Talking shop: Shane Anselmi, Merchant 1948
Welcome to Talking shop, a weekly series where we interview the head of a New Zealand retail business about their growth plans and challenges, and get their thoughts on the latest business trends.
This week, we’re featuring our interview with Shane Anselmi, the CEO of footwear company, Overland, which includes brands Merchant 1948, Deuce, and Mi Piaci.
Inside Retail New Zealand: Can you tell us a bit about the history of Merchant 1948? I know the business was started by your grandfather…
Shane Anselmi: My grandfather, Guglielmo (Bill), was an Italian immigrant who settled in the King Country in the 1930s. He worked hard and became a very successful farmer but was also quite entrepreneurial and after helping a friend in a business deal in 1948, ended up with three small King Country shoe stores. My father Tony, who was one of six children, much preferred working in the shoe stores to the farm. So, in the 1950s, he bought the stores from his father and grew the company – opening more discount shoe stores, as well as a shoe factory called Fabia, that became one of the country’s biggest.
Having spent my school holidays on my uncle’s farms, I wanted to follow in their footsteps and become a farmer. But two years into an Agricultural Degree at Massey I realised the farming life wasn’t for me! I got involved in Dad’s shoe stores, called Shoetown, in the late 1980s and, not seeing a future selling discount shoes out of high rent malls, came up with the Overland concept in 1990.
This new concept was a success – allowing us to grow to 35 stores by 2010. We’ve since opened Merchant1948 stores as well as rebranding our existing Overland stores. In summary, we’ve grown from the original eight Shoetown stores in 1989 to around 60 stores now under the brands Overland, Merchant 1948, Mi Piaci and Deuce.
IRNZ: Any business that survives several decades in the retail industry has got to adapt. What are some of the biggest adaptations, or changes, Merchant 1948 has gone through over the years?
SA: Innovation is one of our company values and we have a history of trying new ideas and concepts over the years. With our retail stores, I mentioned how my grandfather started with three King Country shoe stores in 1948. Fifteen years later my dad changed this old-fashioned country footwear model, with its focus on service, to a discount model called Shoetown. This worked well for many years and the company grew to around 10 stores.
When I joined the company in 1989, I created the more premium Overland concept and put the focus back on creating a full-fashion footwear brand known for service and quality. We grew that to 35 stores, and in 2003, we opened our woman’s boutique concept Mi Piaci, which has now grown to 15 stores, including online.
Then in 2012, with our move to Australia, Merchant 1948 was created.
The problem with the name Overland was brought to light many times during my buying trips to the northern hemisphere.
People often ask why we changed the name when we opened our first store in Melbourne… The problem with the name Overland was brought to light many times during my buying trips to the northern hemisphere. When I told people that we had shoe stores called Overland they immediately assumed that we sold outdoor, hiking-focused footwear. It became obvious there was a disconnect between the name Overland and the experience – so we needed to come up with something new.
We’d always sold well-made on-trend shoes to women and men, so we cast back in history to look for this new name. This took us full circle, back to my grandfather Guglielmo, who was great at buying and selling, always adding value. He was a real merchant. So, in recognition of my grandpa, and the year the shoe company started, we came up with Merchant est. 1948.
This seemed to resonate with our values, and we created a Merchant 1948 fit-out that combined a feel of provenance, history and heritage.
Our new stores were well received, and we are slowly changing all of the existing Overland stores in NZ to Merchant 1948 as leases come up, and have been doing so for the last six years.
On a different note, one of the big adaptations we’ve had to embrace recently (we’re not alone with this), is the huge shift to online and the digital world, where in order to survive you need to be a true omnichannel retailer. We feel we’ve made great progress here but know we still have a long way to go.
In addition, there has also been a footwear specific move away from traditional leather shoes to sporty, athleisure looks. More than ever, fashion is becoming more casual and sports-led; both at work and in our free time.
Another adaptation that has helped us respond fast to these industry changes has been setting up our company-owned factory in China with a sports line and fashion line. This allows us to try small runs of new styling in both sneakers and fashion to find a trend. Once we know what’s working, we can move fast with repeats and direction. This gives us a real competitive advantage.
IRNZ: Are there any changes you think you need to make now to survive the next several decades in retail?
SA: Very much so. I’m a huge reader and a few years ago came across a book called The Human Brand, which tells us that people judge brands and organisations much the same way they judge individual people. And we judge the individuals we meet based on two things. One is how competent they are at their chosen vocation, whatever that is, and the other is their warmth. The trick is to have a nice balance of both – just having one doesn’t work so well.
