One of Australia’s largest retailers, Cotton On Group, is making waves in the African fashion industry with its lean, ethical supply chain...
In 1988, 18-year-old Nigel Austin sold his first acid washed denim jacket in Geelong, Australia. It would be this sale that would sow the seed for fashion powerhouse Cotton On Group which, within 25 short years, has grown to become Australia’s largest global value fashion retailer, with seven brands, over 1,400 stores, and a footprint spanning 17 countries.
From Australia to the UAE, Brazil to Singapore, Cotton On Group has mushroomed in size over this short timeline, but one continent has clearly been pivotal to its success – Africa. Home to seven of the fastest growing countries in the world, Africa has quickly emerged as a force to be reckoned with in the fashion industry. Recognising this, Cotton On Group has kept a keen eye on the fast-emerging scene, opening almost 170 stores in South Africa, six in Namibia, with additional sites in the pipeline.
With over 15 years in the supply chain field, Phil Marais, Head of Africa and Brazil Supply Chain at Cotton On Group, has been the ideal candidate to make this vision a reality. He points out how Cotton On Group has hired people with boots on the ground so that the retailer can gain a true understanding of these regional markets and their supply chain ecosystems.
“For our regional markets, like South Africa, for example, the value of our assets and individuals is critical,” he explains. “It helps provide context to our team members so that we can execute the supply chain in that market, whether it's in South Africa or Sao Paolo, to the best of our ability with that local knowledge. Aligning with the group framework whilst adding that local twist is really important. Emerging markets like Africa and Brazil present huge growth opportunities for the group.”
The fashion industry is notoriously fast-paced, with new trends flying past today’s window displays in the blink of an eye. “In today’s social media dominated world, we know that we've got to have influencers in our corner. We have to tap into what we think is going to be fashion forward and value-based. It’s an exciting part of the business,” Marais says. Priding itself on this fashion-forward, value-based approach, Cotton On Group aims to be one step ahead of its peers, meaning time is of the essence. This has undoubtedly created a key challenge for its supply chain team but it’s one which Marais believes the company is more than prepared to meet.
“In our industry, speed is key,” he observes, “We need to have the stock delivered at the right time and it needs to be accurate so that when a customer walks through our doors they have a positive experience. We’re a fast fashion business that relies on speedy replenishment of stock. Therefore, if you’re doing anything that’s making you slower, you’re doing it wrong. This means if a t-shirt sells out in store and a customer returns tomorrow, the stock needs to be available so that they won’t have to wade through a pile of sizes or visit other stores to find their size.”
With a few clicks of a button, the rise of e-commerce has also helped strengthen the need for swift delivery but it has also added a new dimension for supply chain professionals to tackle. In January, Cotton On Group launched its online store platform and loyalty card for its South African operations. This has upped the company’s sales and the volume of products that need to be delivered.
“What was good yesterday, is average today and probably won't be good enough tomorrow,” reflects Marais. “Therefore, we need to be agile and adapt our model so that consumers can buy what they want, how and when they want to. Even in mature markets, we’ve been quite a big player in the e-commerce market. Now, we’ve launched our online operation in South Africa, we’ve seen a really nice uptake in volume through this channel of the business. We’ve also started a new wholesale channel with an online marketplace that stocks our brands which provides another channel for us to be able to offer our product.”
Relying primarily on word of mouth, rather than advertising and delivering a positive customer experience, is the bread and butter of Cotton On Group’s success. As a result, getting thorough feedback has been critical “We're engaging with our team and finding out what customers are saying through online feedback,” Marais says. “We’re learning from this feedback and I think that speaks to the company’s entrepreneurial spirit. We’ve got very inspirational leaders who really help drive us to be quicker and faster in unique ways.”
Drawing from its experience in the Australian market, Cotton On Group has replicated its e-commerce and supply chain solutions for the past several years in different markets. This has meant it could be smoothly adopted in regional markets in Africa. Marais points out how the company’s South African distribution centres are efficient and lean to make orders easier to tackle.
“Our distribution centres are set up to complete our online orders internally which made the execution of online a lot easier to manage,” Marais notes. “We’ve also got an online platform that has been tested in Australia but which has been adapted to our local market. This has meant that we have been able to quickly deliver that customer experience that people have come to expect from Cotton On.
“It’s supply chain 101: if you add complexity it slows down the operation,” he adds. “So, we've managed to keep our business relatively simple. It allows us to be agile when adapting our strategy to meet the demands of e-commerce, for example.”
With plans to expand to Botswana over the coming months, it’s no question that Cotton On group has fine-tuned its strategy for success. Yet Marais is keen to point out that this wouldn’t be possible without a team that was entrepreneurial, curious and up for a challenge.
“I have experience in various warehouses in South Africa, but when I started my own journey at Cotton On I quickly realised that if you’re passionate about supply chain and want to grow your career, then the place to do that is Cotton On,” Marais says proudly. “You can see an entrepreneurial spirit in our business every day. We're led by people who expect us to take ownership of our function and execute it to the best of our ability. It’s also about having fun, engaging with your team and really connecting with them.”
Not only does the company foster the talents of its own people, but it’s also helping to enrich the lives of local communities across the globe. Today, cotton is one of the most commonly used natural fibres in the world with more than 25mn tonnes produced every year.
As a business, Cotton On Group has set itself an ambitious goal to have 100% sustainable cotton throughout its supply chain by 2021. To achieve this it has developed a unique partnership with the Better Cotton Initiative and has launched its very first sustainable cotton program in Kwale County, Kenya, known as Kwale Cotton. Through the program, Cotton On Group works closely with farmers in Kwale to help them transition from subsistence farming to more sustainable cotton farming practices. In addition to funding the training and setup of each farm, the Group is committed to purchasing 100% of the cotton lint, which is of a premium grade. Since the project began in 2014, over 1,500 farmers involved, with many of those doubling their income since coming on board.
Additionally, thanks to the group’s philanthropic arm - the Cotton On Foundation - the retailer is also helping to empower people through health, education sustainability and infrastructure.
“We are opening schools in Uganda, Australia, Thailand, and South Africa, and have set ourselves a goal of creating 20 000 educational places by 2020” Marais concludes. “To know that by following your career aspiration at Cotton On, by enabling our customers to have a really great shopping experience, kids will hopefully get to go to school, learn new skills and feel empowered – is an amazing feeling.”