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Stephen Meurs, Peter Pausewang and their Smiggle Smarts

Stationery is more than just an essential item for offices and school bags. These days, Smiggle is making it a much-desired fashion item. So read on to learn about Smiggle, the small company taking on the stationery big boys with its bright-coloured and funky range.

Smiggle – it’s interesting name and gets people wondering about the product behind it. This is the exact reaction Stephen Meurs and Peter Pausewang, the owners, want. “That was the main reason behind getting a name that was different,” explains Kate Martino, general manager of Smiggle. “It was all about creating that interest.”

Martino has been with Smiggle since its inception, working with Meurs and Pausewang to help bring the brand to life. All with extensive retail experience, they got behind the fashion stationery concept—originated by Meurs—with a belief they could capture an untapped niche.

Now, the founders of Smiggle are able to smile and giggle (hence Smiggle) at the degree of their own success.

Meurs designed, developed, sampled and started production of the first Smiggle range in late 2002, while Martino started looking for retail sites. Before long, Meurs and Pausewang realised there could also be great scope for wholesaling, so took the range and the concept to their first trade fair in Sydney. As late applicants, Smiggle were lucky to hear there was an exhibitor pulling out at the last minute and prepared for the trade show in just two weeks. “To our amazement the reaction we got was overwhelming so we thought, well we’re onto something here.” Smiggle then recruited a wholesale manager, so both the wholesaling and retailing arms of the business could grow in tandem.

In March 2003, with a clear strategy in place, Smiggle opened its first retail site in South Yarra. “We branded our product very quickly from the early days, and we did that simply by choosing where we sat our stores,” explains Martino. “We sat down as a team and worked out where we felt we needed to chase the sites and set up the original Smiggle stores. Given we’re all Melbourne people and it’s the city we know best, we purposely chose our sites in Melbourne close to schools, private girls schools and areas where we felt we could easily brand the product. But we realised for the retail aspect to grow we needed many sites,” she adds. “So from South Yarra we opened Southland, which was our very first centre store. We then opened Brighton, Melbourne Central, Hawthorn and so on. We now have 11 stores in Melbourne.”

Working In-house

While tackling the gift and homewares industry was initially overwhelming, thanks to plenty of competition, Martino knew their offering was so different to other brands that they created their own market. “It’s so eye-catching, it’s functional, it’s got a design-edge to it, and the price is right. So that will always be our strength,” she explains. “As a team initially, it was about making a difference and making it happen our way, rather than looking at what other people were doing and trying to copy somebody else.

“People said to us in the early days, ‘Oh stationery, Office Works are doing that so well’. But we had to explain that Office Works is at one end of the scale and we’re at the other. We’re offering a different product, we’re offering an image, we’re offering an identity, and that’s exactly what we did. We infiltrated the schools very quickly, it became a fashion item; like young girls wear different earrings, they were then buying from us a lovely notebook and a matching calculator, the matching pen, some pencils, a pencil case, so when they were going to school they were saying ‘look at me’. And I guess, in essence, that’s been Smiggle from day one—we do bright colours, we change the designs, we have key products we keep as our base product, but more and more the design is growing, it’s developing.

“We’re not about to reproduce anybody else’s success story, we’re making our own. And I think people have picked up on that” she adds. “Now we’re finding people are looking at us and hoping they can replicate the success but it’s very difficult because it’s something we’ve been able to do in-house and bring all our talents together.”

Martino believes this is one of the company’s biggest strengths: Smiggle does everything in-house and draws on the multi-skilled team it has on board. “For every aspect of our business, we have the expertise within our own management team so we don’t involve any outside assistance in any way, and, from my point of view, that’s been the success of Smiggle.” The in-house team take care of design and development of products, HR, merchandising, marketing and wholesaling. “It’s quite unique and people are quite baffled as to how we cover all the areas.”

It is baffling, considering that although the retail stores have about 60 staff, the head office only has a small team of 10. “I guess we’re all multi-skilled,” Martino explains. “I’ve been in retail for 30 years, we’ve had Peter’s expertise that we’ve been able to draw on, and Stephen’s merchandising talents and design flair are exceptional.” To also help drive the brand further, Peter’s daughter, Jane Pausewang, also joined the business in 2003 as a director and brand manager, with an active role in marketing and advertising.

“The advantage is if we’ve done a window promotion and it doesn’t have quite the strength we anticipated, we can turn a new promotion around in 24 hours, which is something a lot of retailers could never do, and that’s simply because we’ve been able to do it within our own four walls. It’s a huge commitment but as a team we’re very passionate about the product and what we do.”

