Profit in the provinces: how regional retailers are finding niches, regaining confidence and fostering community spirit
When NZ Retail last visited the provinces with 2016 feature A change of heart, retailers were feeling the pinch, the tone was grim, and heartland New Zealand seemed to be lined with dormant main streets and dusty shops failing in a world of ecommerce. Fast forward a couple of years, and the regions seem to be finding their own rhythm, stepping up their game, and banding together to ensure survival.
There’s a real diversity in the response to the challenges and opportunities across New Zealand, says First Retail’s Chris Wilkinson. It’s partly related to the economic performance of respective regions, and partly to the civic support of town centres. Naturally, he says, the better performers are in areas buoyed by a wider success through tourism, up cycles in the primary sector such as apples in the Hawke’s Bay and dairying in the Waikato, and population growth. In other areas, retailers are able to step up, together, in supported initiatives.
“Where councils are actively supporting resilience and growth, the retail sector develops a collective response. The key thing is strength in numbers, which is best achieved in a concerted, town-wide approach, rather than a few retailers trying to achieve change – which just doesn’t have the same cut-through.”
Working together seems to be a constant theme for success. If a big box store is part of a town centre with strong pedestrian connections and a beneficial relationship to nearby businesses, then it adds value, says Wilkinson. But turning its back on town centres and becoming destinations in their own right presents a problem.
There are still the traditional bricks and mortar retailers closing their doors realising ecommerce is an essential and not an option, says Wilkinson. There’s also the influx of hospitality businesses, as consumers shift their discretionary spend towards experiences and away from goods and services. Retail spaces morphed into offices with non-active shop frontages also alter the look and feel of a town centre, as do the larger store vacancies which are staying empty longer, he says.
But talking with our retailers, we find great strides are being made in the provinces. Although remarkably different in location and niche, smart retailers are finding their place in the real and virtual worlds, doing things their own way and finding their place. Our regional councils are also playing their part, facilitating development and initiatives to revitalise their corner of New Zealand.
Crafting a niche
Keeping her store’s products fresh and new is essential to attracting a steady stream of customers, says Jillaine Murray, owner of Empire Arts and Collectables in Paparoa, Northland.
On the state highway to Dargaville, Kai Iwi Lakes and the Waipoua Forest, the location provides a reasonable amount of through traffic. The customer base comprises a 50/50 split between people passing through and loyal locals who love what Murray’s doing and are avid supporters of both the business and its owner.
Murray opened Empire as an outlet for her own art and craft, made primarily using recycled materials or repurposed items. Initially selling her own work and that of just seven others, the store now supports 29 like-minded artists, their work hand-picked by Murray.
“Everything has to have a story,” she explains. “It sounds a bit cliched, but it has to have some soul, to have been made with some love and care, and it has to be something that is different from something I might find in another shop. If it’s a candle range, it has to be something I haven’t seen anywhere else. If it’s a common everyday item, it has to have something which sets it apart from other things in its genre.”
In tune with the Empire ethos, Murray uses well-worn pieces of furniture and found items as part of the displays, rather than a new, sleek and shiny interior. The physical store enhances the tactile elements of the works, something which doesn’t always translate well in photos.
“It makes a big difference to sales when people can see the products, carefully displayed to show them off to their best advantage.”
The unique spot on the Northland highway does throw up a challenge when traffic drops off through the winter months.
“I think shops in the area feel the downturn in traffic and business more keenly than shops in busier locations,” Murray says. “But it doesn’t die completely! And I just take the opportunity to reduce my open days at that time of the year and focus on making a stockpile for the crazy busy summer months.”
Social media plays a huge part in staying in touch with customers and passing tourists when they return home, with Murray using Facebook and Instagram most days.
“It’s vital to stay in touch with my customer base who live further away. It generates sales, not a huge percentage of my overall sales, but sales nevertheless. It’s often the case that a group of customers will get together and make a trip to the shop, based on an item I’ve posted on social media. I’ll give them a card, and suggest they follow Empire to keep track of new products coming in.”
