Despite strong competition, Wild Cards & Gifts is one of the fastest growing retail businesses in the sector thanks to a successful product mix and business model, writes Rebecca Spicer.
With over 20 years experience in the retail industry—operating and opening new stores as well as managing a network of stores in various industries—Lawrence Boyle and his wife Sandra were well placed to start their own card and gift franchise.
Sandra officially started the business in 2002, with Boyle joining her in 2005 after being restricted from rejoining the industry having sold out of a competing franchise three years earlier. Now, they’re a dynamic duo. "I’m arguments and documents and she’s flare and creativity," says Boyle. "Sandy loves setting direction and design and colour and if it wasn’t for her re-blending of the product mix, we would be just another random group trying to get by, but it’s also the structural things that have made it work financially as well."
With around 2,000 card and gift shops operating in Australia at any one time, the Boyles had set themselves a big challenge, especially going into the industry the same year many stores were suffering, and some closing, because of the end of what Boyle calls the "licensing product binge".
But with the shift in trends, Sandra saw an opportunity. While on holiday in January 2002, a four-page business plan was put together which they hoped had the potential to give new life in an industry under pressure. "Sandra said she’d only do it if there was a change in product," explains Boyle. "The intent with Wild was to create a unique blend of female and male gifts, leaning on the female side, with greeting cards also making up about 30 percent of our turnover. So it was that re-mixing it that made it work."
The Wild plan was always to franchise, and this started from day one with existing card and gift store owners (who were also friends of the Boyles) in NSW and then Victoria being the first to join the Wild Retail Group. "Our asset base at the time was our relationships with suppliers and store owners, and having been in the industry at that time for 12 years, the belief was there had to be a better way," says Boyle. "Having been in a [franchise] system that was good, and having seen what it could achieve, Sandra wanted to create a similar platform to achieve those same ideals, but in a way which made profit for all participants. Hence why we offer added value at a third of the cost. We only charge our franchisees three percent for a service fee, whereas other groups at the time were charging between eight and 9.5 percent for a service fee, which takes a lot of profit out of the store.
"It works for us, stores were thrilled and suppliers were thrilled because their discount wasn’t going straight through to the franchisor, it was staying with the store-owner. Hence there’s been the growth there has because people like to be treated fairly."
The result is that after just four years, Wild was recognised in BRW magazine’s 2006 Fast 100 list, and now has 25 stores trading around Australia and seven new ones lined up for 2007.
With their base in Perth, this has been no easy feat for the Boyles, and it’s no surprise the couple have also made aeroplanes their second home since the business began. However, employing a support person on the east coast in 2005, and now their own daughter to help out in head office, has helped ease the pressure. "But we still do every new store opening ourselves," says Boyle. "We love to shut the office for four days and go wherever in Australia we have to, so we form a bond with each new franchisee."
The goal is to have 45 stores—no more, or less. "From a fairness and value-adding proposition, we’ve set a limit," he says. "We’ve been in groups bigger than this so we’re making sure we stay within our level of competency and the connectivity with store owners stays strong."
To further help manage growth, the Boyles will pick up stumps and move head office to Melbourne in February, not long after Wild’s fifth birthday. "When you’re home is Qantas it’s a bit weird," jokes Boyle. "What we felt was the ability to do our job properly and do the most we could for our franchisees was being inhibited by being in Perth. Melbourne is the merchandise capital of Australia, Sydney is the leasing capital of Australia and no-one really comes to Perth. It’s purely for an efficiency move to be in closer contact with the trade, far greater contact with leasing people and also the business community."
While there are no company-owned stores, Boyle says they’ve had enough retail and franchisee experience to know the challenges of store-owners, and it gives them time to work on the group as a whole. "We’ve had probably 17 retail businesses of our own, so we felt we’d done the end-of-month accounts, we’d done all the experiences that franchisees would go through," he explains. "Having had 20 years behind the counter and having had every possible customer experience one could imagine, including head butts and being spat on, we figured there was no new experience we could have, but we’d have the experience and connectivity to do this."
