With a new CEO on board and a number of customer service-based initiatives in the pipeline, The Iconic remains a force in the apparel retail field.
After blasting onto the Australian retail scene two years ago, Rocket Internet-backed pureplay The Iconic has seen its fair share of success and criticism alike. In winning the hearts of local consumers with savvy marketing in both online and off, and speedy delivery times, the brand has been questioned by some industry experts for spending more funds than it can ever hope to recoup.
Since launch, The Iconic has taken on almost $100 million in funding, with the most recent investment of $20 million coming from a group of global investors including the privately held Access Industries, owner of Warner Music Group (among others), and US asset management firm Scopia Capital Management. These heady numbers have certain analysts in a spin, but for the leadership team it’s all par for the course.
Following the exit of Co-founder and Director, Finn Haensel earlier this year, The Iconic has since gained an e-commerce experienced CEO in Patrick Schmidt.
Patrick Schmidt: CEO Profile
Of German origin, Schmidt cut his teeth in marketing and advertising in Hamburg during the peak of the first dot com boom, before returning to university in 2001. Following the completion of his studies Schmidt secured a role with Boston Consulting Group (BCG) where he began to develop a taste for travel and work overseas.
“This has become something of a trend in my career, as most of the projects I worked on with BCG were international,” Schmidt says. “I worked with BCG for five and a half years before receiving a call from Oliver Samwer, who was leading Groupon‘s international operations at the time.”
Samwer, who later went on to co-found Rocket Internet, offered Schmidt an opportunity to introduce Groupon to Australia.
“I thought it was a little crazy to start a company on the other side of the world, but I had some previous experience of Australia as a backpacker in my mid-twenties and there was no way I could turn the offer down.”
Schmidt’s reputation grew in parallel with the quickly expanding group buying market in Australia, and it wasn’t long before his talent saw him landing a job as CEO of Groupon in Latin America, which he held for two years – but it wasn’t long before he saw an opportunity to return Down Under.
Now, as CEO of The Iconic, Schmidt has a wealth of e-commerce experience to continue to move the business forward, and he says he has a clear vision he intends to execute to ensure its long-term success.
“I have very specific ideas on how The Iconic should move forward, however I think these ideas are mostly in-line with what Co-founder Adam Jacobs and the other senior leaders in the organisation think,” Schmidt says. “Many of the plans I’ve been thinking up have already been tested by the team at The Iconic – it’s more a matter of prioritisation. I will continue to build the business based on what the team as achieved so far, and they’ve achieved a lot in two years, but I do have my own thoughts and visions for the company regarding what we need to bring to life in the next few years.”
Adam Jacobs, Co-founder and Managing Director of The Iconic, says that Schmidt is already an integrated part of the team.
“I think Patrick’s style complements the existing culture of The Iconic, not only in the broader sense but also among the leadership team, which is really important. I’d say that stems from his experience in e-commerce and understanding what the online customer is really looking for, which can also be put down to his experience at Groupon in understanding how to drive a fast-growing organisation for a particular market.
“He and I have a shared vision of what kind of offering we want to build, what kinds of customer experiences we want to build, and we’re working really hard to make that vision a reality,” Jacobs says.
Ensuring Repeat Customers and Increased Word of Mouth
“The number one principle in retail, whether it’s The Iconic or Groupon or any other business, is offering exceptional customer experiences,” Schmidt explains. “That may sound very simple and generic, but that can be translated into a variety of ideas and a business could continue to innovate and implement initiatives in this direction an infinite number of times. You can always do more to make the customer happy.”
In this sense, he says, The Iconic is already off to a great start with its ability to offer overnight delivery to the majority of its local customers and three-hour express shipping for Sydney metro. He also highlights their customer service team that is available around the clock.
“But to be honest, we can still do more,” he admits. “We’re considering how to expand our three hour delivery, offer more targeted delivery such as we have with our Christmas delivery guarantee and our new partnership with ParcelPoint, allowing customers to have parcels shipped to a pick up location other than their home.”
The Iconic’s Christmas delivery guarantee means the majority of Australians will be able to place an order right up until the 24th of December and still expect delivery on the same day. Meanwhile, the new partnership with ParcelPoint allows even greater flexibility in how customers receive their purchases.
