Mosaic Brands is seeing positive results from the implementation of a digital department store strategy across several of its core apparel brands, including Noni B, Rivers, Millers and Katies. The strategy, which Mosaic started rolling out in FY20 before Covid-19, has seen some of Australia’s most recognisable specialty fashion retailers expand into new categories, including homewares, beauty, jewellery, electrical and kids’ products. Noni B alone has increased its online offering from 70,00
70,000 to 400,000 items across 30 different categories in under a year, leading its website traffic and average order value to shoot up as a result.
“It’s a great example of if you build it they will come in the retail sector as we’re seeing time spent on the site up by 17 per cent in a year and average order value increasing,” Mosaic’s CEO Scott Evans said.
Rivers, which now offers such diverse products as guitars and pet beds alongside its core apparel offering, has seen its site traffic grow more than 30 per cent year on year, and new users have increased by 50 per cent.
“It is working well across all brands as it is exciting our customers,” Evans told Inside Retail.
Leveraging loyalty
Mosaic’s department store move isn’t exactly unique in the fashion industry.
Boohoo, the British fast fashion giant best known for its bodycon dresses and celebrity collabs, recently launched its first ever homewares collection, including candles, picture frames and bedding. And the past few years have seen everyone from Zara to H&M to Australian teen fashion chain Sportsgirl venture into beauty products.
The thinking is that retailers can leverage the customer loyalty they’ve earned in their core business into incremental sales in new categories. While a customer might not seek out H&M for a beauty purchase, for instance, they might happily add a new tube of lipstick to their basket while shopping for clothes.
Evans touched on this idea in a statement about the new strategy in Mosaic’s FY20 annual report.
“The Group’s brands have strong relationships with their customers and our database continues to grow with a total of 5.2 million names in June 2020. This major asset remains core to our digital department store strategy which enables the group to grow our ‘share of wallet’ through offering a wider range of products and categories supplied online only,” he wrote.
“The second half of FY20 saw results from the ‘share of wallet’ strategy accelerate ahead of expectation and there was no slowdown in the first month of FY21.”
Keeping costs down with drop-ship
Retailers have taken different approaches to category expansion. Australian department store chain Myer launched an online marketplace that enabled it to offer products in new categories without having to take on the risk of buying inventory upfront. Products are sold and shipped by individual sellers on the marketplace, though the items are seamlessly integrated into Myer’s e-commerce site.
Mosaic in contrast has expanded into new categories via a bespoke e-commerce platform.
“The model is similar to a marketplace as we sell partner products; however, we listen to what our customer wants and adapt to allow us to be her one-stop online department store,” Evans said about Noni B’s digital department store.
When a customer purchases a partner product on Noni B’s website, the partner fulfils the order – a process known as drop-shipping – helping keep Mosaic’s costs down.
While most of its new products are available online only, Mosaic has started adding a selection of the key items that customers want to its stores. This comes as more customers have started shopping online since the pandemic and launch of new categories.
“Our traditional instore only shoppers are converting to multi-channel shoppers at a faster rate and this continues to be a focus,” Evans said in reference to the Noni B business.
Across brands, Mosaic reported a 27 per cent increase in online sales in the first half of FY21 to $52 million, or 17 per cent of total sales, up from 10 per cent in the prior corresponding period.