John Craig

JOHN CRAIG

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JOHN CRAIG

John Craig Fashions

New Product Ensemble PRODUCTION: Colin Chinery

In an effort to gain market share and reposition the company for future growth, leading men’s fashion retailer John Craig has completely overhauled its product range and reorganised its marketing efforts. The result has been the capture of new customers and an increase in overall sales. Managing Director, Lily Moreira tells us more‌ www.enterprise-africa.net / 3

INDUSTRY FOCUS: FASHION

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‘‘Man at his best’ has received a complete transformation.

Leading South African men’s retailer, John Craig, has been serving its loyal customer base since 1947, but facing a generational switch in fashion trends and a demand for more affordable quality, the company has had to rethink its strategy and come up with a whole new offering in an effort to reach “young, smart, modern customers.” The decision to move from formal to a smart offering is in line with customers fashion needs.

By condensing its brand portfolio, encouraging more traffic through stores, and attracting new customers, John Craig is making itself standout in an extremely competitive environment.

This at a difficult time in the current retail landscape, the bold and brave strategy, has led to outperforming against the odds.

Perhaps one of the most successful turnaround strategies implemented in a retail environment in recent times, John Craig’s exciting new product range and effective marketing plan has seen the company boost sales and get back on the growth path.

“I cannot believe the success we’ve had in the past six months – it’s amazing. The credibility of the name and our heritage have been

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the backbone of our success,” says Managing Director, Lily Moreira.

“Average spend has come down, as we have reduced our prices. Customers are spending less but shopping more frequently. Additionally we have attracted new customers hence why our turnover has grown by more than 20%.”

In January 2016, Moreira told Enterprise Africa that John Craig’s new store growth in SA had slowed and the company was looking to Africa for further opportunity. But today, she says that while Africa is still a target, there are major untapped opportunities in South Africa.

// IF YOU BUY A SHIRT FROM US, IT WILL GIVE YOU 20-30% MORE VALUE COMPARED TO OTHER RETAILERS // “Part of what we want to do in the coming months is review the successes we’ve had and where we could potentially positon stores. We have a lot more opportunity to enter malls that in the past we would have been cautious about because they wouldn’t suit the

product. Primarily we will be looking at South Africa as there is still a lot that we haven’t exhausted yet,” she says.

“We’re in Namibia and after changing our product profile there, we are flying. It’s encouraging us to think about Botswana, and about the rest of Africa.

“With the excitement in the market for our exclusive branded offering, the Muratti brand is gaining a new customer who is proud to wear and show the brand. The brand recall is growing and we are seeing more customers proudly wearing the brand.”

OUT WITH THE OLD… As part of the company’s revitalisation strategy, Moreira commissioned a research project in which John Craig’s customers and offerings were evaluated.

The findings made for a difficult read.

Moreira and the company’s seniors realised that younger customers were being lost to competitors, the product mix was not right, pricing was an issue, and marketing was not bringing results. They also found that certain old fashioned connotations regarding John Craig as a brand still existed. After telling Enterprise Africa about the company’s success through 2015, Moreira was not about to let hard work and a strong market position go to waste. She quickly began planning a new strategy to future proof the business.

“Our research from the last two or three years shows that the reason we were not attracting enough of the younger, more modern customer is that the customer perception was that our product was too old and too expensive.

When you take that into consideration, you have to reposition your product and price, and that is what we did.

“Over the last few years, John Craig has been on a journey to try and modernise its product assortment.

We’ve always been primarily quite niched in a more conservative market from a customer profile point of view.

The basis of the John Craig heritage has always been to offer top brands

JOHN CRAIG

// OVER THE LAST FEW YEARS, JOHN CRAIG HAS BEEN ON A JOURNEY MODERNISE ITS PRODUCT ASSORTMENT // but over the years we’ve been doing a lot of development with the Muratti brand. As we’ve been moving towards the Muratti brand, we realised we need to modernise the product assortment.

Instead of having quite traditional products, we’re going into having more on-trend and fashionable products, but still with the smart look. Around six months ago, we were still very branded, with major international brands like Polo, Pringle, Florsheim and Crockett & Jones which are all applicable to the SA market. Having this massive brand assortment created some concerns.

Our stores are quite small, only around 200 m2 and we were struggling to balance all of the product between all the different brands. Internationally, the development and demand for private label brands is a continuing/growing trend.”

After careful consideration and indepth internal discussion, the decision was made to remove some brands and revamp the product range to focus on fashion, quality and value. The need to encourage more regular purchasing was also a factor and so some formal brands were dropped. This decision took some courage because when you remove some sales you have to be very confident in the value offering behind your product to replace those sales.