For instance, if you meet someone who is incredibly competent at something, but there is no warmth (or empathy) about them, this can bring up feelings of envy and suspicion in you. On the other hand, if you meet an incredibly warm person, but they have no competence, you feel sorry for them. Think about it, we’ve all met people in both camps…
However, when you meet someone who has a real competence about them – and a nice warmth – these are the people you want to be around, have a relationship with and be friends with.
I always tell our teams that there is a sea of shoes out in the world to buy, but people make their buying decisions based on emotion (before anything else).
This nice balance of being both competent at what you do, and being warm at the same time, is equally important for brands and organisations. There are so many great brands out in the world that do both so well; they continue to inspire us. Some examples are Patagonia, Lululemon, Chobani and Zappos.
Our competence comes with our design capability, our sourcing and manufacturing skills, logistics and the systems we have developed over the years. Our warmth comes, for example, in the way we engage, inspire and grow our people in their work; and in the way we give back to the community.
With engaging our people, we have been voted NZ’s Best Workplace four times in the last six years.
Regarding giving back, we all know there is a big problem here in this beautiful country that we live in. Simply put, too many of our young people seem to struggle with the challenges of life – resulting in a youth suicide rate that is the highest in the world. This is certainly something I can’t understand, and we wanted to help. So, we set up a program with our sneaker brand Deuce and formed the ‘Young Hearts Project’ which raises money to support, inspire and build resilience in our young people. Over the last five years, we’ve raised over $1.3 million for this very worthy cause.
Our people love being involved in these initiatives and really feel like they are making a positive difference in their daily work.
IR: How was FY19 for Merchant 1948?
SA: It was a tough season, but we feel we are staying ahead of the competition. There seems to be more discounting and off-price promoting than I’ve ever seen. The challenge is while discounting can be an effective short-term strategy to get people to buy, in the long run it severely undermines your brand. The reality is we are having to promote more than we would like to with price levers and similar strategies to stay in the game, but we know we need to execute better in other ways – and are making good progress with this.
The market is always giving us feedback. It can be brutal at times but the need to stay light on your feet and always trying something new is key.
IR: What are your top priorities at the moment?
SA: I always tell our teams that there is a sea of shoes out in the world to buy, but people make their buying decisions based on emotion (before anything else). So, it’s vital we have a strong emotional connection with both our people and our customers – and by being a company that is competent and warm, we know we will make that emotional connection.
There are things we do to grow emotional connection with our customers. One of the best ways I know is by using the ‘power of story’. As humans we are hard wired for story – it’s in our DNA, so we have a real focus on getting stories about who we are and what we do out into the market. That continual focus to come across as being competent and warm is always with us. The dilemma we all face is ‘business as usual’ always seems to take priority – but we know we aren’t alone in this battle.
IR: What are some of the biggest challenges your sector faces?
SA: As mentioned above, adapting to this new digital reality is huge and an ongoing focus.
The other is always being on-trend with our design. Louise, my wife, heads our design and buying department and does an incredible job with her team staying on top of this. The market is always giving us feedback. It can be brutal at times but the need to stay light on your feet and always trying something new is key. This is another reason we have invested so much in our own manufacturing.
There is a huge amount of creativity, innovation and design talent in New Zealand retail.
IR: How is the Australian business going? Do you have plans to open more stores there?
SA: We’re showing good growth in Australia at present, but it’s been quite a journey. The landscape there is very competitive; and it took us a while to find our niche. But over the last 12 months we have grown well; raised the awareness of who we are, and we’ve tried some new things.
One new initiative is a concept we put in to our Chadstone Merchant 1948 store called ‘Merchant Workshop’ which pushes the sustainability and craftmanship buttons. Our Workshop has a full repair suite and offers personalisation where we can monogram bags and sneakers for you. In addition, we also have partnered with Vibram, the Italian sole maker, and provide Vibram upgrades in our Workshop. For instance, if you were buying a pair of our Portuguese men’s shoes and paying $230, you would get a well-made shoe with a great sole. However, if you opt for a Vibram upgrade, you will pay another $30-40 and we’ll upgrade your soles to full Vibram, which will more than double the life of those shoes. Vibram upgrades work really on our women’s corporate shoes as well, adding comfort, longevity and grip to our beautiful heels. We are very excited to be putting a full Merchant Workshop in our new Westfield Newmarket store in the next few months.
We feel we have a big future in Australia and plan to grow carefully there as opportunities come up.
IRNZ: What do you think people most often overlook about the New Zealand retail market?
SA: There is a huge amount of creativity, innovation and design talent in New Zealand retail. Being so isolated, Kiwis open themselves up to the world and continually try new concepts, borrowing from the best. I feel we are very lucky to live in this beautiful country – but also feel we have responsibility to give back to our people and continue to improve and grow. This is my biggest joy in life.
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