Peter Barraket, a former Blackmores and Vitaco exec and now CEO of retailer Mr Vitamins, believes there are considerable growth opportunities, despite the challenges facing the sector.
“It’s not plain sailing at the minute; the industry is under scrutiny, retail footfall is falling, we have regulation changes in China and costs are increasing,” he said.
“But on the plus side, we have ageing populations, the industry is robust, demographic changes are positive in terms of tourism and immigration, and there is lots of product innovation.”
The firm has three retail stores in Sydney and a thriving e-commerce business.
Speaking at the Natural Products New Zealand Summit, Barraket highlighted five factors for retailers to consider to boost sales and service.
1) Provide personal health solutions
Barraket said a more personal approach to healthcare and a detailed understanding of a consumer’s’ needs was vital to build trust and long-term relationships.
“You can call this personalised nutrition, individual healthcare, whatever you like, but I firmly believe that a more personal approach is needed. And this means retailers having specialists and very highly qualified staff in stores to provide expert advice.“
2) Focus on better quality products
He said it was inevitable that better quality products would prevail and that consumers would not settle for second best.
“With the amount of pressure and scrutiny we have on our industry, inferior products will fade away. Six or seven years ago things were commoditising, but now people are going towards the better products for the simple reason that they work. You can always find a way to have cheaper products, but you can’t do it by having cheaper ingredients,” he added, noting his best-selling item was a high-quality fish oil that sells for $50.
3) Make it easy for customers.
Berraket said he was constantly amazed by the how little some retailers knew about their customers.
“For the life of me I don’t know why researchers capture more data, not to bombard them with offers, but to make their life easier when it comes to the purchase experience. We have 70-80,000 members, and around 70% of our sales go to them.”
4) Stop assuming shoppers will walk in
He argued retailers needed to better use their store assets and encourage staff to be more productive in enticing customers.
“My view is that you can’t just rely on people walking in to your store any more, and that better use of the store can be made in terms of dark hours with people fulfilling online orders when the doors are closed."
5) Embrace new and innovative payment solutions
With many people claiming Australia is on the brink of becoming a cashless society, Berraket said for many people it was already a reality.
“Retailers need to take advantage of this. When people don’t even have five minutes to wait for a coffee to be made, we need to be better at letting customers pay through as many methods as possible.”
Having gone from the supplier side to retail – and with a new, undisclosed, industry role in the pipeline – Barraket said he had high hopes for the future of the industry in Australia and New Zealand.
“It’s not until you work on shop floor that you really know and appreciate what the future for retail in our industry could be,” he said.
“There are some great opportunities cropping up that people aren’t taking that could take us to the next level.”