Retail, but not as we know it
Emerging from the rubble of the old Tauranga City Council administration building is a carefully curated container city, about to move a new kind of retail into the CBD thanks to Rachelle and Chris Duffy.
The dynamic duo are the hearts and minds behind Little Big Events, the company which turns spaces into places and brings communities together. The project is ‘Our Place’, a semi-permanent project creating an area to support and engage the community with spaces for retail, social enterprises, start-ups, and events such as fundraisers, meetings, and workshops. There is a mix of retail including food and beverage, home decor and gifts.
The retailing environment has changed considerably since their store in the CBD ten years ago, says Rachelle Duffy. Opened during the recession, the store was a blend of high-end and vintage fashion, and a precursor to how they conduct their business today.
“The principles of retail are still the same, whether you’re a high-end store, or an artisan creating clothes and selling them at a market,” she says. “It’s getting to know about the brand, rather than the branding. It’s about getting to know your community, who they are, and what they want.”
The Little Big Markets will always be their ‘hero’ event, says Duffy, nurturing artisans in their creative businesses and providing opportunities and connections which often lead to collaborations and retailing online or in bricks and mortar stores.
Our Place fills a new need for those retailers wanting to have a space of their own, either as a more permanent resident or a pop-up shop, and also gives the opportunity for artisans to work together.
“There’s definitely a different way of doing retail now,” says Duffy. “It’s not just me, myself, and I, being narrow-minded and thinking everyone is in competition with you. It’s about collaborating, finding out what your strengths and weaknesses are, and working with someone to be stronger.”
Our Place is also a space where retailers can do more than just sell their products, explains Duffy.
“It doesn’t matter what you do in retail, there are other ways you can engage with your community as opposed to selling to them. For example, offering workshops and special evenings such as fashion shows, where you engage and make customers feel like part of your business.”
Duffy says herself and Chris have mixed emotions about the Tauranga CBD, feeling sorry for it but also seeing it as an opportunity.
“Our Place is about bringing something different to the CBD. We need to be the change we want to see. We know we can create the vibe and we just needed a place to do it.”
While the initial one-year lease might lean towards a sense of temporary, the creative design and ethos means this element is a positive, not a negative. The 30 or so containers will be divided equally into anchor tenants and pop-ups.
“This will keep people stimulated and interested, as opposed to saying we’ve been here, we’ve seen it, and we’re done.”
With other long-term plans for the site, Duffy says Our Place is set up to be an easy move, with ample opportunities to continue to use land within the CBD.
“Tauranga city is going to look very different in five years compared to what you see now. If we get people educated by what we’re doing temporarily, there will be a positive impact when the planned developments do come through.”
Building a brand by telling stories
In the smaller towns and cities, retailers have the advantage of setting up shop with costs that, for the most part, remain within reach.
“While our business might be well received in a bigger city owing to the population and diversity, the overhead costs wouldn’t have been manageable for us,” says Bridget Laugesen, who owns the Tauranga vintage store Ooplah! with husband Shane.
The busy location of the Mount was side-stepped, as although it offers the foot traffic and visitors, retail space is very competitive. The location they settled on is now a destination shopping area, with support from other independent shops all offering something different.
The pure nature of Ooplah! provides the often-elusive point of difference. Everything in the store is authentic vintage, original, and perfectly imperfect, hand-picked in France and brought home to the store. There’s even a wish list for customers who have a particular item in mind. In the store, customers have a retail experience they value – not only does the Ooplah! brand have a story, but so does each piece of stock.
“People enjoy being in our store,” says Laugesen. “Many of our vintage items are a bit unusual or quirky, and you get a better sense of these in person than we can capture in a photo. We hand-pick all our stock piece by piece in France, so we have the stories to tell of where things came from and how they were used. We also seem to do a lot of chatting! For customers and children we have a 1980s vintage spacies machine for them to play on.”
