Mitre 10 New Zealand new Chief Executive Officer (CEO), Andrea Scown, recently spoke exclusively with AHJ on her new appointment. Thrilled with the prospect, Andrea is not only the first female Chief Executive Officer of the Mitre 10 New Zealand group, but also the first internally appointed Chief Executive Officer after formerly holding the position of Chief Operating Officer.
Beginning her career with the group in 2017 as the General Manager of Retail Operations, Andrea brought plenty of retail experience to the role, including General Manager of Millers, as well as acting Chief Executive Officer at EziBuy and Chief Operating Officer of Bendon. However, it was Mitre 10’s culture that attracted Andrea to the group initially.
“While I have always had a high appreciation of the building and home improvement sector, I also knew that I loved the Mitre 10 brand as a customer myself because the stores had such a great feel about them.”
“While Australian Mitre 10s are far more trade orientated, here the customer base is also a little bit more female orientated than Bunnings and you do get a sense of this in-store. In saying this, our members not only deliver a great mix of beautiful gardens in-store but also the hard of the hardware at the other end with drive-through and trade,” she said.
“While we are more strongly retail, this does primarily depend on the store with some stores being 50/50 and others more retail-dominant. However, if you rolled the business all into one, it would be 60/40 retail to trade. Stores deliver different impressions depending on where they are. Some stores are very big in trade and have their own frame and truss plants while all Mitre 10 MEGA stores have a drive-through and a certain range of timber supplies and products. They all have a core range and supplement this with local ranging that appeals to their specific customer preferences,” Andrea said.
Post and pre-COVID challenges
While the past 12 months have presented its own set of challenges to the group – and the New Zealand hardware industry as a whole – Andrea said members and store teams have coped incredibly well with the unprecedented demand throughout several COVID lockdowns.
“Mitre 10 effectively had to slip through four different operating models while trading in and out of alert levels throughout different parts of the country. We first went into lockdown on my birthday last year, so within 48 hours we had to close down the entire store network. As you can imagine this is no easy feat when you have got a lot of live products – we have the biggest garden centres in New Zealand. This had a real impact on us. Then remaining open for essential service providers had its own challenges in terms of what products were essential and what were not,” she said.
“I remember getting a call late one Saturday night from a member who was very concerned about whether or not they could sell shower curtains to the local medical centre because this request was not like selling emergency type building products to the trade. But the medical centre needed the shower curtains for beds. This was one example of when we had to use our own judgement at a local level and do what we thought was right. It was such a crazy time.”
“Luckily, we had already established Click & Collect, but we had to deliver goods outside of the building during lockdown by implementing a drive-through traffic management system where customers stayed in the car while we loaded their car boots,” Andrea said.
Opening stores with social distancing in place, after the lock down, was a challenge for the group.
“With Auckland being a major city and reverting back into alert level three at times, this meant we had to trade throughout the country in very different ways. The beauty of this co-operative is that they have the ability to pivot very quickly. While I was at the centre of directing what we needed to do at each level, I also knew with absolute confidence that the stores were executing amazingly.”
“This was particularly evident through our outstanding customer feedback on how easy it was to deal with us through that whole period. We are very proud of this, especially with so much of our team standing up during that time and really showing what they were capable of,” Andrea said.
Supply chain woes
While supply chain issues continue to ravage the hardware industry currently, particularly within New Zealand’s timber sector, Andrea said she was grateful that all members had made the choice to buy stock at large pre-COVID.
“This turned out to be a great move because when doors did reopen, we had the product to sell. Our members also stood by the purchase orders they had made with trade partners before COVID and our partners really saw that we were all in this together. It would not have been right to just stop buying. Suppliers do not forget when you honour purchasing promises,” she said.
“Now we are having the opposite issue with people knowing far more about supply chain than they ever wanted to know. Every day our category team just tries to manage stock along with our trade partners and it is taking a tremendous amount of focus.”
Andrea said long term retailers are so used to looking to the past to predict what is going to happen next. “If there is anything I have learnt in this past year, it is that history will not help us and we really just have to play out what is in front of us.”
While structural timber supply remains an industry-wide issue throughout New Zealand, Andrea believes there will be no impact to the Mitre 10 group as a whole given the group’s current model.