“We are a male business, and quality is our number one purpose, we relooked at our product assortment and said ‘we understand that a lot of our brands attract a middle aged consumer, we want to position our business so that it is more attractive to a smart, modern, young customer, that would buy on a more regular basis’. In order to do that, we had to drop some brands, and we dropped quite a significant number of big brands, so that we could reinvest into our product range which we felt was very much designed to suit our modern smart customer.

“We had to drop some formal brands because, how often does a guy need a suit? once every year? or once every five years? But he might buy a jacket more often. We looked at it very closely to work out what Is relevant to that customer base and we’ve built the range around that, always being cognisant of the fact we need to be price sensitive and price competitive in order to claim market share and entice customers.”

A catalyst of this product transition has been the South African economy.

While there is renewed optimism following the appointment of a new President, previous years have witnessed lacklustre economic performance and

GDP growth which leaves much to be desired. A result of this has been a tightening of consumer purse strings and an attitude of purchasing less often and making items last longer. “The consumer in South Africa is looking for value – not cheap, but value,” says Moreira.

“We are saying to our customers, if you buy a shirt from us, it will give you 20-30% more value compared to other retailers. It will have extra buttons, better stitching, and other elements that make it stand out.

“Being on trend means that a customer is looking for a product but wants to update more regularly. We are not talking about high-fashion, we’re

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INDUSTRY FOCUS: FASHION

// WE HAVE NEVER BEEN ABOUT GOING CHEAP – THIS BUSINESS DOES NOT UNDERSTAND THAT WORD // talking about good quality and very smart. We have never been about going cheap – this business does not understand that word, but it’s about value.”

THE SHOP WINDOW After overhauling the product mix and focussing efforts on attracting a new customer demographic, the next stage in the fresh John Craig growth strategy was to market effectively. The message is clear: This is a South African brand, with more than 70 years of history, with a large store network, that understands

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its customers and provides quality, value and on-trend fashion.

“Once we had the product, we had to align marketing and that was about getting feet into the stores. In the last six months, that has been a huge success.

We did a lot of work with the Retail Studio and our own agency, and we have almost reinvented the business.

“Our marketing was about maximising our resources in stores and in windows. We completed a brand wrap in our stores, ensuring that the imagery had the same brand tone throughout – modern-smart. We weren’t scared to call out categories that we felt we were really well priced in, and that we wanted to be famous for. We wanted people to walk in and be pleasantly surprised about prices they were going to pay,” Moreira explains.

The company’s marketing budget was strict and there was no direct advertising but the company did utilise its own window displays to attract

passers-by.

“We needed to grow quite significant volumes and bring in a lot of new feet and we could only do that through our shops. Windows are often under-appreciated as a media channel.

We had a lot of feet walking past but not walking in. Once people started coming in and seeing the prices, it was an easy conversion.”

When asked if installation of the new product mix and the new marketing efforts have been successful, Moreira is clear in saying that new customers have been added: “We were concerned that we might lose some existing customers because the product range was changing but the reality is a lot of our customers have returned.

They are happy to pay less but be more fashionable. We did lose a small number of customers because we no longer carry the products they buy, but for every customer we lost we gained another three.”

JOHN CRAIG

// WE DID LOSE A SMALL NUMBER OF CUSTOMERS BECAUSE WE NO LONGER CARRY THE PRODUCTS THEY BUY, BUT FOR EVERY CUSTOMER WE LOST WE GAINED ANOTHER THREE // DRESSED FOR SUCCESS With the new product mix, new marketing strategy, and renewed focus on quality and value, the John Craig business finds itself in an extremely strong position and is ready for an exciting period of new growth.

“The exciting thing for me is that we have attracted more customers and also crossed over that racial connotation about John Craig being a black brand,” says Moreira. “Our white and Indian customers have always been there but more as a minority. Now, we have crossed the line and if you’re a modern, smart man looking for a certain product, irrespective of race, you

will be able to buy from John Craig.”

The wider-retail environment has been under scrutiny for some time as many customers, especially the ‘younger, modern, smart’ demographic, are choosing to shop online. Questions about the future of physical outlets have been asked, and only those that are prepared to change have been identified as businesses that will thrive.

But, after its successful product range facelift, John Craig is thinking about the potential of new stores.

“We needed complete alignment between our product, marketing and our sales force. We’ve cleaned up our stores, we’ve changed our imagery,

we’ve brought out new offerings, and by fixing all of that we have the confidence to possibly open new stores after keeping that on hold for the past two years,” details the MD. Now with almost 100 stores in Southern Africa, and with a commitment to ensure that customers remain ‘man at his best’, John Craig is perfectly placed to challenge for the industries top spot, always taking new market share, and building on an already sterling heritage and reputation.

“In a 200 m2 store, you get a boutique feel but with unbelievable value. You get attention from staff, you get quality service, and you get our brilliant credit offering,” concludes Moreira.

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