Support is key to the success of indie shops and the value of having a strong network makes the day-to-day challenges a bit easier to manage. For Laugesen, having a premise with Follow the White Rabbit, a gorgeous gift and vintage boutique, means rent, hours, and customers are shared and there’s cover for when they’re busy restoring furniture and treasure hunting in France.
Admiring a store from afar via social media gives another way for stores to entice customers who want to buy online or are potential tourists to the area.
“We have a lot of unique and sometimes large pieces, and we wonder if the person who wants that particular item in their home is perhaps living outside Tauranga. Social media is a way of us reaching further afield and getting the out-of-town visitors popping in while they’re holidaying here.”
When people see the council taking leadership and investing in their town centre, it gives confidence to the rest of the community, says Ross Dunlop, Mayor of South Taranaki.
“There was period where things were just left it to the marketplace, but councils have a real strong role to play in showing leadership. It’s not always necessarily about being major investors, but about creating more positivity.”
With the Hawera town centre reaching its 100 year milestone, it was well due for a plan to move it into the current day. High vacancy rates in the centre were reducing the vibrancy of the area, and although there was a good arrangement of key retailers with ample parking, there was a limited connection to the main street.
Working together, the South Taranaki District Council and Bizlink Hawera developed the Hawera Town Centre Strategy with the vision for a distinctive, welcoming, attractive and vibrant place to live, work and visit. The project, with a budget of around $11 million, includes a new library, cultural and civic centre, improved pedestrian and car park connections, and redevelopment of the town square for retail and office space.
Opening just over a year ago, Campbell Lane is an open-air walkway with lighting columns, paving, trees and seating, improving the use of the free, unrestricted parking. Its neighbour is the new Warehouse Stationery store, with several stores opening and old ones being refurbished.
“There are four or so new shops which have opened over the past year by young people and families who have come back to the town,” says Dunlop. “They are sharing ideas and have more confidence in the area.”
Countdown is starting its redevelopment, which is changing the way the car park works, opening it up more to the main street. Dunlop says there were options for the supermarket to move outside the CBD, and so the decision to stay is a huge win for everyone.
He concedes there is a cloud of apprehension over the future of the oil and gas sector in the Taranaki region, but for now the potential implications are a hopefully a long way off.
“It’s not easy in rural New Zealand, but it’s certainly a lot more positive than it was a couple of years ago.”
Finding value in the provinces
Retailing in a region with a low-density population can be challenging, but also has some key advantages says Rachel Hansen of Freedom Kids, an ecommerce business selling gender neutral and ethical clothing for kids.
“We live in the Wairarapa because we enjoy provincial New Zealand, and from a business perspective it’s ideal because I can still easily pop over to Wellington for meetings. However, we simply don’t have the foot traffic that larger centres have.”
The margins are smaller than the bigger clothing retailers, so they need a different business model, says Hansen. The goal is to be at the leading edge of the change – educating people and providing a better option for busy parents.
“Online is the solution that works for us, and in our industry an online store is crucial. If I only had a bricks and mortar retail store in Masterton, my customer base would be very restricted.”
The ecommerce store means Freedom Kids reaches its audience no matter where they reside, and provides education as well as products.
“As people are living even busier lives, they need their shopping to fit with their lifestyle. We find our busiest time of the week tends to be Friday evening – I imagine these are parents who’ve got their kids to bed, who’ve finished their week exhausted and are enjoying some shopping while dressed in their PJs on the couch!”
The store’s website has a wealth of information about who made the clothes, fair trade, sustainability, gender expectations, and also about the business owners.
“Customers can fully research our products and our business before purchasing. I’ve never seen this in as much detail in a physical store.”
There was also a huge gap in the market for gender-neutral and ethical clothing, and the online store means an immediate impact on the children’s clothing retail scene both nationally and internationally.
Selling only through an online channel offers the further advantage of being extremely agile, says Hansen, as does a very active VIP Facebook group with customers helping with purchasing decisions.
