Acknowledging 20 years of being in the retail space, what’s in store and where the market is heading.
Hailing from the UK, Vita Group CEO, Maxine Horne, left school when she was just 16. Along with her husband, David McMahon, they operated their first Fone Zone store in Queensland in 1995. Fast forward 20 years, that single operation has transformed into 149 outlets under the ASX-listed Vita Group umbrella made up of 100 Telstra-branded retail stores, 16 Telstra Business Centres, five Fone Zone and 16 One Zero outlets, and 12 Next Byte stores. It also operates a mobile accessories division called Sprout and began expanding into the SMB and enterprise services market.
In 2015, Horne became the highest ranked female executive at number 33, in BRWmagazine’s Top 100 Executive Rich List. She spoke with ARN‘s Julia Talevski about her career moves, the transformation of Vita Group and how retailers are moving beyond being a transactional business to providing knowledge and experiences.
How did you kick start your career?
I’m from the UK, left school when I was 16/17 and my first job was in a bank. In those days they brought this new concept in called a management trainee program where you spent three years at the bank and three months at-a-time in every single role and at the end they allocated a branch to you. It’s fair to say that my personality really wasn’t suited to banking and six months later, I told my father that I resigned. He went ballistic. In those days if you had a job in a bank, you had a job for life.
I did a bit of traveling around Europe for about three years and then went back to the UK and started a career with Mercury Communications, who are the equivalent to Optus in Australia. I started my career in telesales. Looking back, I’ve always worked in start-ups, and I was employee number 007 at Mercury. I started off as a sales rep, then moved to areas, regionals and national. I did a brief stint at Vodafone in the UK and then came out to Australia, where I started working with Optus. In Queensland, there were only eight employees at the time.
I think one of the things I really enjoyed and when I was starting out in a company, was the feeling you get in a startup – where everyone is fuelled with enthusiasm and commitment. As a company grows and becomes more corporate, you lose that entrepreneurialism spirit.
One of the drivers for me in starting a business was to prove that you could maintain that culture irrespective of how long the business had been operating for. People don’t leave a company, they leave their manager. So we focus a lot on our leaders, how they lead and coach their team and that’s important to keeping people in the organisation. In Australia, I had a few poor managers and it was like all the stars aligned and the opportunity presented itself, so I thought it was now or never. I’ve mostly been involved in sales and telecommunications.
Did you ever think that the company would grow into what it is now?
When you start up your own business, you think you can do it better than anyone else and create a better lifestyle. The reason we chose the store in the Gold Coast is that we had ‘illusions’ or ‘delusions’ of shutting up the shop for a couple of hours and going surfing. We had no intentions of growing to the business that it is today, but it’s fair to say, and with any success, there’s a whole heap of hard work, tenacity and you do need a bit of luck on your side as well.
I think the fortuitous thing for me was that I picked an industry that was growing prolifically and enabled me to make mistakes without crippling the business. Hindsight’s a wonderful thing and when you look back you think if you did some of those things now, in today’s environment, the business wouldn’t survive.
It was fortunate that I got to make a lot of mistakes and learn fairly quickly in an environment that was allowing that to happen.
What are some of those key lessons that you’ve learnt along the way?
Way too many to count, but one thing’s for sure, is that I will keep learning. The big one for me is that companies are built around a culture and the people within that culture.
Particularly if you start a small business, you think your the driving nature of that business, that it can’t cope without you, and to a certain extent in the early days, that’s true because you are the driver, motivator and you feed the vision. Overtime, there comes a point where it doesn’t matter how good you are, you have to surround yourself with people that have skills that you don’t. Secondly, is to trust them to do their job because if you’re going to do the job for them, then you might as well not have them onboard.
The other thing is execution. You can have the best strategy in the world, but unless you execute it, it’s worthless. 10 per cent is the idea and 90 per cent is actually executing the idea and I see so many businesses spending time to come up with the perfect strategy, but by the time they come around to executing it, they’ve got no energy left for it, or they’ve already missed the boat.
