Creativity and innovation are at the top of the priority list for Surfstitch this year, as the fashion retailer is set to develop a new range of initiatives, including its new third-party logistics service, a new app and product categories.
The e-commerce retailer went into voluntary administration in 2017 and was eventually acquired by Alceon Group, but according to managing director Justin Hillberg, the business has “never been healthier”. Surfstitch is more than 300-400 per cent up in net profitability and is now delivering record profits back to its shareholders.
“We’re in a really good position where we can talk about innovation and we haven’t been in that space for a few years”
Justin Hillberg
Managing Director, Surfstitch
“We’ve got a 10,000sqm fulfilment centre on the Gold Coast and over the last two years, we’ve been doing the fulfilment for one of our partner brands, which is EziBuy. Now [we’ve] set it up to offer the same service to other partners into 2021. We’ve done it really well, we’ve fine tuned it over 10 years. There aren’t a lot of good direct-to-consumer 3PLs out there.”
Surfstitch’s 3PL solution takes care of everything from warehousing, storage and logistics to customer returns management on behalf of brands. In addition, Hillberg’s team is opening up its in-house photo studio and will offer brands creative services, such as content development, as well as customer service.
Surfstitch currently sells over 300 brands, some with large global teams, others with less support, which could benefit from Surfstitch’s new services. As Hillberg explained, one of the challenges for new retailers is finding great partners that can best represent the brand.
“You need the right tech, people and processes and there is no rulebook around what that looks like, so often brands have to learn the hard way. It’s a lot more complicated than it sounds,” Hillberg said.
“Often those brands don’t have the resources in those areas because they’re small teams and they’re mostly focused on marketing and designing products, not necessarily backend operations. We’re handling all that backend complexities which is what a lot of brands stumble with when they’re going through their growing pains.”
Beyond the launch of the 3PL solution, Surfstitch has also recently released a new app to strengthen its relationship with customers and communicate with them on a more “intimate” basis, said Hillberg. It’s currently in beta mode and includes new features such as shoppable stories and “rich content experiences”. A loyalty program to further create a sense of community is also on the cards this year.
“For us, the launch of our app is all about improving the range of channels that we are available on to meet our customers and engage with them wherever they like to be active. Apps offer a different opportunity to communicate and build rapport, improving relevance for our customers by offering unique experiences that in turn help build loyalty and lifetime value,” said Hillberg.
Meanwhile, in an effort to attract customers beyond the summer season, Surfstitch has entered into new categories, such as homewares and activewear and wellness, where it can tap into the same coastal aesthetic.
“One of our biggest challenges is a good chunk of our customers purchase in summer and we don’t see them until the next summer, so our purchase frequency is lower than some of our peers. One of our main objectives going forward is to increase that and give people other reasons to return to us throughout the year. It’s a big priority for us,” Hillberg said.
Originally published in Inside Retail.