1. The world of retail in Hong Kong and Macau
Autumn2016
HK$ 59.95
Stores in focus: Wyeth BabyNes •
Atelier Cologne • DJI • Bones + Blades
Have you been scraped?
The new cyberthreat
breaking tradition
Hong Kong’s yawning
digital gap explained
Pop-ups: Here to stay
6ixty8ight:
2. COVER STORY
B
reaking with tradition takes courage
– and more than occasionally a
fresh eye. But the payback can be
spectacular.
Just ask Anders Heikenfeldt, COO of
Hong Kong-headquartered fashion chain
6ixty8ight.
After years working with Swedish fast-
fashion retailer H&M - in the Stockholm
head office, in the UK and in Moscow,
where he helped lead the brand’s Russian
launch - two years ago Heikenfeldt landed
in Hong Kong to head up 6ixty8ight.
In that two years, the chain has grown
from 48 stores to about 110, 20 of them in
Hong Kong, the balance in the mainland.
“6ixty8ight was a very traditional chain
for a long time,”recalls Heikenfeldt.“Two
years ago we were perceived very much as
a local underwear brand, not something
very interesting.
“We perceive ourselves today as an
international fashion brand.”
During the last two years, the company
underwent a complete management
change. It engaged retail executives from
well-known brands across Europe and
started to transform the brand into a
modern 6ixty8ight before commencing
a store rollout program which has been
running at about a store a week for more
than a year.
6ixty8ight was founded 11 years
ago by the Hop Lun Group, a specialist
manufacturer of lingerie for the many of
the world’s largest brands for 25 years. Its
rationale was to use its manufacturing
expertise to create underwear for
Chinese women. Such a strategy doesn’t
cannibalise sales from its manufacturing
customers, because they are primarily
targeting western markets.
“And we are small so there is no conflict,”
adds Heikenfeldt.
Single-mindedfocus
The secret to the retail brand’s rapid rise
during the last two years has been a single-
minded focus on who it is, what it stands
for - and who its customers are. 6ixty8ight
has a very narrow target market: women
aged 15 to 30.
“We have a unique offer. Our value
proposition is different to H&M, Zara,
Forever 21 or Uniqlo - they go broad,
trying to cover menswear, women, kids
- very mass and they have something for
everyone under the one roof.
“Our strategy is to be very different
and to be very true to our target - 15 to
30 year old women. That’s our DNA. We
are not going to divert into men or older
customers.
“Our customers value that. And that
enables us to be very clear in the way we
connect with them and talk to them.
“One of the big international brands
entered China seven or eight years ago
and now they have maybe 300 stores. But
if you look at the profit they make in China,
for them to change their whole production
line to do an Asian assortment is too costly.”
The key to 6ixty8ight’s success is that
it’s presented a fashionable range at
affordable prices in sizes tailored to the
Chinese market. Local lingerie brands
have traditionally offered poor quality,
uninspiring styles and international brands
In the pink
A unique approach to HR has helped fast-growing apparel
retailer 6ixty8ight double its store network while most of its
peers have been retrenching.
By Robert Stockdill
2 www.insideretail.hk — Autumn 2016
4. have had the wrong sizes.
“We’ve been able to build a strong brand
in China. One of the big opportunities we
have is that we are cheaper than many of
the international fashion players which has
given us the opportunity to target young
mainlanders who receive their first pocket
money.”
An example of its price points: 138 RMB
for a set of five panties - In Asia, that’s a
very competitive offer.
“Most people can afford to buy
something from our shops.”
While staying true to its core
demographic, 6ixty8ight has expanded
its offer over the years to include denim,
t-shirts, dresses and outdoors wear. The
current stock mix is about a 50-50 split
between lingerie and casual wear.
Confrontingtradition
But for 6ixty8ight, getting the product mix
right, refining its focus and building new
stores is only part of the story behind the
brand’s recent success.
Heikenfeldt is passionate about the
company’s success in confronting the
traditional Hong Kong and Chinese retail
human resources models - and reinventing
them.
“In the two years since I arrived, I have
found it interesting to see how Asian
retailers treated their staff. Most companies
spent time on products or on marketing or
on controlling costs. Almost nobody paid
attention to who was doing the job in their
stores. Your staff are your ambassadors
for your brand who meet your customers
every day.”
Heikenfeldt says many local retail
employers treat staff as something needing
constant monitoring and control so they
don’t steal stock and are efficient.
“Most staff are executing a checklist of
things they are told to do. I thought this
was a great opportunity to stand aside and
instil a western mentality into our stores.
“We’ve been working for two years on
redeveloping procedures and talking to
field management on how to change the
attitude and mindset of staff to be more
people oriented and manage staff to
empower them to take the right decisions
rather than doing things by the book.
“Some have left because they haven’t
felt there are strong borders or parameters
to work within.”
But others have flourished. An early
Anders Heikenfeldt
COO, 6ixty8ight
4 www.insideretail.hk — Autumn 2016
5. part of the reform process was inviting
staff to speak up during staff meetings, to
encourage dialogue about the operations.
