Could an online platform spell the death of the Road Warrior? A few years from now, in the not-too-distant future, surf retail is teetering upon an apocalyptic breakdown thanks to a cyber-attack known as ‘Black Monday’ and we look back fondly at an analogue world of catalogues and Road Warriors ruling the information superhighway…
Okay, maybe we’re over-dramatising here, but the road blocks in bringing a new technology to the forefront of an industry are sometimes as just as far-fetched as a Hollywood blockbuster. Thanks largely to a $330,000 Commercialisation Australia grant and the perseverance of three friends Simon Blockey, Bryan Heenan and David Hine, Brandscope now sits on the verge of breaking old traditions and embracing new ways of doing business – not just within the surf industry but in fashion, lifestyle and other industry sectors.
While the market in Australia remains fragmented, the efficiencies presented by one unifying ordering platform have meant that Brandscope now has 2500 active users in Australia/NZ and was nominated by 80% of surf and board sports retailers as the best digital platform in a recent independent industry survey.
ASB Magazine sat down with founder Simon Blockey to ask the tough questions and find out if he’s really all about saving trees…and whether Brandscope might actually spell the death of the Road Warrior.
Can you explain how you, Bryan and David came together?
We were all mates at Deakin University, Geelong and had a common interest in surfing and snowboarding. Hec and David have established careers in global IT and Merchant Banking respectively so were a great fit when I pitched the idea of Brandscope to them about five years ago. They could immediately see the issues that the industry faced and how the Brandscope process and software could help streamline the inefficiencies. In a world of escalating costs, smaller margins and limited time, the traditional methods of selling are unsustainable. Brandscope aims to help rectify this, making everyone’s lives easier by offering the very best tool to help all sides of the equation achieve smooth efficient selling and buying. As a team, we hope we’re on the path to achieving this. There’s been speed humps along the way but one of us has had the skill base or market experience to navigate a resolution. It’s been an amazing experience for all of us, punctuated but some harrowing lows and ecstatic highs but the things you remember are the odd ones like Hec introducing me to heavy metal at 3am during an all-nighter or David expressing how stoked he gets when we sign a new customer compared to signing a billion-dollar mining deal.
How important was the Commercialisation Australia grant in establishing the platform?
We made the decision very early on to build the business organically, which places a lot of pressure on cash-flow – so the grant was very helpful in early-stage funding. The driving force behind this decision was to maintain control of the direction of the business, which has placed us in good stead to date. When you self-fund you’re also very focused on getting bang for buck which translates to painstaking decisions on which functions to develop. The result is a very clean, non-cluttered application with a high level of market relevance. Though autonomous, we’re very close to our Supplier, Agent and Retailer customers and do a lot of research on their needs. In essence, Brandscope is a product of the market.
The bigger win though is validation of concept, which is a powerful tool to sell the platform. The board overseeing the funding is very business savvy and will only allocate funding only if there’s merit. They saw growth and impact potential.
Can you explain the current and possible future role of the sales rep for brands utilising the platform?
It comes down to the individual. Some fear it and others embrace it. The system aims to empower Supplier, Retailer and Sales Rep and stimulate interaction, not stymie it. Those who embrace the technology free up time to work closer with their customers and become more of a business manager focusing on marketing, education and product planning. Currently, Reps embracing the tool spend a lot more time assortment planning and presenting product selections to their retailers, thereby taking ownership at the beginning of the sales process. They’ve also got a greater visual on what’s available in their Supplier’s warehouse to assist with replenishment opportunity. They also tend to communicate marketing information a lot better as it’s all on the one portal. As the tool improves, they’ll only become more efficient, resulting in less reps managing more brands across broader distribution channels.
The other factor is that retailers are also taking things into their own hands and becoming more efficient at maintaining their own ranging and inventory levels. On average, 80% of orders are submitted by Retailers. A percentage of those would be initiated by the Sales Rep and then adjusted/submitted by the Retailer, but you can see the trend.
Do you think Brandscope’s success will result in a review of the role of sales reps and ultimately impact their commission structure?
Greater market forces than Brandscope will dictate roles and commissions. You’d have to be living under a rock not to see the margin squeeze that is walloping our industry, placing incredible pressure on the middle-men. It’s unsustainable! Even bigger brands with the luxury of vertical margin are struggling to maintain sales-teams to service indices. We need to deliver efficiencies into the market, be it less Reps managing more brands through a mix of physical and digital means or Retailers continuing to empower themselves. Our job is to constantly engage with the market, determine the inefficiencies and deliver the functionality to assists.
Do you think the boardsports industry as whole is willing to adopt new platforms and ways of doing business?
Absolutely, and Brandscope’s broad entrenchment into the Australian and New Zealand market place is testament to this. Whether it’s Suppliers, Agents or Retailers the willingness to adopt newness is born out of necessity as the market continues to heat up. Beasts like Amazon show us all what can be achieved with technology which results in inspiration to constantly improve. While the independent market is fragmented it’s challenging to introduce efficiencies but through aggregation a lot can be achieved. “Herding the cats” was our primary goal – we can only compete if we’re a coordinated, highly efficient group from Supplier/Agent through to Retailer. The “go it alone” concept simply simply doesn’t work.
