Page 30 - Mellby Gård Yearbook 2018–2019

KAPPAHL
SEEKS TO BE THE BEST AT UNDERSTANDING CUSTOMERS’ NEEDS
The clothing industry faces major challenges: fierce competition from e-commerce, reduced consumption and increased focus on issues of sustainability. For Elisabeth Peregi, the new MD of KappAhl, it is a matter of focusing on the customer and building the strategy around that.
“Our vision is to become the first choice for each of our priority target groups. We must create a very good mood for customers – it’s a question of the degree of fashion, the fit and the right price. Competitors are just a click away. I took the job because I like this industry and KappAhl is an exciting company with a strong brand and in which I see great potential”, says Elisabeth Peregi, MD of KappAhl since April 2019.
Customers’ purchasing patterns have changed, they shop less frequently, and the average purchase has diminished. The share of consumers’ wallets spent on clothing purchases is decreasing, while second-hand and straightforward swaps are increasing. Hiring garments for individual occasions is likely to become more common in the future.
Sustainability issues are becoming increasingly important. KappAhl has become a partner in Renewcell, a company producing new fabrics from recycled garments. Swedish consumers discard eight kilograms of clothing a year and KappAhl provides an opportunity to drop off old, used clothes at its shops.
“It used to be the case that people couldn’t afford to shop – today
it is seen as unsound. New generations are becoming conscious customers – the industry faces major changes. Being close to the customer, providing good service and offering a superior customer experience is important. Increased adaptation to the target group is the way to go”, says Elisabeth Peregi.
Although KappAhl’s market share is small, there is great potential in a world of global trade. The chain has several unique concepts that are performing well, such as Newbie for the smallest and XLNT for women demanding larger sizes.
“It all builds on our attentiveness to our customers’ wishes and remaining relevant for them. How does the customer want to be treated? How much help does she want? What guidance should we give? The customer expects everything to work”, says Elisabeth Peregi. “We also need to become better at turning customer insights into action. In a fast- moving market, short lead times are important”, she continues.
New goods arrive in the shops all the time, if they are not sold, they
are removed so that they do not impede the flow and are sold at a discount. While it normally takes six months from concept to delivery in shops, the ambition is to reduce the lead time to four months. KappAhl also has a fast track that only takes 12 weeks from concept to delivery.
“We have a strategic three-year plan. Among other things, this builds on our getting better at using our strengths. For KappAhl, proprietary design is a strength – we design the clothes ourselves. Our mix of physical shops and online sales is also a strength. I see great potential in this”, says Elisabeth Peregi.
KappAhl holds a strong position in the Nordic region and sees potential in Poland and the UK. Future growth will be more about new channels than new geographies. In the long term, the chain will have fewer stores in the Nordic countries, but in more appropriate locations, while potential exists to establish more shops in Poland and the UK.
Large shopping centres, where gyms, cinemas and restaurants are established, are holding out, meaning that an increasing number of people are spending time there, particularly in crowded metropolitan areas. Small scale and local businesses are also performing well, while the smaller town centres are having increasing difficulty.
“We must be where our customers are, meaning that we need to meet them in more fora than today, in new and different places. And we
will have to close where locations have lost their relevance. The shop network is changing, and we are working with both large and small concept shops”, says Elisabeth Peregi.
During the year, KappAhl launched KappAhl Kids, focusing on children’s clothing, and established a new flagship shop at the Nordstan shopping centre in Gothenburg. The chain also works with shop-in-shop solutions for various internal brands and has launched a click-and-collect service, with which customers order items online and pick them up at shops.
30 | MELLBY GÅRD – YEARBOOK 2018 / 2019