Behind sales success.
Last week, Shaver Shop announced that same store sales growth of 8.7% was achieved in the four months ended 30 April, 2019. In the investor presentation, CEO and managing director, Cameron Fox explained how Shaver Shop is bucking the flat retail trend with key investments and clear priorities.
- Growth in mass market
Shaver Shop operates in a mass market that is continuing to grow, particularly in the male market as hair removal and styling is something everyone needs.
The male beauty regime is becoming increasingly similar to women, according to Shaver Shop CEO, Cameron Fox, with multiple tools including electric shavers, razors, beard trimmers and body groomers. “Skincare has become increasingly relevant for both millennials and over 40s,” he said.
However, Australia and New Zealand are behind other global markets in men’s beauty tool adoption and at home/DIY grooming. “Market research indicates that Shaver Shop is not yet optimising engagement with key, growing millennial consumer. Social media and an increasing focus on health is creating the desire to look good all the time and driving DIY beauty regimes.”
- Omni-channel capabilities
Shaver Shop confirmed that its net promotor score (NPS) is consistently above 80 and online sales now represent circa 11-12% of total network sales with a target of 15-20% in three years.
“In late FY19, Shaver Shop will launch a core CRM platform that lays the foundation for shopper insights, personalisation and loyalty. An organic and paid presence on social media aims to drive sales conversion and retention and an ‘always on’ marketing strategy is designed to attract more, new customers and improve engagement with the existing loyal customer base,” Fox said.
- New store layout and design
Shaver Shop has seen incremental same store sales growth of 10% and more after completing new store layout and designs. There were five full store refits and one store relocation undertaken in February this year. A further 15 to 20 full store refits or relocations are planned over the next one to two years.
“Customer feedback on the new store layouts include: better category segmentation, improved ‘shopability’, increased customer engagement through ‘touch and feel’ display units, increased linear wall-space for hair styling and female beauty,” Fox said.
- Attracting female customer
More than 50% of Shaver Shop customers are women but they are generally buying for men and don’t fully understand the company’s broadening female beauty ranges in hair styling, female beauty and hair removal, according to Fox.
“Increasing use of social media marketing and SEO activity is supporting improved brand recognition and realignment,” he said. “The addition of ghd has been a significant win for Shaver Shop that leverages staff training and focus on product knowledge.”
- Greenfield sites
“Shaver Shop continues to find attractive greenfield opportunities in Australia and New Zealand.” There were 121 stores around the country at 30 April, 2019 and the company is currently targeting circa 140 stores.
- Franchise store buy-backs
Shaver Shop completed the buyback of Eastland, Victoria in October 2018. The remaining eight franchise stores are strong performers and largely located in NSW with an estimated EBITDA of circa $2.5 million in the group.
Significant tax benefit from completed franchise buybacks is still to be realised in the coming years. “We will continue to assess opportunities at appropriate multiples,” Fox said.