“Recently someone asked to stock Fairtrade winter coats. Within 24 hours I had placed an order with a supplier to custom-make these for us, and they were up on the website ready for pre-sale.”
A social media presence is ‘absolutely crucial’ says Hansen, especially with no advertising budget and a reliance on word-of-mouth promotion. It’s a venue for education and promoting the social justices they care about, and a place for not only promoting products but also having online conversations about Fairtrade, sustainability, and how traditional thoughts around gender must be discarded to allow children the freedom to be themselves.
Hansen concedes being only online means missing out on some elements of customer relations but finds there are ways to compensate.
“I miss out on the face-to-face interaction with customers, however, as our clothing is quite recognisable I see our clothing out in the ‘wild’, and it’s always fun to introduce myself. Customers send us photos of their kids in our clothing, and our online group is really active, chatting about new ideas, and sizing, with customers giving each other feedback and advice about the clothes. So although I am not meeting customers physically, we have established many loyal relationships.”
One other disadvantage is people can’t feel the fabric of the clothing, or try them on, says Hansen.
“But what happens is once people have discovered the brands they love, they know what the fabrics and the fit is; online purchasing is also convenient for busy parents. We also take the worry out of purchasing with returns and exchanges.”
Partnering with community organisation gives stores with a social conscience the opportunity to do amazing things, raising the profiles of both parties.
“This month we’re working with The Aunties, a group who provide support and serve as kaitiaki to the vulnerable, particularly those who have experienced domestic violence. We’re helping to raise their profile and donate money and clothing to their causes.”
Reaching new heights
Porirua’s recent City Centre Summit engaged the minds of 150 key business and community stakeholders to shape the future of Porirua.
“There’s a great sense of momentum in Porirua,” says Mayor Mike Tana. “It’s picking up pace – with high-profile business sales, residential living coming to our city centre, government departments moving in, and other businesses starting up or moving to Porirua, with Torpedo 7, NZ Uniform and Turners three of the latest.”
Driven by the Council’s City Centre Revitalisation plan, the event included a wide group of retailers from across the city who have a strong commitment to coming up with solutions to enable more business to happen in the city.
“The most exciting part of the event was bringing people together who hadn’t been in the same room before,” says Tana. “Retailers were able to connect with developers and landlords, and conversations have been started which will have a profound impact on new retail development in the city.”
Porirua is working to enhance the city centre, creating new public spaces, introducing residential living to the city and increasing the diversity of business set up there. Since the opening of North City Mall in 1990, the city centre had declined, with a high number of vacant shops and a degraded public environment.
There’s new activity in the centre with the removal of a number of carparks to create a green space and a kiosk with public toilets and two small retail outlets, The Little Goat and Soul Shack, who had previously operated food trucks in the area. Further revitalisation is now underway to improve the connection to the streamside, and create a new children’s playground, new seating and a large canopy to provide an attractive and inviting public environment.
To support retailers, there are several initiatives underway.
Pop Up Porirua allows small business owners, artists, and community organisation to establish a foothold in the heart of the city centre or along the waterfront in a pop-up shop. It is an initiative of Porirua City and the Porirua Chamber of Commerce, and has already seen success with clothing stores, theatre companies, restaurants and art exhibitions.
“The Harbour’s Edge Pop-up has activated part of our city that hasn’t been used in this way before,” Tana says. “There’s been a lot of interest from other businesses wanting to get on board and there is the potential to explore more development there.”
Businesses who want to improve the look of their shop can do so with the Building Facade Programme. The Porirua City Growth team is helping retailers navigate any business hurdles, connecting them with specialist advisors, potential investors, and government assistance. Business owners can also speak with a business advisor and talk through needs for starting a business, from assessing feasibility, or registering a domain name, to the pros and cons of where to locate or how to find other small business support.
Porirua’s strong growth contributes to its ability to support everyone in the city and the surrounding region. Following the 2016 earthquake, the city fared well compared to other cities, with the resiliency resulting in several government departments locating there, and people able to work locally or travel to work against the traffic. Accessibility through Transmission Gully is providing greater connections throughout the region, and encouraging investors to see the city as the centre point of the region.
