How the Crazy Store manages to buck the retail trend
By Adele Shevel - Jun 27th, 08:59
Walk into virtually any shopping mall in SA, and it seems you'll find a Crazy Store. From humble beginnings, the discount retailer has become a 374-chain - and counting.
Try going into a store that sells a broad range of goods that have little in common other than that they’re relatively inexpensive and pretty colourful, and it’s unlikely you’ll leave empty-handed.
That seems to be part of the success behind discount retailer The Crazy Store.
The business, which grew out of family-owned Southern African wholesaler Heneck Sacks, opened its first store in Edenvale, east of Johannesburg, in 1995. Known then as the R10 Store, it was a bit like the Poundland and Dollar stores.
Today it has burgeoned into a nationwide chain of 374 stores and counting, with 14 shops in Namibia and three in Botswana, and an offering of more than 4,000 product lines.
The plan is to reach the 500-store mark in the next few years — but that aim is tempered by pragmatism.
"It’s a target but doesn’t have to be a goal. We won’t expand for the sake of reaching a number," says MD Kevin Lennett. And while the company is looking at more sites in these countries, it isn’t planning further expansion in Africa at this stage.
It’s also planning to open more stores in super-regional malls, something that wouldn’t have been on the company’s radar a few years ago.
Initially, landlords of the big malls weren’t that keen to sign The Crazy Store as a tenant. The centres seemed nervous about the value proposition, preferring more high-end stores that carried well-known brands. But tough times, fewer tenants and customers asking for The Crazy Store are changing that.
The company has also evolved to become a brand in its own right. "Our retail look and feel, and professionalism have now proved to be consistent and worthy of a place in the super-regional malls," says Lennett.
Over the past three to four years the company has also made an effort to become a more "credible and trustworthy retailer, and customers have recognised that and trust in our brand", he says.
It’s been about improving standards, being consistent, and becoming more familiar to consumers.
One of the drivers is to draw in customers who would not normally shop at the store.
"When I joined, people used to say: ‘Aren’t you the store that brings in cheap Chinese stuff?’ We needed to move away from that image. We introduced a quality control department where every product is tested."
More than 70% of its products come from overseas, mainly from China, Turkey, and Indonesia.
How does it choose the inventory? "If you know your customers and you’re close enough to your stores, you can predict what they’re looking for. Don’t be afraid to try goods," says Lennett.
"For some retailers these days, the business has possibly [become] too complicated. Just try it, understand that you may need to mark it down; bring in new things. The customer is always looking for newness."
What The Crazy Store is buying now is based on history — but it’s also always on the lookout for opportunities to add new products. "Over the past few years we’ve been making sure we buy product in more depth and take more risk where appropriate," says Lennett.
Take pet beds, for instance. Management decided to put them into the stores, and they sold out within weeks.
What had been a small department then became a big one: pets.
On the novelty side, children have always bought novelty items — like bouncing eggs. At one point, The Crazy Store was selling 10,000 of these a month.
Relentlessly tough economic times seem to have helped, rather than hurt, The Crazy Store’s growth. Part of the success, says Lennett, is that customers come across products they didn’t expect to find.
It’s also about accessibility — and the fact that you can pop in for everyday items such as black bags or sandwich bags.
"In the good old days, we used to drive 20 minutes to a store. Now we’re so busy we want to get in and out as soon as possible. A lot of our customers come to us rather than a bigger store to save time," he says.
"The aim was to make our business a smart place to shop. What we’ve found over the past four to five years is how many people in the upper LSM range are shopping at [our stores]."
He says it’s not dissimilar to what Checkers achieved: most of its customers used to be in the LSM 6-8 range, but now it’s very much LSM 6-10. The Crazy Store similarly now seeks out established neighbourhoods in the broader LSM bracket.
"Why be stuck in this band or that?" he asks. "We have a store in Claremont [Cape Town], and when you go into the store you’ll see private-school uniforms floating all over the store, which in the past wasn’t necessarily the case."
And the competition? They’re in fast-moving consumer goods as well as various plastic stores, toy stores, and stores selling Chinese goods.
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