Enabling better shopper journeys and loyalty with City Beach

Warren (voiceover): This is Warren Hayashi, President of Adyen, Asia Pacific. And you're listening to Adyen’s Behind the Figures podcast, where we engage some of our top merchants in one-on-one conversations to get the stories behind their impressive business figures. For today's episode, we'll be speaking with Australia's leading retailer, City Beach. Listen on to find out how Adyen is partnering with City Beach to enable better online and in-store shopping experiences. Learn more about its strategies for digital transformation, adding new payment methods and how City Beach grows its loyal following.

Hayley: Hi, I'm Hayley Fisher, the Adyen Country Manager for Australia and New Zealand. Today, we'll be speaking with Rhian Greenway, Chief Information Officer at City Beach. City Beach is one of Australia's leading fashion retailers. They have a popular online store and over 60 retail stores throughout Australia. They stock 300 plus brands of some of the world's biggest brands across surf and skates styles. 

The partnership between City Beach and Adyen started in 2018 with ecommerce and then followed by point-of-sale. More recently, we've been partnering with City Beach to offer mobile wallets and the Buy Now, Pay Laters. We're excited to chat to Rhian today about shopping and payment preferences among City Beach shoppers.

How does he see the retail trends growing? And, as business landscapes keep evolving, how can retailers keep up?

Hayley: Hey Rhian, great to have you here. Thanks for joining us.

Rhian: Thanks for having me, Hayley. 

Hayley: To begin, can you please give us a quick introduction of yourself and your role at City Beach?

Rhian: Yup, no worries. My name is Rhian Greenway and I guess we have covered off in the intro. I'm [the] Chief Information Officer at City Beach; coming up to my 13th anniversary, which is a little bit longer than I thought I would stay. You never gonna plan things out that way. We're still doing a lot of really exciting stuff over there, [the] end of our digital transformation journey is almost upon us and I manage quite a large team that looks after all of that recently implemented modern technology from point-of-sale machines, all the way through to the website.

Hayley: So 13 years… how has City Beach and Australian retail changed over those years?

Rhian: Really interesting, right? I think I joined just after the GFC (The Global Financial Crisis) and so [it was a] really interesting time to retail [and] watching a lot of retailers close up. As a little bit of a – I guess, similar feels, what we're seeing now, is some of the retailers closing up as a result of COVID. But [you] never forget starting at a modern company; funny that all the systems were kind of DOS-based (Disk Operating System) or something not too far removed from DOS – you know, single screens, very ancient stuff, but [I] had done grinding in the business [during] where it was at the time. 

Hayley: As we record this podcast, a number of Australian states are still in lockdown. So how has the City Beach team adapted through the lockdowns and coming out of them? 

Rhian: We've been really lucky. Our head office and our distribution center are both based in Queensland. So outside of the recent, forced harsh lockdown, we only really had one of those for a small period of time last year. So [we’re] very lucky we don't have any stores in Victoria or South Australia. So the New South Wales lockdown, this time around is probably the biggest impact we’ve had since the start of the pandemic. 

Hayley: And as this is an Adyen payments podcast, it’ll be great if you could touch on how City Beach views payments as part of your overall strategy.

Rhian: I think they're incredibly important. The directors are slowly coming on that journey. We used to talk about Afterpay coming to the market and then Zip following soon after. And we got into a lot of discussions around, would you have Visa or Mastercard – you know, if you go all the way back to when cards first came out, there was no real decision to take one or the other, they were just there so you took them. And that's kind of the approach we've put on all the Buy Now, Pay Laters and different payments in the market is that, you can't not have something that one of your customers might want to use. It's been a difficult and bumpy journey for us to get where we are with all of them. There seems to be a new one to market once every six weeks and kind of keeping up with the ones that you feel are relevant to your customers is always hard. But recently, [we’re] launching most of the major players in store and launching a new website soon [with] the same collection of payment providers on there as well [that] we’re very excited about.

Hayley: If we look back on the retail industry – so 2020, 2021 – it got a lot of retailers rethinking about the experiences they offer shoppers. So, comparing with a few years ago, the conversations are less about online versus in-store and more about how brands can offer a seamless, frictionless shopping experience across any channel. And it'd be good to understand from your side, what are some of the biggest changes you've seen with your customers when it comes to shopping behavior across channels? 

