Republished from NZRetail's June 2014 issue.
Back in 1998, Paula Wallace designed a duvet cover as a birthday present for a friend. The gift had a very Kiwi look to it with its three giant fish, and so impressed Paula’s social circle that the requests for similar articles made Paula and husband Bill realise that they may just be onto a good thing.
“Paula has always had a passion for textile design,” recalls Bill. “She started straight from school with her own business called Kozmik Design, a range of hand-painted clothing which was popular in the surf and gym communities of the late 80’s.”
In 1994 the couple purchased a textile printing business and started printing their own products. The Wallaces bought the business with the intention of developing Paula’s designs but in those early days they weren’t producing much of their own design work, instead printing fabric on contract for garment manufacturers who were bringing their own designs for Wallace Cotton to print.
While the contracts gave the company the volume it needed to survive, Paula kept on designing duvets with a distinctive New Zealand flavour and the big break-through came when the designs were exhibited at the Auckland Gift Fair. They caught the eye of some major retailers in the New Zealand and Australian market, who began placing orders.
“Everything was supplied under their brand names,” bemoans Bill. “But it was doing nothing for the Wallace Cotton brand. It gave us volume, honed our design skills and gave us many business insights as did our exporting of contracts to the likes of David Jones in Australia. We did, however, have our own designs, which we were still supplying under the Wallace Cotton brand to small independent retailers around New Zealand.”
In 2006, the focus turned to the Wallace Cotton brand when Bill and Paula launched the Wallace Cotton range in their first catalogue, which they mailed to a few hundred friends, family and a school list. Sales were made through a newly established e-commerce website and today the Wallace Cotton catalogue is sent to some of the 70,000 interested customers and prospects in New Zealand and Australia.
E-commerce has been the foundation of the Wallace Cotton business for the past eight years, but from the time the first catalogue was sent out in those heady first days of 2006, people were asking where they could touch, see and feel the products before purchasing.
“We knew we had to have some presence to allow customers to see the product so we opened a tiny store in Birkenhead,” says Bill. “Six months later we had to double the size of the store and 18 months later we had to lease the building next door to expand the warehouse and office.”
Today, web sales account for 25 per cent of Wallace Cotton volume, while the remainder is sold through Wallace Cotton stores in Newmarket, Ponsonby, Albany, Takapuna and Wellington and concession stores in Christchurch, Timaru, Dunedin, Palmerston North, Tauranga and Te Awamutu.
All Wallace Cotton products are produced overseas from designs and specifications emanating from the local design team that Paula heads up. The range has grown and evolved over the years and Bill and Paula travel the world to source the best manufacturers to produce the seasonal collections. India, China, Indonesia and Pakistan are countries with a tradition of textile manufacturing but each has strengths in different areas.
“We can’t source everything to the level of quality we require, from one country,” says Bill. “Each region has different specialities and strengths.”
The much-anticipated seasonal catalogues can be found on coffee tables for months after they have been produced and along with the highly designed stores, remain a centrepiece of the company’s marketing effort. The range in the first catalogue back in 2006 was much more limited than it is today. That first offering focused on duvet covers, sheets, cushions, tea towels, towels and bath linen. Now the range has expanded to include women’s sleepwear, nighties, pyjamas, robes and slippers. In summer there is a range of resort wear – kaftans, beach dresses, sarongs, linen shorts, and dresses.
“We are still a bed linen company and that is what we want to be known for,” reaffirms Bill. “But we are looking to broaden our range and provide a complete offering of giftware, homeware and furniture.”
Retailing furniture may seem like an odd choice, but the furniture items are integral to the home decorating style that makes the stores so attractive for customers. The furniture is used to merchandise the products, but each furniture item also has a price tag.
What holds the brand together is ‘design’.
“It is what is at the heart of the brand and is what Wallace Cotton has been built on,” says Bill. “It is something that continues throughout the brand, not just in product development but in the catalogues and in the stores.”