“Our stores are locally owned businesses and our members have local relationships and supply agreements with local providers. Supply issues sit more with pockets of stores impacted by Carter Holt Harvey’s ceasing of supply. The beauty of a co-operative is that often other members have stock supplies and availability. We are currently working internally to help run another route for those pockets of stores that are running short and so far we are managing quite well,” she said.
Andrea said, discussing the increased utilisation of locally made product as an ongoing solution to supply issues, currently bought locally is green-life and timber and Mitre 10 New Zealand imports a lot less than people think.
“In saying this, I think any business is open to a sustainable supply chain today. It makes sense to source locally because the freight costs would certainly be lower, so if it was sustainable and reliable, all businesses will be open to that,” she said.
For now, Andrea’s number one strategic priority is Mitre 10 New Zealand’s substantial five-year transformation program which has now progressed into its second year. The program not only includes complete changes to the group’s technology systems but also the reimagining of the group’s operating model and processes.
“This includes changing how work is done to become a more efficient retailer and one that is capable of delivering an even better customer experience than we do today. In saying this, we will be implementing the transformation program on the back of substantial over-trading throughout the past year,” she said.
“Our consistent new waterline means we are trading at levels that would be typical of the four to five weeks around Christmas and this has been going for 14 months straight. This brings its own challenges, including ensuring the team has sufficient holidays.”
“Our number one priority is looking after the team because they are the ones looking after the customers. The backdrop of how flat-out things are at the moment is top of mind for me. I think me being an internal appointment and really well-known within the co-operative has meant that I am truly delivering stability to the team. We also understand that the transformation program is now being run on the backdrop of continuing to run a great retail business,” Andrea said.
For now, Mitre 10 New Zealand will continue to deliver on several strategic projects, including improved customer programs and improved team engagement programs.
“The group is currently launching a brand-new customer feedback program, as well as a major new brand campaign that kicks off in July. We have also have developed mindset training for everyone involved in the transformation program and we are looking at the store of the future and evolving the store footprint,” she said.
“We are in the thick of omni-channel retailing and that true online to offline customer journey. This means continuing to deliver initiatives in this space such as Click ‘n’ Collect lockers, in-bay digital displays in our paint colour centres, and implementing ways to connect those channels to customers just to remove any friction.”
“The group has implemented a good strategic road map that is endorsed by our board and our membership. Anything I now bring to the role is a build-on rather than a fundamental change. In terms of strategic areas, it is about cracking on with what already is in place,” Andrea said.
Andrea believes wWhile customers continue to seek both an online and in-store experience, much of the shopping does start online, even if the purchase journey is finalised in-store. Mitre 10 New Zealand will continue to fully embrace the omni-channel retail approach, with customers looking for a seamless cross-channel experience, hence continuing the focus on developing the online offering, according to Andrea.
“Obviously Mitre 10’s online channel grew exponentially from a low base pre-COVID and the pandemic has taken this to a whole new level. So Mitre 10’s continued annual investment in accelerating our online capabilities will not stop and this includes everything from content to product searches. Content is very important given that this is where customer journeys often start, so we are completely up for anything that prompts customers to come to the store or order with us online. While we are only partway through this journey, online will be a growing feature for us, particularly when I look at where overseas markets are in this space,” Andrea said.
As the largest home improvement retailer in New Zealand currently, Mitre 10 New Zealand continues to build new stores despite Bunnings expanding its footprint, according to Andrea.
“Bunnings certainly is a competitor to be respected and we watch them closely. I personally admire numerous things about their business but we are quite a different proposition in that we are a higher customer-serving model. We have to stick to that as our competitive advantage.”
“We have been gauging market share growth over the last year particularly and this is slow but steady. While you need to know your competitor, you need to focus on what you are known for and dial that up,” she said.
Growing into the future
Andrea says, for now, the co-operative will stay the course of not only building new stores but developing its online channel, while also ensuring its trade business continues to grow through recent launches such as the SmartMate Customer Accounts. This new innovation may be used by trade, commercial and business customers across multiple stores and has been a massive boost to new customer acquisitions.
“Mitre 10 will continue to launch initiatives that hit the right note with retail, trade and online customers and ensure that we certainly do not take the foot off the gas and become complacent,” she said.