“Our resilience encourages businesses to desire to be in the area,” says Tana. “Previously vacant shops are being filled, and businesses are taking up the opportunities to build on our reasonably-priced land. For example, the new 6000 square metre Holden dealership is being built, and expected to open in December.”
New residential developments, including the Kenepuru Landing and the new apartments in the old Post Office building, are also game changers for creating more opportunities for businesses, and a demand for 24/7 business offerings like retail, evening dining, and bars, he says.
“The Council’s investment in the city has also increased investor confidence. Our Summit was proof of this confidence and commitment to be part of the journey to making the city an even more desirable place for businesses and community.”
Building an identity at homebase
Being located slightly out of the city centre is proving to be a smart choice for Anna Shone’s business Home-lee.
“After having a brand presence all over the country, it was time to have a full representation in our hometown,” she says.
The boutique for the fashion brand, famous for its drop-crotch ‘apartment pants’, is in Richmond just south of the Nelson CBD, and on a main road so it’s not too ‘out of the way’ says Shone. While the brand is stocked in over 70 stores nationwide, having a boutique at the place where the clothes are designed is a creative point of difference.
“We realise that until you are familiar with a brand and its fit and sizing, many people are reluctant to buy online,” concedes Shone. “Customers are always happy to learn we do all of the designing here, and we work had to make it a fun and inviting place to shop.”
Designing at homebase also means being able to take on customer feedback and adjust and design according to their needs.
“It’s so important to listen to our customers”, says Shone. “Face to face time in the store is invaluable. Social media is also huge for Home-lee and without it we wouldn’t have any kind of growth.”
Since the boutique opening in April, support from the local community has been amazing, says Shone.
“We may have been lost in a bigger city, but we have found in the short time we’ve been open, that our customers have enjoyed hearing our story.”
Bringing some love to the CBD
When we last visited Gore in the deep south it was setting out on its journey to be the most commercially resilient provincial town in New Zealand.
Working with First Retail Group, the Gore District Council launched the GoRetail campaign in 2015 to counteract the increasing number of vacant mainstreet shops, an increase in online spending by locals, and more shoppers frequenting neighbouring towns instead of shopping closer to home.
The initiative is an ongoing success as the town continues to evolve, says Chris Wilkinson.
“It’s encouraging retailers to transform and for consumers to prioritise spending locally. The mayor, councillors, and the council executives ‘get’ the value of the town centre to the socioeconomic wellbeing of the district.”
Mayor of Gore Tracy Hicks says the most important change over the past couple of years is the connection between retailers. Competitors are no longer the shop across the street or around the corner, they’re the shops on the other side of the world.
“The strength of GoRetail is making sure people know what other people are doing – and the realisation that we’re all in this together. It’s not just one shop, it’s the whole town. Actually, it’s wider than the town, it’s the whole district working together to provide services and products which are desirable.”
It’s an exciting time in Gore, says Hicks, and boosting the town’s visibility throughout the district makes it more attractive for people further afield to visit.
“The CBD is the heart of the retail centre for the district, and it’s absolutely vital for the wellbeing and vitality of the town and the wider region that we all play our part to make sure it survives.”
Further work is being done on branding, with the ‘Love Gore Shop Local’ green button logo donning doors, windows, and vehicles of retailers and businesses throughout the Gore township as well as appearing in retailers’ communications and advertising. Shoppers also enjoy free parking days, and free WiFi, currently being bolstered for wider reach and better quality.
A pivotal part of being able to provide these attractive elements to Gore is the ability and the willingness of council to have the resources available for their retailers, says Hicks.
“Retailing is not easy, whether you’re on Fifth Avenue or on main street Gore. What was acceptable five years ago is not necessarily the case now; there’s the constant need to adapt to the changing conditions and go with it.”
This story originally appeared in NZ Retail magazine issue 756 June/July 2018