Marketing, 2nd Edition
Smiggle, launched in 2003, was created by Stephen Meurs, and his aim is to produce fashion-forward stationery. In this segment, the business owner discusses the many facets of starting up the business, and how the products have come together under the Smiggle brand. This video helps to explain the new product development process, and in particular product development and test marketing.
Jayne Edwards: In the world of retailing, a shop designer is usually a hired gun, someone who comes in, fits out a store and moves on, but one Melbourne designer has taken a punt by putting his retailing theories into practice and his ideas on the shelves. The result is Smiggle, a line of pens, pencils and office gear that's anything but stationary.
Stephen Mers, Smiggle: Well, we release a new product every two weeks into our business and definitely drive it through innovation and new products all the time because it keeps it exciting and fresh. I've learned that lesson from dealing with fashion retailers and working with them over the years that it's all about the moving forward and never sitting on your hands.
Jayne Edwards: A decade ago, store designer Stephen Mers was doing some serious window shopping overseas, looking for ideas for some big chain customers, when he spotted something for himself.
Stephen Mers, Smiggle: Just through the travel I do I could just see there was an emerging trend just beginning to happen that you could actually take stationery and convert it into a brand and a concept. We looked at other retailers like The Body Shop that took skincare and cosmetics and then developed what they did with Body Shop and we thought, there's a niche there, we could do something similar with stationery.
Stephen Mers, Smiggle: So how will we display them? Put them in big beakers?
Female Speaker: Yeah, I think you do a beaker per colour.
Jayne Edwards: Smiggle has 17 company owned stores and is also stocked in Australia Post shops, with plenty of options for further distribution. The products are big with school kids but half of all customers are adults.
Stephen Mers, Smiggle: We have two targets. One is the teenage female, although we have addressed a more male product now and expanded out the range, but primarily we're looking at a high school student and also a young executive.
Jayne Edwards: Smiggle's big sales pitch is designer style and value for money, which is achieved by importing from Asia.
Stephen Mers, Smiggle: We have a very aggressive value driven pricing strategy. As I said earlier, we want to be a mass market value driven product. Smiggle is for everyone, and that does also help us with our competitors because it makes it harder for them to put similar quality products on the market at the prices that we deliver at. In the first year of business it was tough because we were doing a brand new concept that hadn't been seen before in Australia or many parts of the world before, so the first year of sales were meagre. It was tough. We actually made a loss financially. But then from then on, we've doubled in sales every year in to what is now a multimillion dollar growing business that probably doubles in sales every year.
Jayne Edwards: Despite Smiggle's success, it remains only a sideline business for Stephen Mers. The bulk of his income comes from designing hundreds of stores a year for clients prepared to pay between $1,200 and $3,000 a square metre.
Stephen Mers: The other idea is to move this timber floor and do a timber perimeter floor and do concrete through the middle then just have the timber staircase as more of a feature then.
Stephen Mers, Smiggle: Most of the stores we design a new concept for, we get a 25 per cent lift and it can be up to 50 per cent if their previous stores have been really bad but they have great product. You can turn that into a 50 per cent lift. Most landlords require that the tenant upgrade their stores every five years with a refit or a major renovation to the store, just to keep their centres looking fresh and new all the time. Usually if I'm not enjoying what I do at Edge, I'll go and visit the team at Smiggle and see what I can do to upset everyone.
Alan Kohler: Kate Tozer reporting and that's it for the program. Thanks for your company. I'll see you next week. And now it's back to Barrie and the Offsiders team.