tools in-house,” he says.