But to keep in tune with consumer trends the Wild Retail Group created a Group Strategy Team (GST), made up of Wild’s six most experienced retailers, who are still at the coal-face every day. Boyle admits the abbreviation frightened people at first but the theory being is that it adds 10 percent to their business. "They give us regular feedback and what also happens at gift fairs—the big ones being February in Sydney, Brisbane in July, and Melbourne in August—is we meet with them and we do the gift fairs together and that helps us reset our product mix and our suppliers. We mainly deal through 40-45 suppliers which is what you need for good coverage and then we make sure we set the tone in that regard. We then put together our Christmas catalogue from that. And that helps set the tone as to where we are in the marketplace.
"We don’t do direct importing purely because we believe the trade is very efficient at that, but we often work with certain suppliers to bring in product. We get a lot of heads-up on product ranges suppliers are thinking of bringing in and we give opinions six months prior.
"Keeping in mind what sells in Wyalla is different to what sells at Rhodes, there is a bit of flexibility within our product range. We don’t try and be a KFC where everybody has to sell the same stuff. We adopt the flexibility within a strict set regime and that works very well.
"Our suppliers have around 100,000 stock lines in their product ranges combined and typically stores would pick the 3,000 to 4,000 best lines from that, and that’s plenty to wow customers, so the system works very efficiently."
A new point of sale system has also helped boost Wild’s efficiency, as well as keep the franchisors abreast of product trends. Operational since early 2006, the new system allows the group to determine best-sellers across stores each morning, resulting in lower stock-holdings for store owners and greater sell-through of product. "We hopefully see a time in say 10 years when there will be a lot less people employed in our industry but that everyone is more efficient and profitable, and the only way we see that happening is through technology," explains Boyle. "The ability to know, this morning, the best selling products in the group puts us on the same level as the majors and allows us to analyse trends for the first time as quickly as they do, and react accordingly. We’ve already started to change product mix after only six months based on what we thought we were selling versus what we genuinely are selling. All sorts of stuff changes on a daily basis as to what consumers want and it’s just nice to be able to see that. We c
an see now the wedding season rise and fall in August and September, we can see the licensing get a kick in the third week of November and we’ll be able to see more as time goes on as well."
All Wild stores should be using the new system within 12 months, which, according to Boyle, will allow them to analyse more than $20 million of retail sales annually.
All Wild Card & Gift franchisees are associate members of GHA, allowing them to take advantage of key trade fairs each year as well as the many business benefits available to members. The main reason for membership, Boyle says, is credit card rates. "When GHA introduced the merchant service fees discount and, at the time, no-charge eftpos, no other banking institution offered our stores that and that alone was worth $600 a year. So the reduced fees on credit cards to 0.7 percent plus GST—most stores were paying 1.5 percent—meant GHA was able to deliver a killer benefit that all of a sudden was six times the membership cost in value, so it’s a no-brainer to do it."
And at the time of GHA trade fairs such as Melbourne in August and Sydney in February, the Boyles take the chance to hold special functions involving both franchisees and suppliers. "It’s not just franchisees that make Wild successful, it’s our suppliers as well," Boyle says. "We need both because without suppliers, our guys have nothing to purchase so we make sure we treat them nicely and at that function in August they all go home with a present. We like to show respect, hence why we’ve never demanded a trading term and we’ve never demanded anything.
"We believe that the moment any owner of any business doesn’t respect the person paying the bills, they’re doomed," and according to Boyle, that’s the secret to success.
The fact both husband and wife together make such a winning team also helps and, again, Boyle says it comes down to a deep respect for what each other brings to the business. "She’s the boss at the end of the day. She started it, so there’s a lot of mutual respect. We don’t get in each other’s way and it works a dream.
"We just love the business, we reckon it’s one of the most fun businesses on the planet. Isn’t it good we’re not selling ball bearings or servicing cars. It’s the ultimate social thing of giving a gift and there’s nothing nicer than that so we’re going to be here for a while."
The Wild Secrets to Success
1. Show respect. Respect customers, suppliers, colleagues and staff. "We believe that the moment any owner of any business doesn’t respect the person paying the bills, they’re doomed."
2. Keep learning. "So many people think the day they leave school, they stop learning and it’s wrong. We’ll get through 12 to 20 books about business every year and through that, by continually learning how the world is working helps you introduce new programs within the company and it takes everyone to a new level of profitability."
3. Efficiency. "Don’t waste your own money and don’t waste other people’s money."