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This retailer is betting on offline growth despite digital dominance


Oz Hair and Beauty, a top Australian hair and beauty store known for its website, is opening 10 new shops across the country. This big investment shows a change in how people shop, with more folks spending money in both online and in-person stores. The first new store will open this month at the Macquarie Centre in Sydney’s Macquarie Park.

This strategic move by Oz Hair and Beauty aligns seamlessly with recent analyses indicating the superior performance of retailers adopting an integrated ‘Bricks and Clicks’ model over marketplaces and pure e-commerce ventures. Notably, these hybrid retailers witnessed a substantial 7% surge in online sales compared to figures from 2019. In the thriving Australian market for beauty and personal care products, Bricks and Clicks retailers are poised for success, with projections anticipating market growth to reach $8.09 billion by 2028, boasting a compound annual growth rate (CAGR) of 4.19% from 2023 to 2038.

Founded in 2012 by Anthony Nappa, Oz Hair and Beauty has deep roots in the industry, stemming from Nappa’s family background in operating hairdressing salons across Sydney. The brand’s flagship OZ Hair salon in Sydney’s iconic Queen Victoria Building (QVB) has been a fixture since 1986. By 2019, Oz Hair and Beauty had achieved a monthly turnover of $2 million, a figure that doubled to $40 million by 2021. In a pivotal move in the same year, a consortium of investors, including Edison Growth Fund, Accent Group, led by CEO Daniel Agostinelli, and billionaire businessman Brett Blundy, acquired a stake in the business for an undisclosed sum.

Presently, Oz Hair and Beauty boasts six physical stores and salons across Sydney, spanning locations in Penrith, Castle Hill, the QVB, Erina Fair, and Charlestown. The company employs over 120 individuals across its retail outlets and warehouse in Sydney’s Caringbah.

The expansion plans of Oz Hair and Beauty are ambitious, aiming to increase its store count to 15 by year-end, consequently elevating its workforce to 165 employees. The latest store opening, slated for this month at Macquarie Centre in Sydney’s Macquarie Park, is just the beginning. Additional stores are earmarked for Sydney’s Rouse Hill, Canberra Central, Green Hill in Maitland, NSW, as well as prime locations in Brisbane and the Gold Coast.

Anthony Nappa underscores the evolving preferences of the brand’s loyal customer base, who increasingly seek both online convenience and in-store experiences. A 2023 report by KPMG reinforces this sentiment, revealing that successful retailers excel in offering a seamless blend of online and offline channels, thereby enhancing the overall customer journey. This customer-centric approach mirrors the dynamic nature of contemporary retail experiences, where online browsing often converges with in-store transactions. He says: “The cost of running an online business has skyrocketed by more than 20 per cent in the past couple of years, with postage costs having soared by more 15 per cent alone.” 

While the rising costs of running an online store has shifted the company’s focus to physical stores, Anthony says the shift is about more than just the bottom dollar: it is helping Oz Hair and Beauty give customers the personalised experience they crave. 

“In the hair sector, particularly, our customers consistently seek advice, tips and support from specialist sales staff who help them find the best products, as they are qualified hair and beauty specialists. So, we’re taking that feedback and not just expanding across Sydney, but in other cities where we have a large and loyal customer base. With hair products making up most of our sales, we strive to ramp up the personalised and expert-led experience our customers love.” 

Anthony, excited a to tackle the venture, says: “Following COVID we continued to operate at a higher baseline and, we while we have continued to grow online, our data indicates the e-commerce sector has softened as that rate of growth was unsustainable. Our analysts now predict a slower and more stable trajectory that a rising physical store presence will complement.”

Accent Group CEO Daniel Agostinelli says: “Over the years Oz Hair and Beauty has successfully grown and pivoted in tune with changing retail trends and that has helped it emerge as one of Australia’s leading hair and beauty retailers. Its physical move into customer strongholds across the country showcases a savvy and customer-centric approach. I believe the next two years will be exciting as it takes its omnichannel retail model to the next level.” 

Soft retail market in early 2024

Roy Morgan research indicates that over 2 million Australians are engaging in monthly online shopping with retailers renowned for offering homewares, electronics, and apparel at significantly discounted rates. However, despite nominal retail spending only experiencing a marginal 1.1% growth since January 2023, the Australian population has expanded by an estimated 2.3% over the same period, with inflation reaching 4.1%. This disparity underscores a notable decline in per-capita real retail spending, reminiscent of last year’s ‘retail recession’.

Looking ahead to 2024, the forecast appears more promising compared to the lackluster performance of the retail sector in 2023. Deloitte Access Economics is set to release their Retail Forecasts next week, suggesting that 2024 may unfold in two phases – a subdued first half followed by a resurgence after mid-year.

The mid-year period is anticipated to witness a boost due to tax cuts, alongside other supportive measures for the retail sector throughout 2024. Despite the continued subdued nature of the retail landscape in early 2024, it’s essential to maintain a forward-looking approach. Focusing solely on cost-cutting strategies to weather the subdued market could potentially hinder the opportunity for sales expansion as broader economic conditions improve over the course of 2024.

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