Rhian: Okay, it's been a hard one. We’ve kind of conditioned as most retailers have in the online space that there's always a sale. You know, if you swipe that email, you might get one, two or three. There's always something that comes through. And so, trying to replicate that, I guess, excitement in the bricks-and-mortar space has always been quite difficult. Joining promotions across separate parts of the business has always been a real barrier for us as well. That mechanics and technology that exist in a modern web platform are always harder to replicate in a slightly older point-of-sale platform and linking the two is near-impossible. So, what we do our best with the offers that are presented online [is] to honor those within the store network but definitely bridging the two together so we have that seamless view of the customer across both channels, but not as mature in that space as we'd hoped we’d be by now. 

Hayley: And how do you – if you're not mature now – how are you planning to adapt to cater for that type of shopper behaviour? 

Rhian: I think loyalty is a really good gateway into that. I reference Petbarn almost daily at Head Office. I think their loyalty plan is amazing. You give them your phone number and it just follows you around. Whether you're shopping online or in-store, they’d know who you are, what you've bought, your pet's name – it's fantastic. If we can replicate something like that in the fashion space, I think it's a real winner.  

Hayley: Fantastic. I think it does show the importance of using data to understand your customers better, right? 

Rhian: A hundred percent.

Hayley: And, when we think about different customers, I always get this question about the demographics, right? So perhaps the difference of how a Gen Z or a millennial have expectations in terms of seamless shopping. Do you have anything you can share about the differences there that you have seen? 

Rhian: It's interesting. I mean, our demographic is primarily younger people. That's kind of the market we target. Then when we did some analytics about 12 months ago, we really found that it was a much broader range. You know, the mums and the dads, the grandmas and grandpas are shopping with us as much. A lot of those people have grown up with the brand, and so maybe an 18-year-old, 20 years ago is still shopping with us now because of the, I guess, the engagement piece that we had at the time has kind of kept you true to the brand. There's not a lot of retailers [who are] privately owned our size in Australia either. And I think that rings quite true for a lot of our customer base. 

Hayley: What a great success story as well.

It's clear more than ever that retailers need to keep up – not only with the latest looks – but the latest shopper needs. So, whether it's enabling a unified commerce experience where they buy online, they may pick up in-store or return in-store and then offer customers their preferred payment methods, whether it's a mobile wallet, card or Buy Now, Pay Later. And, you touched on the Buy Now, Pay Laters before and it's not surprising that we're going to ask about them as well. But, what are some of the more interesting trends that you've observed about those mobile wallets or the growth of the Buy Now, Pay Laters? 

Rhian: Look, I don't think anyone expected them to be as big as they are. If I look at the original days, we onboarded with Afterpay; Afterpay had a really small deck at the time and [it] said that [by] Day Three we’ll be in 30% of your basket, you'll have this huge sales uplift, and we all kind of joked about it – it was like, how could this be so good? And then, literally within a week of going live, you started seeing this upward trend. Originally, it was quite interesting to follow as it had this eight-week dip where everyone would pay off their Afterpays [and] they wouldn't have any money in their accounts and then would spike back up. And, that kind of gets normalized over a period of time. But what we're seeing now is all those other previous credit providers in the space, like Latitude are really trying to break in as well. We definitely saw payment move more towards them during COVID. So, you know, wherever you could delay payment is obviously what people would do if personal circumstances and finances are not known. So, you might not make that one big purchase, you might be happier spreading it out over a period of time. But if you look at, I guess, the large COVID event last year, that it kind of saw JobKeeper and those things coming to the market, it really saw just cash and card transactions shoot through the roof. People had available income that they didn't have previously. And the Buy Now, Pay Laters probably got a clip out of that, but not as much as they could have.

Unfortunately, they really own that payment space now and held up the rollout of Afterpay and the digital card. It's been interesting to say the least and seeing all the other providers move towards that model, I guess, makes the market penetration a lot easier for them as well. The commentary is always around each of those providers having a different demographic-based service. And so, if you can get them to come towards you because they can pay the way they want, hopefully you can get an uplifting sales particularly in that bricks-and-mortar space. 

Hayley: Fantastic. Just having the payment methods that catered for the consumers  however they want to pay. And so while payments’ need to evolve is more prominent, even in the last few years that retailers have been forced to digitize more quickly and even if it wasn't part of their digital transformation plans already – how has your strategy changed and what are you planning to do going forward? 