Go to the website and you’ll see the emphasis on design carried through. It epitomises a mix of relaxed, fresh but timeless quality. It is a relaxed sophistication with a distinctive New Zealand flavour.
“We feel our designs reflect the New Zealand way of life,” says Bill.
The growth of the retail side of the business has been steady through what have been some difficult years for the retail sector. The launch of the Newmarket store was the first real foray into a crowded market battling to survive after the global financial crisis. It grew steadily from its 2009 introduction with sales growing every month and the Wallace Cotton brand awareness flourishing.
The decision to select Newmarket as a launching pad was an easy one as it was, and still is, New Zealand’s premier fashion retail area. The subsequent decision to open the next store in Wellington was driven by the strength of online purchasing from the capital city and a desire by Wellingtonians to see and feel the products they were considering buying.
The opportunity to expand into other regions and become a truly national brand came on the back of other’s misfortune. The collapse of a national homeware chain opened up two possibilities. One was the prime location in Takapuna that Wallace Cotton took as their next store, and the other was a Wallace Cotton store-within-a-store in some of the stores that were owned by franchisees and not affected by the receivership. The latter was a model that Wallace Cotton had also introduced into Ballantynes in Christchurch and Timaru and Arthur Barnett in Dunedin – these concession stores had given a much-needed South Island presence. Palmerston North and Tauranga were two cities that Wallace Cotton entered through the franchisee opportunity.
More recently a Wallace Cotton store has opened in Ponsonby, and the North Shore of Auckland is catered to through a store at the company’s head office in Albany and the Takapuna store.
Sales today are now split 25 per cent through the website, 10 per cent wholesale and 65 per cent through the retail stores. Twenty per cent of the web sales are into Australia, which shows the most potential for expansion. Already, a print advertising campaign in Australian magazines Vogue Living, Home Beautiful and Country Style is laying a foundation for future growth across the Tasman.
Print also forms the basis of the New Zealand marketing effort, with the three seasonal and two sales catalogues as its base and advertising in NZ House & Garden, Life & Leisure, and Your Home and Garden.
Along with the catalogue that now reaches up to 50,000 customers and a further 20,000 prospects, Wallace Cotton has a strong digital presence. Google AdWords, banner advertising, Facebook and some Abandoned Cart Marketing are all driving sales to the website. The Wallace Cotton Facebook page now has over 10,000 likes.
“The social media side is really important for us,” says Bill. “We don’t use it just to drive sales, but more as a means to build engagement.” That engagement comes with blogs, promotions and news and tips from staff. A recent promotion included the chance to win a hand-made quilt just for picking a favourite colour and sharing it with a friend – simple but effective in adding new friends to Facebook and the mailing list. This promotion had a huge response. A June promotion sees the naming of Paula’s beautifully decorated car – a Nissan Figaro.
Building engagement is a primary driver for Wallace Cotton, whose secret of success has been putting the customer at the centre of every decision. “We try to surprise and delight our customers,” is the catchphrase. This is done in small ways, like every product being packed in a cotton, drawstring bag, or same-day delivery in Auckland and two-day max delivery around the rest of the country.
Loyalty is achieved through the offering of a $50 credit for every $500 spent, the speed of the parcel arriving, the knowledge of the staff and a constant questioning of, “will the customer love it?” Showing customers how to accessorise, with staff taking a product out of the bag, throwing it on a bed and showing how other products in the range can bring a room to life, works wonders. This has the ability to portray a beautiful setting and show customers how they can achieve that look in their own home.
What has also worked wonders is the giving back philosophy. About five years ago, cancer survivor Ruby Seeto designed a tea-towel with a cupcake design and raised $5,000 to repay Starship children’s hospital for saving her life. Bill and Paula were so impressed they offered to work with Ruby to produce a new design each year. This annual offering is eagerly anticipated by Wallace Cotton customers and has to date earned $300,000 for Starship, with the hospital receiving $6 from every $10 tea towel purchased – a true case of another gift that keeps on giving.