“It’s these kinds of initiatives that will continue to drive customer satisfaction and therefore word of mouth. This basic tenet of retail will ensure we get return customers as well as new customers,” says Schmidt. “In-principle, this is as true today as it was 200 years ago.”
Three Retail Trends Worth Watching
While Schmidt is the first to admit he isn’t a retail expert per se, he has seen plenty of retail and e-commerce businesses in action during his time with BCG. Further, his time at Groupon – particularly in Australia – has provided some insight into the significant trends that concern local retailers.
“The biggest trend is in the growth of mobile, which is far from being a secret in the industry,” Schmidt says. “I think what people need to keep in mind when strategising for mobile is that you’re can’t think of it as ‘just mobile’. There is a whole range of devices, brands and models to consider within mobile, so it’s important to go a level deeper when analysing retail data in order to discover whether customers are using tablets versus smartphones, or a specific OS.”
The Iconic appears to already be making good on this trend, with an iOS application that has appeared in the top ten apps of the Apple App Store for most of the time since its launch, now approaching 200,000 downloads.
Sales via the mobile channel now make up 30-40 percent of The Iconic’s total sales, whether from in-app purchases or via the company’s mobile website, Schmidt says.
“Tablets are worth paying close attention to as a result of their hybrid quality, sitting somewhere in-between a laptop computer and a smartphone. People behave differently on tablets than they do on their smartphone or their computer, so it’s definitely something to keep a close eye on.”
Schmidt also highlights the fluctuating evaluation of the Australian dollar as something local retailers will be paying close attention to.
“I’m not an economist, but my understanding of the issue is that many retailers believe a weaker Aussie dollar will work to strengthen their own position in the global market. We’ve seen some of this already in 2013, so I hope it does continue into next year.
“This also relates to the increasing expectations that local consumers have regarding delivery,” he says. “As a domestic retailer, whether you’re a pureplay or multichannel retailer, you have an advantage here of being in Australia and having much more direct access for communicating with your customers to ensure you can meet their expectations.”
While this means faster, cheaper delivery for online businesses, multichannel retailers may have an advantage in being able to offer ‘click and collect’ as a point of difference. It’s for this reason that Schmidt is confident that many domestic retail operations will be looking on 2014 with great optimism.
“I think the Australian consumer will continue to demand more of their local brands and so we’re looking to invest heavily in this area in the coming year. In this sense, we’re confident in our own offering going into the new year, but we’re also fairly bullish about the whole domestic retail industry as we move into 2014.”
Investing in an Iconic Brand
The Iconic’s new CEO seems well invested in Australian e-commerce, and retail in general, while large international companies appear to be more than happy to invest in it.
“We see our recent funding as a real vote of confidence,” Schmidt says, regarding the recent funding of $20 million. “These investors have been funding a number of renowned ventures in the past decade, so we really see this as an endorsement of our own operations.”
However, coming off the back of regular installation of many millions of dollars, this begs the question whether or not the retailer will continue to rely on regular investments in the future.
“We certainly don’t require further investment in the short to medium term, we’re really focused on improving on our customer experience and day-to-day operations, really,” he states. “If there were more investors like these willing to invest further into The Iconic, we’re certainly open to the idea. A growing retail enterprise is always capital-hungry, so we would always consider an offer, but as I say, it isn’t high on our priorities for now.”
The Iconic’s team certainly do seem to have their work cut out for them in what Schmidt describes as the ‘day-to-day’, with further initiatives planned beyond its Christmas delivery guarantee.
Jacobs tells us The Iconic will be making its first foray into the physical world, which will take shape in the form of a catwalk fashion parade this coming Thursday December 12.
“We’ll be setting up in front of Customs House in Circular Quay, offering customers a chance to parade their favourite outfit from The Iconic and, as a result, we’ll be offering anyone brave enough to take us up on it an on-the-spot refund of up to $300 for their clothes,” Jacobs says. “It should be a very fun event and we’ve invited a few partners to join us, including Revlon, Ben and Jerry’s and Spotify providing the music.”
Jacobs also hints at an announcement for enhanced delivery options to be made for the retailer’s Melbourne market in early 2014. While he can’t say exactly what, we have a sneaking suspicion the update will bring Melbourne’s delivery options more in-line with what is already available for Sydney metro customers – a sure-fire way to get time-poor Melburnians clicking.