Catch to open first bricks-and-mortar store by year end

Heather McIlvaine

1st Aug 2017

One of Australia’s largest pureplay online retailers, Catch Group, has revealed plans to open its first retail store by the end of this year, with the search for a physical location already underway.

The move comes less than two months after the group rebranded its deals website, Catch of the Day, to Catch, launching an online marketplace under the same name, and just one month after it expanded into the luxury travel market with BonVoyage.

Harpaz said the store will allow customers to touch and feel products and create a level of trust that e-commerce doesn’t provide.

“The things we sell online – like fashion – people like to see before they buy. It’s almost a no-brainer [to open a store],” he said, pointing out that most purchases in Australia still occur offline.

“If you look at the share of online in the overall retail market, it’s still in the single digits of household spend. Whilst we’re big, we’re considering the bigger picture,” he added.

Harpaz said the company is in the process of finding a bricks-and-mortar location that checks all the boxes: 1,500-2,000sqm and in a high traffic area in Melbourne.

The company is looking to leverage proximity to its distribution centre in Truganina in Melbourne’s western suburbs.

While details are still thin on the ground, Harpaz said the store will stock the same products that Catch Group offers online, with separate areas for electronics, toys, beauty, fashion and pantry items.

He said stock will either change over every two weeks, or there will be permanent collections with some space reserved for special deals.

He added that the company often has a few items leftover after its online deals end, which are inefficient to store in the warehouse. In future, these items will likely end up in-store, he said.

Associate professor at QUT Business School Gary Mortimer thinks the idea has merit.

“Certainly we’ve seen retailers use off-price, end-of-season runs quite well, mostly in apparel with Nordstrom Rack in the US and TK Maxx in Australia,” he told Internet Retailing.

“That sort of philosophy of constantly turning over and changing stock…it certainly creates a motivation for customers to come back every week or couple of days to see what’s in.”

The first store of many

According to Harpaz, the store will support click-and-collect at the time of launch, so customers can buy items online and pick them up in-store. In-store shoppers can also choose to have items delivered to their home.

While the delivery proposition will only be relevant for Melbourne-based shoppers to start, Harpaz said the company is already planning to open more stores following a successful trial.

He is emphatic that the store strategy is about serving customers wherever they are, and not just building brand awareness, which was the main reason Catch did pop-ups in the past.

“I expect every store to be profitable,” he said. “Pop-ups are more of a marketing gimmick rather than a retail strategy.”

Meanwhile, Paul Greenberg, founder and executive director of the National Online Retailers Association thinks opening a bricks-and-mortar store is a natural evolution for the online retailer.

“[Catch] has built its brand position online, it’s got a very strong marketplace model. The next natural step, in my view, is a physical store. What that looks like, where and how it will work is the question,” he said.

Nati Harpaz, CEO of Catch Group, is the chairman of Octomedia, Internet Retailing’s parent company.