“We always start by asking which
procedures you find get in the way.”
By this time the company had been
operating a decade and“what might
have been a good idea back then when
we started the business might be the
completely wrong way to go about it now”,
says Heikenfeldt.
“Some brave employees I highly respect
took the opportunity to say this or that
might be improved.”
In Asia, and especially in Mainland
China, school students are taught there
are rules and ways to do things and people
are expected to adhere to those.“But a
lot of young Millennials are a lot more
outspoken. They grew up with cellphones,
the internet - not boxed in as the older
generation was.
“We try to talk about these things during
recruitment. For example, who the job is
about and how you should be as a person
to fit in. The success stories are the people
we have promoted. This is something
different to the majority of traditional retail
businesses.”
6ixty8ight also has a much more
rounded job description than most apparel
retailers. The old school way, as he puts
it, is to have just one person who is a
cashier, and one who looks after visual
merchandising. That leads to having store
staff standing around idle when people
need service.
“You’ll have customers waiting for a
cashier, yet four guys there are not serving
customers. They feel bad because they
can see the customers not being looked
after, but they are not allowed to help. The
customer’s perception is is that no-one
is serving them and they can see people
standing around.That affects how the
people perceive your brand.”
Heikenfeldt’s answer is to have all staff
trained in all store roles so they can be
used where they are needed, when they
are needed, balancing the store’s overall
operation.
6ixty8ight staff work five days a week
and usually eight hours a day - but the
days and the hours tend to move around
according to the store’s foot traffic. This
flexible approach means many 6ixty8ight
stores actually have fewer employees on
duty than other retailers - but there is little
We have halved
the turnover of staff...
yet at the same time
reduced the head
counts in stores
significantly.
5Autumn 2016 — www.insideretail.hk
6. down time, which keeps them active and
engaged in their work - and keeps store
overheads down.
“Most retailers work on approved head
counts in each store and a certain number
of hours. It was the same at 6ixty8ight
when I joined.”Now, 6ixty8ight specifies a
number of hours per week, spread across
days and daily shifts.
“That was very difficult in the beginning
because with - say - five fixed head counts,
if you had a lot of customers in your store
you’d have to ask staff to stay longer.
Sometimes you didn’t even pay them
(overtime). That led to staff turnover going
up and no work-life balance for the staff.
By focusing on the same amount of hours,
instead of having five people standing
around at 10am on a Monday morning,
you can have just one or two and when
you know traffic gets there at 5pm, you
can have seven.”
This means 6ixty8ight has jobs for part
timers - students, housewives who want to
work a few hours or a few days a week, as
well as full-time staff.
The company targets new employees
aged 20 to 24 who will resonate with the
brand’s customer demographic and the
current average age is 24.“That’s quite
young for our industry.”
6ixty8ight is also unique in that it does
not pay staff commissions - or bonuses.
“Commissions are a great way to
empower people to sell more and give
better customer service, but it also
becomes very competitive, especially
when staff have low fixed salaries so they
have to work hard to get commissions.
“We don’t have any commission scheme.
We pay a market-competitive fixed salary
and empower the team. So you don’t have
a problem with a staff member saying
‘I don’t want to pick up boxes because
I won’t get any commission’. We have
created exciting team dynamics within the
stores because they don’t have to compete
with each other.”
The end result is a vastly more stable
workforce than previously -“we’re doing
fantastic in terms of how many people
we retain. We have more than halved the
turnover of staff in two years. At the same
time we have reduced the head counts in
stores significantly.”
Yet just two years ago, the company has
a high staff turnover -“above the average
for the market”.
Your staff
are your
ambassadors for
your brand who
meet your
customers
every day.
7. Thein-storeexperience
6ixty8ight’s stores are designed in an
instantly-recognisable pink colour scheme,
with minimalist fit-out and carefully
selected music to appeal to the target
demographic.
Most range in size between 200 sqm and
1200 sqm. The new Mongkok flagship store
- it replaced a Fortress duplex - is about
500 sqm. In the mainland the company is
looking at refurbishing some of its larger
stores during coming months, but has no
plans for a flagship as such.
“We want our stores to be a destination
where [our staff] want to spend time. If you
have the right sort of people they’ll enjoy
being there as well.”
Buckingthetrend
Heikenfeldt’s strategies are clearly working.
Aside from the store growth, same-store
sales are continually rising in high single
digits”- all during a time when the overall
Hong Kong retail market has been in
decline, (although the vast majority of
stores are in the mainland).
The company plans to continue to
expand at the same pace as it has over the
last two years in Mainland China and Hong
Kong - and it is now in the final stages of
planning to expand into at least two new
markets in Asia.
“We are Asian. We have Asian sizes. Our
head office is in Hong Kong, we design
here and our buyers are here. We are very
focused around our own group.
“You have to be true to your
customers.Ӧ
Robert Stockdill is
Director of Content with
Inside Retail Asia, editor of
Inside Retail Hong Kong
magazine and has studied
and written about retail
across Asia and beyond for
more than 20 years.
7Autumn 2016 — www.insideretail.hk
