While consumer spending no doubt declines during times of economic uncertainty, there are a number of clothing and retail accessories brands that continue to perform as their products are perceived as essential rather than luxury items.
At the opposite end of the scale franchises that offer products not considered a necessity can also prove successful in dismal times because they provide escapism from bleak times.
IBISWorld’s Personal Accessory Retailing in Australia industry report reads “Luxury products performed well over the five-year period [through 2012-13], driven by continued consumer demand for unique branded merchandise. The revenue and profit of retailers selling luxury accessory items has grown steadily over the past five years.”
All in all, the economy is on the up as the threat of the global economic crisis weakens, which means people are more willing to spend their hard earned cash – an overall positive sign for the retail industry.
In the aforementioned report, IBISWorld predicts industry revenue will increase to $2.76 billion by 2017-18 at an annualised 1.8 percent over the next five years.
“Retail demand for personal accessory products will stem from continued income growth and a recovery in consumer sentiment, which will boost the spending power of consumers.”
“Real household disposable income will increase over 2012-13, boosting the spending power of consumers and enabling them to better afford the higher price-tag attached to genuine leather products,” the report states.
“Consumer sentiment will increase over 2012-13 due to prevailing low interest rates and an overall upturn in the domestic economy.”
LAUBMAN AND PANK
Optometry business Laubman and Pank specialises in a product that is no doubt a necessity for those with poor eyesight – glasses, and according to national sales director Ian Taunton the brand specialises in assisting vision impaired Australians.
“We have qualified optometrists and qualified dispensers in all of our stores. We look at people’s eyes and understand how we can help them see better,” he says.
The team at Laubman and Pank pride themselves on their ability to deliver both excellent customer service and an extensive product range.
“We have amazing brands of sunglasses and optical glasses. We stock the world leading brands and a huge range within those brands such as Ray Ban, Oakley, Prada and Tiffany,” explains Taunton.
“We are also passionate about our customer and tailor the needs of each individual to what we give them as a vision correction – whether that is contact lenses, sunglasses or eyewear, and we take their geographical location into account.”
The brand has developed a range of initiatives to ensure franchisees and their staff embody this philosophy and in turn deliver high quality customer service.
“We talk about the Laubman and Pank experience, which is the experience we want to give to our customers and our people. It forms a very robust culture within the business, which transfers across to our customers,” Tauton says.
New franchisees take part in the Newstart Program, which covers everything they need to know to run their business successfully.
“There is ongoing education by way of an annual conference, where we get all of our franchisees together for a few days, and we have meetings on a state by state basis.
“We provide specialised education for our optometrists through The Institute of Learning, which ensures they continue to offer our customers state of the art services,” adds Peter Baily, the brand’s director of franchising and acquisitions.
Laubman and Pank offers extensive ongoing training and support in the form of an online communications hub and operations team.
“All of the resources a franchise partner needs are available online through Magnify, and franchisees can communicate with one another via online forums,” says Baily.
“Our operations team also provides a great deal of support – we have regional sales managers who liaise with and visit franchised stores on a regular basis, we have a weekly newsletter and provide marketing support to help franchisees promote their businesses effectively.”
While only about 10 percent of Laubman and Pank’s stores are currently franchised, Taunton explains the brand has big plans for the future.
“We are reasonably new on the journey but absolutely believe it [franchising] is the strategy moving forward for Laubman and Pank.
“We are currently looking to franchise some of our corporate stores and are also actively looking for network growth – we are very keen to grow and expand our network distribution within the markets that we play.”
They believe Laubman and Pank is a worthwhile investment because the brand has secured relationships with both Medicare and a number of the country’s largest employers.
“We are part of the Medicare system and are actively involved in business to business work, for example, we go out to mining communities and service the needs of employers who are required to provide their employees with eye care and eye protection services,” says Taunton.
Both Taunton and Baily believe Laumban and Pank offers franchisees a number of benefits that food franchises do not.
“We provide great products with good margins and the hours are reasonable – you don’t have to get up at 2am to bake bread,” says Baily.
Taunton, who has a background in the food franchising, noticed a number of differences between the two industries when he joined the brand.
“Franchisees don’t have to manufacture a pizza or a loaf of bread on site, which means they can focus their entire energy into delivering solutions for the customer as opposed to manufacturing and developing the product in store,” he says.
Stay tuned for part two of this feature, where we take a look at jewellery franchise Pandora, and alterations company LookSmart.