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Geared for the future

The Gadget Shop is expanding its footprint online to help create a better shopping experience.

Hannes Van der Walt, The Gadget Shop (Mike Turner)

Unwrapping a simple Christmas present in 2004 was perhaps the greatest gift Hannes Van der Walt ever received.

Although it was quite an inexpensive USB laptop light, it was the gadget that sparked a dream. Fast forward 13 years and that dream is now a reality for Van der Walt, founder and CEO of The Gadget Shop, which comprises 15 physical stores, and has recently had to expand into a new head office next to the N1 highway near Centurion.

In early 2000s, gift stores in South Africa catering predominantly to men were non-existent and this is where Van der Walt realised there was a gap in the market. After researching the concept, and borrowing money from family, he imported a small shipping container comprising 97 lines of inventory from China and opened the first store in the Brooklyn Mall, Pretoria in April 2005. The first shop assistant from that store is, today, the head buyer responsible for overseeing over 6 000 lines that the company now stocks.

While Van der Walt was no stranger to retail – prior to launching The Gadget Shop he’d owned a computer store as well as a sports bar – the main challenge he faced initially was convincing a landlord to buy into the business concept and allow him space in a shopping mall. Van der Walt believes it was his passion for the business venture that convinced the mall owners to give him his first break.

Franchising

With only a single store in Pretoria, the market was hungry for more. Van der Walt was inundated with requests to offer franchise opportunities. And, in 2010, the company decided to take this route, as it seemed to make financial sense and would help to grow the brand’s footprint. With a mixture of
entrepreneurial enthusiasm and naivety, Van der Walt thought franchising was a simply matter of taking his successful recipe, putting it down into an ops manual and handing it over to a franchisee. Then, the franchisee who, after reading and understanding the concept, would simply follow the steps and exponential success would blossom from there.

Unfortunately things rarely run that smoothly. The company’s backend wasn’t fully geared towards the franchise system, which presented operational issues. Then, after five years, with six franchises in operation, Van der Walt had a bad experience with one of the franchisees who had ramped up supplier
accounts and then run into financial difficulty and was unable to pay his bills. As the franchisor, the suppliers approached Van der Walt to make up the shortfall.

This was the driving factor that forced him to take control of the stores. “The business is specialised and hands-on,” says Van der Walt.

It’s not another fastfood outlet where you can give a franchisee a ‘proven’ ops system they can tap into. Unless you’re passionate about the products and the store concept you can set yourself up for failure .”

Partnership

Part of the resulting restructure was the creation of a partnership with Neville Read, who owned a number of the franchises. Before that Read, business partner and director at The Gadget Shop, had imported products for The Gadget Shop through his own import business. The new partnership now enabled the business to expand into the wholesale sector. Together the two partners took control of the stores, which Van der Walt says, in hindsight, was the best decision.

The franchise concept is not off the table completely, as Van der Walt says it could be re-visited in the future, but this time with more experience of what’s involved.

Online presence

Since the partnership formed in 2014 an additional nine stores have opened, including its e-commerce store. Having invested heavily in the required infrastructure, the company this year increased its e-commerce staff by 600% to meet demand and grow the platform.

Van der Walt admits the major challenge is converting browsers into buyers. He does recognise the benefits of having both a virtual and physical presence, however. “It’s not unusual for customers to arrive at a store requesting a list of products they viewed on the website,” he says.

With 15 brick and mortar stores in Gauteng, the Free State, Eastern and Western Cape, Van der Walt admits the business isn’t looking at opening any further branches itself as it intends growing its online presence as a priority, and is currently devising a strategy to achieve that.

The future

Van der Walt is optimistic about the future, for both the retail stores, and the wholesale and distribution side of the business. The company also supplies specialised products from China for independent toy, stationary and outdoor retail stores. The new offices and warehouse in Centurion will accommodate future growth opportunities, from these different channels. The move has also acted as a turning point to help focus attentions on ensuring the business’ backend systems are aligned and refined to both current and future growth possibilities and expansion, not only in South Africa, but also with an eye beyond the country’s borders.

Hannes’ hints for success

“Don’t ever think the journey is easy,” says Hannes van der Walt. “A dream can only come true when you fully believe in it, are prepared to work hard and put in the long hours.

“Inspiration, passion and determination are three key elements in making the business a success. It also pays to have people in the stores who are passionate about the products they sell, because it creates a wow shopping experience for customers, which is key in attracting them back.”

Faced as we are with a touch economic climate, Van der Walt says, it’s important to remain focussed on the things you can do that are under your control, and do the best that you can, whatever the circumstances.

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