How The Warehouse Group found its value, and profits

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Face 2 Face podcast takes a look at how three iconic Kiwi companies changed brand perceptions. In the second installment, hear how retail giant The Warehouse Group bounced back from the brink by restoring value to its brand.

The Warehouse Group has maintained a stronghold over New Zealand’s retail sector for 30 years, but in 2016 profits took a hit, dropping 75%. It needed to change dwindling brand perceptions to compete with global players entering the market and adapt to new customer behaviours. 

New thinking was needed to help the major overhaul, and among the new recruits was Jonathan Waecker, who was named the company’s first chief marketing officer. It was a bold move as he hailed from the USA and had a background in media and technology, not retail.

His first major challenge was addressing The Warehouse Group’s internal complexities. Six brands were operating independently with different marketing teams and agencies for each brand – Noel Leeming, The Warehouse, Warehouse Stationery, Torpedo7, OneDay and The Market. They also all had different media and creative agency arrangements. 

The solution came by appointing Omnicom Media Group to create a bespoke agency solution to centralise the brand management, with Waecker teaming up with CEO of OMD, Nigel Douglas, to unify the approach and get the brands working together properly. Along the way they also uncovered vital customer data that would help in the bid to change perceptions. 

And that was an important challenge – The Warehouse for example had long been aligned with being a ‘cheap’ go-to option that sold low-quality products. But they also needed to keep each brand feeling different and distinct. 

“We started focusing on quality, but we had to make sure that the pricing trigger was always there,” Waecker explains on the changes made to The Warehouse brand strategy. 

“So you would show this unbelievably beautiful set of bedding and then you’d wrap it up with ‘all this could be yours for $19’. We hammered that home really really hard for about a year, and we started to see our quality metrics move. Now we’re moving into phase two which is we’re trying to drive urgency.”

Douglas explains the way they are using media differently now too: “The way our media shows up is different for all of our brands. The creative is different, the journeys are different. But the media now can support them all in a way that it couldn’t before. Before we were just trying to tread water.”

An example of the new brand thinking came with the launch of a new product – Kiwi Scrabble. This gave the company an excuse to engage customers in a different way, and create something of value for the community, a customised version of the boardgame with popular local words included for the first time. 

The Warehouse kicked off a nationwide search for New Zealand’s favourite words, receiving hundreds of responses through the company’s Facebook page, and were able to add a list of 300 Kiwi words like ‘bach’, ‘beaut’ and ‘bro’ to the Scrabble glossary. 

The campaign was fronted by celebrity cook Jo Seagar and boxing great David Tua, and featured an epic match against Australia for the right to the word Pavlova, live streamed through Instagram. It was a great success, harnessing the power of social advocacy and shared values to celebrate the Kiwi language and spirit. 

Has it all paid off?  

A redefined brand strategy and a slew of new campaigns and initiatives are among the factors credited with a dramatic uptick in performance for the legacy brands, with profits up by 26% for the 2019 financial year.

  • Hear Jonathan Waecker and Nigel Douglas share the story of how they helped revive The Warehouse Group’s brands in the new episode of Facebook’s Face 2 Face podcast here

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