How To Bring An International Brand To South Africa
LEGO has always been available in South Africa, but now three entrepreneurs have secured the local license for this incredible brand.
With a strong retail background, Robert Greenstein recognised that while many stores offer LEGO® to South African shoppers, no real LEGO® experience was available because no-one held a license for an official LEGO® store.
With an understanding that the experience is what seperates online shopping from people who still want to walk into an actual store, Robert and his partners set about securing a license and opening the first official LEGO® stores in South Africa.
Q: How did the opportunity to open a LEGO® Certified Store in South Africa come about? Did you do any research, or did something else inspire you?
In early 2014, I identified that no one was delivering a complete LEGO® experience. I had several years' experience with Pandora, rolling out standalone stores, and was well versed in what is required to deliver a great experience for the customer.
I spent time assessing the LEGO® retailers in the market, from supermarkets to multi-branded retailers to some stores that were only selling the LEGO® product, but they were delivering nothing more to the consumer than over-packed shelves and underwhelming customer service.
I also spent time looking at overseas markets and came across the LEGO® branded stores, which inspired me to try open one in South Africa and so I approached LEGO® directly.
Q: How did you negotiate and secure a local license for such a big international brand?
Looking back, I was a bit early in approaching LEGO®, but through doing that, struck up a great relationship with the country manager at the time. We immediately shared a common view on retail strategy, and the relationship naturally evolved.
When LEGO® was ready for retailers to tender, I was invited to participate. I pulled in more expertise to assist me as I felt that with such a huge brand, it wouldn't be possible to do it on my own.
My partner Greg Bergh has an unbelievable finance brain and my wife Hayley has years of experience in process and product development, and their skills add distinct value to my retail and brand experience.
We put together a very strong business case and presentation that demonstrated that we had a complete understanding of what LEGO®'s needs are and how to implement the retail experience they insisted on.
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We were obviously passionate about the concept, but above that, we were well grounded in the financial investment and operational commitment required to make the concept successful.
Once awarded the license, we were extremely transparent during the contract negotiation and happy to commit to LEGO® where they needed us to. Interestingly, for such a large organisation, they were very open to many of our ideas and there was never deadlock over the legalities in the contract.
Throughout the entire process, I must emphasise the importance of building relationships and trust, as by the time LEGO® signed the contract, we had forged the foundation for a successful and mutually beneficial partnership.
Q: What went into researching and securing the ideal retail space for both the Sandton and Menlyn stores?
Through my retail experience, we already had several relationships with various super regional shopping centres. The LEGO® brand obviously opened doors, but that doesn't mean you just get handed great locations and financially attractive deals. Landlords must protect their investments and no matter the brand, they are all great negotiators.
We were not willing to compromise on location. We knew it wouldn't be difficult to get into the malls but to secure the right location was key. Interestingly, Sandton City almost didn't happen but with Stuttafords closing, it created a lot of movement in the mall.
That said, it was still tough to secure the right space and we had to stick to our guns to ensure the ideal location.
We had a pre-existing relationship with the General Manager in Sandton and I must give him credit for supporting us and making sure the deal went through.
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We waited for more than two years to find a great location in Menlyn Park Shopping Centre and we've been waiting as long for Canal Walk. The lesson here is not to compromise on your standards.
Sandton has traded really well since opening and Menlyn is showing great promise. While we believe our marketing has been successful, you can't underestimate that old retail mantra: "location, location, location".
Q: Who are your partners? How did you go about establishing The Great Yellow Brick Company?
When I had the idea to approach LEGO® for the LEGO® Certified Store concept, I was only thinking about the concept and how successful it could be. I knew there would be a big capital requirement and obviously a massive operational effort to make it work.
When the idea started looking like a reality, I knew I needed assistance on a few fronts. Greg is one of my oldest friends, but besides our friendship, he is an astute businessman with a long history in the finance sector, managing large investments and a variety of funds.
He is also an entrepreneur at heart and we were always keen to find a business to work on together. We needed his finance connections for capital, and his razor sharp negotiating skills to fine tune all our contracts and leases.
Hayley also comes from a corporate background, starting her career at Accenture and working with companies such as Virgin Money and Lightstone.
Besides her experience in implementations and large-scale projects, her understanding of operational excellence and the opportunity to work together, was too much to let pass by.
Hayley runs the day to day operations and a lot of our success is down to her ability to implement anything on time and with precision. We have used all our combined skills to implement a modern IT system architecture that delivers an end to end customer experience between online and instore.
Q: What tactics did you use to entice shoppers to come to your stores? Did you use traditional media to promote the store openings, such as social media, PR, influencers, media events etc?
For the opening in Sandton and effectively our company launch, we used four partners concurrently. We partnered with a traditional PR company as well as a specialist digital PR agency.
We also used our media agency to develop all our collateral and an events company to execute the activations in Sandton leading up to the grand opening and activities on opening day.
While social media is very relevant, we found that radio advertising and partnerships made a huge immediate impact in creating awareness for the new LEGO® Certified Stores. We leveraged the LEGO® brand to create key partnerships with media, radio and influencers.
We also managed trade exchanges and exclusive deals to try keep our costs down as our budget for the launch was extremely tight. Keep in mind that while LEGO® is an established international brand, The Great Yellow Brick Company is still a South African start-up and we needed to be very mindful of our marketing costs for the launch.
Q: What was the inspiration behind the creativity of the store – was it a global brand mandate or was The Great Yellow Brick Company able to contribute to the design and creativity of the store?
The shop designs are created by the European architects appointed by LEGO® and all the fixtures are fully imported. Having the license for the LEGO® Certified Stores means that you must abide by their design criteria and standards. That said, it is a collaborative process.
Through our experience of opening the first store, the architects overseas are more than happy to accommodate our design input. We try and include as many experiential elements as possible.
LEGO® has an innovation team that is constantly coming up with creative and innovative ideas to make the retail experience more engaging for customers.
We already have an AI screen in the stores as well as a digital minifigure scanner in the new Menlyn store. These elements are very costly, but they are unique and draw customers into the stores.
We also try and include a region specific LEGO® mosaic and 3D model in each store which is unique to that city and creates appeal for our customers.