We hire on will, not skill. Our job as an employer is that we give people the skills to do their job, but there’s nothing that I can do about someone’s will. If someone doesn’t have a focus on customer service or an innate belief in their own ability, they don’t have the desire to want to learn or improve themselves, it doesn’t matter what I do on the skills perspective, they’re not going to be successful.
People ask me why I still work, it’s because I get a kick out of watching people’s careers evolve. I sit back and think that I’ve had some little bit to do with that, and that’s what makes me get up everyday.
What have been some of the most significant milestones for the company?
Starting the business was one of them. What we’ve done very well in the business, is focus on customer service. In an industry that was growing prolifically, and all anyone ever wanted was market share – selling on volume, product and price, we were very adamant about having a customer service program.
Our program was called CARE (Customers Are Really Everything). That is still in the business today, but it has evolved over the years and it’s now this umbrella brand across the business that focuses on coaching, leadership, personalised service and community engagement.
2003 was a good year for us, we won a lot of awards in the eye of our competitors, and 2005 is when we publically listed the company after 10 years in the business. 2009 was significant and strategic for us, it was when we moved out of the Fone Zone brand and into a master license agreement with Telstra, running their stores.
2014 was when we opened our 100th store, and 2015 – we turned 20.
What have been some of the most significant changes, evolving from a start-up to where it is today?
Our sheer size. When we first started, there was myself and my husband working in the store. I’d come home and do the accounts, payroll, order products, pay all the suppliers – there would’ve been about four of us and now we’ve got more than 1500 employees.
We’ve got 160-odd points of presence nationally. I think the other big change is that we moved from a retailer that just sold mobile phones, to having three distinctive channels. We have a retail division, small business; and a corporate and enterprise division. Each of those has their own managerial structure, and is a profitable entity is in its own right.
I also spend a lot of time looking at what’s going on in the Asian and European markets, and looking at trends, not just within telecommunications but across retail and B2B sales activities and then seeing some good ideas, and if they’ll work in our business.
Our move into a master license agreement with Telstra was a classic example of positioning ourselves ahead of the market.
At the time in 2008, the market was consolidating, it was highly fragmented and we knew that the non-carrier branded stores were going to suffer, so we moved into the carrier-branded environment.
The retail sector itself has faced many challenging situations throughout the years, how have you met those challenges and adjusted?
Yes it’s tough in retail and online sales, etc. We have our own accessories business called Sprout, which has a turnover of $26 million and it was only formed less than three years ago. It was formed as a realisation that margins with mobile phones and the glory days of earning a 30 per cent margin were going. We needed to replace that revenue, and now there’s low single digit margins in handsets, but because we have the complete chain of accessories, we’ve replaced that loss of margin.
What are some of your plans for the business in the next 12 months?
Retail is in optimisation mode. Our plan is to have a national clustered network, so that within a region there are five to seven stores, and an area manager in that region, which enables us to transfer our people around and give them career progression. It also gives stability in the region.
We have an extensive leader program, which is paying big dividends for us. Not just from a productivity point of view, but also talent retention too.
The small business channel is in transformation. We spent the last 12 – 18 months preparing for its launch and we’re now starting to increase that business substantially.
This time a year ago, we would’ve had about five business centres, we now have 16. These are centres that are specifically for SMB customers – that have up to 100 employees.
It’s a highly fragmented marketplace, no one has really cracked it yet, and out of all our clients, these are the people that need a great level of service the most. It’s important that they have a local, trusted advisor that they can depend upon. That’s really the next growth engine for us, our small business team is a national geographic play – paralleling our retail footprint. We’ve also got an enterprise and corporate division and we’re building the foundations there.
Where do you think the retail industry is heading?
It’s moving away from being very transactional to being experiential. Retailers are in the business of selling information now. The retailers that are providing an ‘experience’ in store are doing really well. The stores that are just stacking products high, hoping they’ll fly out the door, aren’t doing so well. Shopping is not just about buying things, if it was, then everyone would just be buying online.
Shopping has become about entertainment and information. Our job as a retailer is to provide a great experience, show customers and get them to touch and feel products, and inform them too. Big data is going to have a huge role to play, not just in retail, but all types of businesses. One of the challenges we have is where do we focus first?
Content Source: arnnet.com.au