You’ve got 100% of the hardware market using the platform. Is it fair to say apparel, with so many classes and styles, is more problematic for Brandscope than hardware?
Quite the opposite. The system was originally designed for indent because there was nothing in the market that catered for this. We quickly discovered that Retailers, while in the Brandscope environment finalising indent, were then shopping for refill. We modified the tool and introduced things like QUICKFILL (4-click reordering) and COUNT’NFILL (stock model orientated re-ordering) which kicked refills even further. Retailers then started pressuring the hardware guys to jump on and make their lives easier (more brands in their showroom) which snowballed. We’re architecting a new function which focusses on the core product lines to drive even greater inventory efficiencies.
Do you think the oversupply of product, subsequent discounting and challenges the industry has faced in recent years could’ve been avoided if Brandscope was adopted earlier?
That’s a very simplistic view of the situation but if used to its full extent, the system influences PO placement, sales into store and sales out of store which results in less stock obsolescence. If inventory’s tight you’re not clearing and damaging your brand. If there’s less excess, clearance specialists go hungry and the market’s kept clean. Nirvana but unlikely we’ll get there. Our mantra is to make independent retail super-efficient by ensuring the right stock is on the floor at the right time, all the time. We need to negate the impact of having too much of the wrong stock and not enough of the right stock which murders your bottom line. This is the only way we’ll be able to complete in an increasingly competitive market.
Timing also plays a large part in the equation. When we launched the alpha site five years ago it was a tough sell but the market is generally a lot more receptive to B2B now through financial necessity. Intuitive flow plays a big hand in this. One retailer told me it’s easier to order on Brandscope than to look at online porn! We’ll take that as a compliment.
Is the Quickfill function available across all brands?
No. Retailers are currently siloed into single brand when buying but they’ve been asking for it because it facilitates their current buying processes. Imagine this… it’s 10pm at night, you’re shagged from dealing with the public all day and you’re copping enormous heat to get your orders in. What follows is a ritual of manual cataloguing, shuffling that would drive anyone insane! Retailers would like this current process digitised which makes a lot of sense. We’ve discussed indent and refill cross-brand comparisons with some Suppliers and there’s polarised views. Some welcome the open market because it continues to hone their product and marketing strategies while others fear it for its impact on price. Retailers are not using the platform for price comparison to the same extent as consumers. It’s a business tool that facilitates a gamut of buying focuses, not just a price decision. Competition drives refinement which benefits the industry as a whole. To shy away from this discussion jeopardises everyone’s position.
How does a brand maintain its own identity and marketing flair on the platform? How do brands ‘stand out from the crowd’ on the same platform?
It’s certainly not vanilla. The system allows for a plethora of up-loadable formats which allows brands to enrich the customer experience. Brands tend to “grow into” the system and place more focus on the generation of digital assets as opposed to printed assets. In essence, the greater the commitment to the medium as the primary sales/marketing/educational tool, the more flavorsome the user experience. We’re also seeing the tool used on the shop floor to showcase products and supporting educational assets to end customers. Some of these customer engagements are resulting in at-once refill orders sent straight to Suppliers. In essence, Brandscope is a blank canvas that is already being looked at by the Retailer down to floor level. Suppliers simply paint it as they see fit to further stimulate the retailer’s engagement. Typically, the bigger the brand the greater the resource library. The greater the impact, the stickier your brand is and the more purchasing activity it receives.
We’re also seeing that Retailers are buying within the environment because it’s “easy”. As an example, they’ll confirm an indent then send a couple of refill orders through for a few other brands while there in their showroom. Brands that fear being amalgamated need to weigh it off against the ordering benefits of the aggregated market.
Obviously, reports are limited to participating brands and retailers, but who is eligible to receive a Brandscope market report?
We don’t provide a market report. The system offers a reporting suite that caters for the a-typical reporting requirements but we still find that most Suppliers and Retailers rely on their POS and ERP systems for more complex reporting which are already customised for their requirements.
Can you update how the international roll out is going?
The system is now being used in 40 countries so the footprint is growing rapidly, especially in Europe and the US where we’re spending more time. The US is a tough market because the rep model is still sustainable due to the smaller territories and higher incomes. As such, B2B is characterised by rep tools, but this will gradually change as the Australian experience becomes known. Action sport and lifestyle fashion channels are strong but we’re also seeing a huge uplift in Outdoor and Leisure which dwarf the surf market on a global scale. Globally, we’re seeing cross-overs in these distribution channels resulting in functionality that can be shared across other markets for the good of all. We’re confident that a collusion of forces and a cross-pollinisation of ideas across all channels will fortify independent retail as a whole.