Warehouse may extend click and pickup

TOM PULLAR-STRECKER
Last updated 05:00 16/12/2013
Mark Powell
ROSS GIBLIN/Fairfax NZ
Mark Powell

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The Warehouse "red sheds" could take on a new role by acting as fulfillment centres for the retailer's growing stable of online stores.

Chief executive Mark Powell said The Warehouse was considering expanding its "click and collect" internet shopping service so customers could pick up goods ordered from its online businesses Torpedo7, Ilovebeauty and No 1 Fitness, at either its "red sheds" or Noel Leeming stores.

The Warehouse began letting customers order products from its Warehouse stores online, for pick-up from its red sheds, in October. The click-and-collect model has since been extended to its Noel Leeming and Warehouse Stationery chains.

Powell said it appealed to busy people who wanted to hunt for purchases online rather than in the aisles and to "lock in" prices they saw advertised online, but for whom delivery was a problem.

"It is frustrating for a lot of working people to turn up and see that Courier Post note; ‘Can you please come and pick up a delivery - you weren't there'.

"Logically, the next stage for us to look at is our multiple online brands that haven't got ‘bricks and mortar' stores and to offer click-and-collect for them as well," he said. "If we could say ‘you can pick up at The Warehouse or Noel Leeming store of your choice' that could have value, so that is what we are assessing."

The retailer has been exploring new ways of doing business after deciding the internet was strategically important and that it had to "follow the customer". Powell would not rule out shipping goods direct to homes from overseas, rather than continuing to keep almost all its stock in New Zealand, for example.

Aside from some books, everything the group sold was shipped within New Zealand, he said.

"That gives lead-time advantages, but we have got a sourcing office with 70 people in Shanghai. There are certain product categories where you could ship direct out of Hong Kong or China - I wouldn't rule it out.

"With this whole area of digital marketing and selling across borders, what we are seeing is you can't fight what customers want and by moving fast, which is what we are doing, we are also learning a lot quite quickly."

Craigs Investment Partners analyst Mark Lister said The Warehouse had probably been more proactive than most Kiwi retailers in dealing with the rise of internet shopping.

He noted that Hallenstein had warned at its annual meeting in Christchurch on Thursday that it was feeling the impact of consumers purchasing clothes GST-free from overseas websites.

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"There is quite a deliberate strategy The Warehouse management team has made to take advantage of the growth in internet shopping and to defend their traditional retail model, rather than watch it be slowly eroded away, and the market views that favourably; at least they are doing something."

Powell said Customs thresholds that allowed consumers to buy many items online from overseas without paying GST were a double-edged sword for The Warehouse. While they might cost some sales in New Zealand, they had helped its online businesses, such as Torpedo7, sell into Australia, he said. As such, The Warehouse was agnostic about whether they should be removed.

A spokesman for Revenue Minister Todd McClay said a discussion paper on the GST-free threshold, which had been expected to be published this year, would not now be released until next year. McClay had decided to give further consideration to its contents as a result of the topic coming up in discussions overseas, he said. Fairfax NZ

- Fairfax Media

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