#21interviews: Plan for growth in 2021
Herman Botha, group general manager of the 28-year-old PNA retail group, says plan for growth not just survival.
Herman Botha, group general manager of the 28-year-old PNA retail group, says plan for growth not just survival during these challenging times. PNA opened three new stores during Covid lockdown and announced that it planned to open another eight new stores by the end of 2020 in major urban malls, bringing the store count to 95 nationally. PNA operates in a specialist sector that comprises stationery, art and craft materials, educational books, toys and other related products. As a franchisor, its business model varies from the traditional franchise models to enable store owners to tailor their product offering to meet the needs of their immediate communities. The pandemic allowed stores to move quickly to meet shifting consumer needs, dispensing with historical business models and data that were no longer useful.
1. How has your brand survived and thrived in the shadow of the pandemic this year?
The most important thing was, we didn’t panic. We were fortunate to be able to trade after a month of hard lockdown. Obviously, it was still challenging, as the feet through the shopping centres wasn’t what it was. We continued to communicate with our customers. We kept the brand going through those difficult times and those hard trading times. We knew focus would change from office-based to home-office and we had to put more focus on certain ranges, especially home office products. And because people were staying home, they took up hobbies and the hobby sector increased as a result, and we focussed on arts and crafts a bit more. We also saw an increase in our toys section in games and puzzles; and there was a spike in educational books with the move to home schooling. We saw that coming, so we planned for that. PNA’s business model flexibility has allowed for agility and rapid scaling during these disruptive times. We have maintained our customers’ trust as we reset around their needs, including how they want to buy and receive service. And because we are an agile business, and franchises are owner-managed, we were able to be agile. We are also keeping the corporate jargon out of the business and we are keeping a flat structure – that is how you keep the success of a franchise business. Heavily corporate structures will struggle to adapt and change. We believe our success is because we communicate with our franchisees at all times. We have 25 franchisees in the group, so it is fairly easy to communicate with them and convince them to change and adapt. Our business system is set up in such a way as to also allow them to adapt quickly when their immediate market changes.
2. What have you noticed about changed consumer behaviour and how has it impacted your business sector?
It is difficult to plan ahead in these type of times. Our strategy remains to effectively communicate with our customers and get their feedback all the time and adapt to their needs. In terms of agility again, to come back to that, we may see permanent changes with home offices going forward. We see customers buying more at a time, rather than shopping more frequently. People don’t want to go out too often. Consumer spending is under huge pressure at the moment. To plan around that, we have to adapt our product ranges. The important thing for us right now is to focus on home office usage and adapt to that on a more permanent basis; and definitely, the hobbies and craft section. We have to believe – and it is sad for other industries that are under pressure – but we believe customers will spend less on fashion especially, as it is unaffordable. As a retailer, we are priced fairly well in the industry.
3. As a marketing leader, what has challenged you the most and what are the key learnings you can share with your peers?
The key learning for me was that 90% of the things we worry about ain’t going to happen. And we don’t focus on the problems; instead focus on the opportunities out there. Despite all the problems and challenges, there are still many opportunities you can pursue to sustain your business.
4. What is your advice on marketing your brand during a global crisis?
You have to continually communicate with your customers. You have got to stay top of mind, throughout challenging times. When you can trade again, you must be that top of mind retailer and the customer must be able to connect with you through your marketing channels. That is what we had going for us. Our long-term strategic ambition has been to respond to demand. For example, a PNA in a university town may be more focussed on the needs of students, while one based in a business district would have more office supplies. This means each franchise can cater to a profitable sector of their community, while still carrying the goods all consumers would expect from the PNA brand. This model has also allowed us to respond swiftly to the changed behavioural patterns in business and individuals. There has been a resurgence in traditional family game evenings, arts and crafts and reading. On top of that, home offices sprang up around the country. PNA’s culture of encouraging franchise owners to cultivate the agility required to adapt rapidly means they’ve been able to stock up for remote workers’ business needs.
5. What are your business strategies for the future?
Our motto is if you only plan for survival, you will only survive. We continue to plan for growth and we believe if you plan for growth, you will grow; without being ignorant about the challenges that may occur. We are still fortunate that we have been able to show growth in most of our stores. Even under hard lockdown we continued to plan for growth. We certainly see challenging times ahead, but there are also many opportunities for growth. PNA is staying away from corporate buzzwords like ‘new normal‘. You create what you believe in. So, don’t create something that irritates you.
For more insights for retail and brand leaders in the #21interviews series publishing 1-21 December 2020, ahead of 2021:
#21interviews LAUNCH: 2021 comes with a disclaimer by Louise Burgers, Publisher & Editor, RetailingAfrica.com
#21interviews: Brands need to get brave by Bozoma Saint John, Global Chief Marketing Officer, Netflix
#21interviews: The power of being purpose-led will drive brand value by Karin Du Chenne, Chief Growth Officer Africa and the Middle East, Kantar
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