Martino says the Smiggle design and product range are constantly being influenced by its customers. “They’re telling us in some cases what we should be doing and we listen to them. We never force a product on our customer; we’re very much in tune with what our customer is looking for, what price point they wish to pay. They want quality so we offer them that. So our package is simple, yet very successful.”

Smiggle stays in-tune with its customers by having a retail strategy that involves educating customers about the business and asking them questions to encourage feedback. “We found that helped us tremendously to sculpture our range and which way we were going to move so that we didn’t leave our true target market behind.”

Smiggle’s original target was the 14 to 25 years age group, but Martino says that’s expanded over the years and they now identify their core customers as those aged from 10 to 40 years. “And we’ve designed accordingly,” she says. “We’ve made sure that we haven’t lost our original market, which are the young teenage girls, but we’ve given our customer the opportunity to purchase a product that’s good quality, well priced and gives them an identity.

“I guess in the early days we thought if we could get each student’s pocket money we’d be in front, but we’ve done far more than that. Our average sale is now $25 to $28. So that’s an amazing feat given we don’t have expensive products within our stores.”

One of Smiggle’s most popular items is its saver packs, which are bundles of products set at different price-points. “We’ve hand-picked each product that goes into the kits, marketed it and we’ve found that’s become a huge part of our daily sales,” says Martino. “Over Christmas we amazed ourselves last year, we sold thousands and thousands of just kits. We found a lot of mums and aunties and grandmothers had come in because firstly, the child had requested Smiggle, and secondly, we made the shopping experience hassle-free for them, and our stores are good fun.

“There’s a lot of character when you walk in, there’s a good feel to them, they’re bright, they’re happy, the staff are helpful. We always have new things on offer, so it’s very difficult to walk past a Smiggle store and not want to go in, even for a peek or a bit of a sniff, because most of our products even have a smell to them.”

Given the nature of the business, Smiggle not only enjoys the Christmas rush, it rides the sales peak until March, thanks to a big back-to-school promotion in January followed by a big back-to-uni promo in February. “So we capitalise on that otherwise quiet February that most retailers experience.”

Smiggle has also started its expansion plan into other states. “The more stores we get, of course, the branding will be easier from a national point of view,” explains Martino. “We’re dealing all day, every day with getting the right sites in the right centres so we can grow Smiggle in different states now.”

Smiggle stores have opened in Sydney’s Bondi and Miranda as well as Brisbane’s Chermside. Their goal is to have 20 stores by the end of the year that will all remain company-owned. “That’s the way we like it, we have control and we’re perfecting all the time,” says Martino. “Jade and I often sit back and think how can we do this and that better, and I believe we’ll be doing that every day while Smiggle is becoming successful.”

In terms of Smiggle’s wholesale business, it was hard to walk past their much larger and brighter stand at the recent August GHA trade fair in Melbourne, without some level of interest. I was amazed at the transformation in just three years since their first fair. The colour palette had grown and the product ranges had extended into nearly every type of stationery imaginable. “We had an enormous reaction to our wholesale trade fair in August here in Melbourne,” reports Martino. “We took a huge stand with our new image and we just did amazing business and keep getting surprised every time. So it’s an indication and reinforcement that we’re on the right track.

“Our wholesale business is growing, we now have representation in Myer, who has allowed us—as the only supplier outside of concept stores—our own Smiggle stand. We have huge accounts wholesale-wise, so it’s an indication to us there’s another whole area, yet to be tapped.”

In terms of what makes a successful business, Martino says Smiggle has experienced its fair share of set-backs in the start-up phase, but pulling together as a team and having a strong belief in the concept and the product meant they have always pulled through. “We always knew there was a lot of work to be done, so it’s a decision one makes,” explains Martino. “If I’m going to start a new business, I need to have a lot of belief and energy and passion. And there are so many areas one needs to cover, so from our point of view, we did communicate all the time and shared each others strengths and weaknesses. There were no egos. We knew it would be hard work—we had to watch every dollar that was being spent, we knew that branding was important so we put a lot of time and effort into that—but I guess we were just prepared to put in the hard work.

“It certainly wasn’t a nine to five job. In fact for the first couple of years, I’d have to say Stephen and myself, and when Jane came on board, we probably did seven-day weeks for a long time. We would spend our weekends on the floor in the stores to make sure we understood the product and the customer: that’s commitment. Unless you do that you haven’t got any grounding or foundation to structure your business on.

“And you just need to re-look, reinvent, make sure you’re doing things correctly, or ask if you can do things better. We’re not a group of complacent people and I think that’s been a big part of our success as well.”