Pumpkin Patch, marketplace pay off for Catch Group
The e-commerce group’s CEO Nati Harpaz – who is now preparing for a busy 2018 as bricks-and-mortar retailers step-up their digital strategies to capitalise on the growing influence of online shopping – said while online retailers have traditionally struggled to capture deadline-conscious shoppers in the lead up to Christmas, planning ahead has delivered results for the company, capping off a year that included everything from rebranding to high profile commercial deals.
“Christmas was our biggest sale period in the history of our company,” Harpaz told Inside Retail. “We planned well this year and had all of the products land early, so they were available for the top period.”
Technology, appliances and furniture were the e-commerce group’s strongest categories over the holiday period, while Pumpkin Patch’s online relaunch bolstered fashion sales as the next best performing category.
Catch is now heading into the new year with millions in additional revenue under its belt as its marketplace offer approaches its first birthday in June, having already grown to account for more than 15 per cent of group-wide revenue.
But while online retail is growing several times faster than broader retail spending moving into 2018, there are competitive headwinds on the horizon, not least of all from new entrant Amazon, which discounted aggressively on Boxing Day offering 40 per cent off fashion and a range of two-for-one deals on CDs and DVDs.
Harvey Norman chairman Gerry Harvey attributed an increase in competitive intensity on Boxing Day to the American online giant and the media-hype around its launch in Australia.
Although Harpaz was less concerned about Amazon, conceding that Boxing Day sales slowed, instead pinning the competitive intensity on bricks-and-mortar retailers investing more heavily in online.
“I don’t think Amazon has anything to do with it. I think the bricks and mortar retailers stepped up their online game this year with a lot more promotions and discounts. It increased the competition, but I would guess it had a significant impact on their profitability,” Harpaz explained, also noting that Catch was less aggressive on Boxing Day this year.
With many bricks-and-mortar brands having already flagged record investment in digital and online in 2018 Harpaz is gearing up for more direct competition with the big department stores, with Myer having also launched a beta version of its own marketplace offer.
Queensland University of Technology Business School associate professor Gary Mortimer said the elevated level of online competition over Boxing Day is unsurprising given that established brands are having to work harder to entice customers to spend after a year of elevated discounting.
“From close of business on Christmas eve, multichannel players were pushing to say that they’d release sales literally at 12:01 on Boxing Day,” Mortimer said.
Shoppers are tipped to have spent more than $2.38 billion on Boxing Day this year, but official figures on holiday trading won’t be available until February.
Nati Harpaz, CEO of Catch Group, is the chairman of Octomedia, Inside Retail’s parent company.