Rhian: As we look at international trade as a key thing for the next 12 months, we've only really considered historically the Australian Buy Now, Pay Laters. But if you go to America, the UK, there's a whole collection of them which, we hope, as market-prevalent as the ones here. But it's just something we never thought we have to really cater for. We finalized the bulk of our transformation journey in late 2019. So, just in time for COVID, I guess this is the best way to put it, and that sort of retires, I guess 80% of our legacy tech stack. So we had bespoke point-of-sale, bespoke Back of House – all those things that constrained us previously from being able to be dynamic in the space. So launching those just before Christmas that year was a great strength in terms of trading through. And being able to use those new systems to kind of, I guess, grow and modify and meet those customer needs a little bit easier and so I kind of reference some recently – onboarding a couple of developers for ERP (Enterprise Resource Planning) and they've allowed us to really deliver things like payment integrations, alternate ways of shopping, a whole heap of stuff that used to be timely and expensive with third party vendors – doing that all internally so we can control that transformation journey a little bit easier now and really cater to our customers’ needs.

Hayley: And then when you talk about transformation, in Australia, they have so many success stories of retailers, being so successful here, and then finding further success internationally or going global. What can you share about City Beach’s plans or what's next in terms of global expansion? 

Rhian: We've been global for a couple of years now. Historically with the Pitney Bowes Borderfree product, I think we're very early adopters of that in Australia and we really enjoyed the experience and they customized the site for regions. I guess this is the best way to put it, and offered us localized payment methods, in current currency, conversion of language as well in some regions. So it allowed you to kind of penetrate those international markets with a very light touch. When they pulled out of the market, we were a little bit shocked that we had to pivot and do something really quickly. And, we got another player at the moment who allows us to do it and international checkout of sorts. But it's not a great experience. It's all in AUD, it doesn't have localized payment methods, you can't use Buy Now, Pay Laters in different regions. It's really just Visa, Mastercard and PayPal, maybe, if we get it off the ground in the coming weeks.

[We’re] launching a new site later this year, going international with direct Visa is a key focus, something we’ve never been in a position to do before. And again, looking to leverage the relationship with Adyen to try and get some more localized payment methods in those countries as well. We do believe that it has a real difference to the customer experience if they can see the pricing in their local currency, but more importantly [to] check out in that currency as well. Trying to do the maths on AUD versus wherever you may be, unless you're in the space, it's not that straightforward. 

Hayley: Absolutely. I think there's a lot of lessons to learn about retailers going international, a few things that we find with our merchants when they're looking and going internationally. And, one thing you mentioned is already the currency or local pricing, that's what consumers want to see. Another thing is having those payment methods or the local payment methods that consumers want to pay in. While we might have the Buy Now, Pay Laters here in Australia, they may be different in each international market. Another thing is local debit schemes. So you might support them in those markets, so you mentioned going to the US where they have a number of local debit schemes at point-of-sale which you would be able to access as well. But it sounds like you're going to have the platform in order to be able to grow your business internationally. So, exciting times.  

Rhian: We’re very excited, a little bit nervous about every state in America having their own duties and taxes.We’re still trying to work that one out but we think it might be a little bit easier in some of the other regions. 

Hayley: Yeah, absolutely. Very exciting. We're looking forward to working with City Beach on your global expansion plans. A couple more questions. So, with City Beach being a very, you know, forward-thinking brand, what's your guiding philosophy when it comes to business and innovation?

Rhian: Innovations [are] a real, new thing for us. We’re just never in a position where we could link modern systems to our old system with any kind of real-time data transfer. So looking at things like click-and-collect, ship-from-store. All things we can see our competitors doing in the market, they're all just dreams, you know, at the end of some rainbow that we’re never going to get to. They're all things that are a reality for us now. And I think in the COVID world, click-and-collect and ship-from-store are potential opportunities to even be able to trade during lockdowns and the like. So we're looking at how we can leverage the store network more for those kinds of things. 

Hayley: And my last question, Rhian, is – what is one payment-related advice that you would share with industry leaders such as yourself? 

Rhian: Don't be afraid of the Buy Now, Pay Later space. I talk about it a lot, but for us, it was a fairly slow journey. We didn't onboard a lot of the players as quickly as I would have likely could have. Getting in there, you know, just adding them all, it sounds silly to have so many different payment types but like I said earlier, you wouldn't have Visa card or Mastercard, you’ve got to have both. So, it's the same as Buy Now, Pay Laters. If your customer has them and they want to use them, you need to provide that service. It's all part of “let your customer shop how, when and why they want”.  

Hayley: Thanks Ryan. It's been a pleasure chatting with you. Thank you so much for your time. 

Rhian: Thanks Hayley. It’s been great catching up. Hopefully, we can do this in-person at some point.

Hayley: Yeah. We look forward to it. 

Warren (voiceover): You've been listening to Adyen’s Behind the Figures podcast. We look forward to sharing more business stories with you. Be sure to follow and subscribe to get the latest updates.