Cotton On Group has invested over R300 million in its new Johannesburg-based campus – the group’s Southern Africa headquarters and distribution warehouse – in a move that will accelerate the global clothing retailer’s omni-channel strategy.
Founded in 1991 in Australia, Cotton On opened its first South African shop 11 years ago, with a vision to take its Aussie lifestyle to the rest of the world. Its online shopping website has operated locally for four years.
The clothing group has eight brands and 1 400 stores operating in 22 countries, with 18 000 team members. In SA, Cotton On operates 167 retail outlets nationally, including its sub-brands: Cotton On Body, Cotton On Kids, Factorie and Typo.
Featuring what it claims is one of the fastest supply chains in the world, the new 22 000sqm Midrand-based warehouse and distribution centre is geared to process 6 000 e-commerce orders per day, 200 000 units to its retail network daily and over 20 million units in total per year.
The group has expanded its facility from the old Pomona, Kempton Park-based facility, which was 5 000sqm. During peak times, the new warehouse will allow for fulfilment of up to 12 000 online orders per day, up from only 70 daily orders when the e-commerce business was first introduced in SA.
Speaking to ITWeb during a tour around the campus, Natalie Wills, country manager for the Cotton On Group, said the retailer is on a major social commerce push.
“Our online store is like a ‘super store’ and it can get really busy, so we are looking at opportunities for further growth. To grow our e-commerce business in South Africa, the most important thing is for us to connect our website to social media, which will play an important part in how we engage our customers on various social media platforms.
“We will be running competitions on Instagram and TikTok, and we are hoping to secure partnerships with more businesses who are like-minded and who share the same values as us, as part of our social commerce strategy to connect with a broader base of customers and engage with customers who are keen to shop on our site,” explained Wills.
Running rewards programmes online also forms part of the retailer’s plans to persuade more customers to shop online, or make their way into the stores, she noted.
The Australian-multinational retail giant is also on a drive to accelerate its brick-and-mortar business in SA, in a move that will see it scale its 167 local stores to 300 stores over the next few years.
Locally, the group competes with a string of hybrid retailers, including the Woolworths clothing business, TFG, Edgars and H&M.
Instead of competing with the likes of fashion online retailers such as Takealot Group subsidiary Superbalist and Zando, Cotton On says it has partnership deals with them, which entail supplying them with some of its stock and keeping select items in Cotton On’s warehouse.
In terms of its omni-channel push, Wills points out many customers often browse online before going into the store and the company has made a way for customers to place orders online and collect later from a Cotton On store near them.
“The COVID-19 pandemic saw the website grow substantially, and luckily, we had already established our online shopping channel by then, and as we prepare for more growth, we are looking for more ways to explore omni-channel opportunities.
“The new bespoke site has been designed to deliver the best possible experience for our customers and provide our team with a great place to work. The warehouse is built for growth and scale, with an additional 50% of space that will cater for future e-commerce processing.”
Construction of the campus started in January 2021 and was completed in June 2022.
The distribution centre features very narrow aisle storage and a pick mezzanine for unitised picking. The orders have been streamlined to ensure a seamless process takes place between the centre’s receiving depot, storage of items on shelves, boxing and packaging, and classifying orders according to their delivery destination.
Conveyor belts are used to track the items and ensure the correct classification of products, before the collection trucks arrive.
The new site was designed to operate with minimal impact to the environment, combining grey water harvesting, a 200kWp solar power plant, LED lighting, proximity sensors to reduce energy usage and an indigenous landscape, The company is transitioning all plastic polybags to be made with recycled plastic.
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