Havaianas Australia was predominantly operating as a distribution business with minimal presence in brick-and-mortar direct-to-retail channels. The existing distribution model was insufficient in adapting to demographic shifts and failed to address the accumulation of aging stock over the years.

Our objective was to resolve these issues while minimizing markdown aggressiveness and avoiding disruption to the established wholesale distribution network.

Given the sensitivity of the approach with regard to overall business perception, we conducted a thorough analysis of the existing wholesale distribution network and overlaid this data with consumer purchasing power parity, segmented by region.

This analysis produced a heat map that identified areas where Havaianas' distribution was underdeveloped and highlighted potential for expansion without significant product discounting.

Despite these insights, we decided against long-term leases due to the low transactional value of the product.

Our strategy focused on deploying pop-up stores in regions with low wholesale penetration but growing residential development. To execute this strategy, we created a modular kiosk design that was easily transportable and maximized product storage efficiency. The replenishment process was fully automated, with products delivered pre-hung and ready for display, thereby minimizing handling and improving turnaround efficiency.

The initial rollout of our pop-up stores proved highly successful, with no observed sales erosion or partner complaints impacting the existing wholesale distribution network.

While the original plan was to deploy three pop-up stores per summer, the positive results prompted an expansion to five permanent stores and eleven pop-up stores within 18 months, creating employment for over 80 individuals.

The retail network evolved into a hybrid model of clearance and full-price outlets, maintaining average retail prices comparable to those of our existing wholesale customers.

Overall, the project achieved several key outcomes: it enhanced market share, cleared all aging stock, generated a new revenue stream, and optimized company operations by automating tasks, improving furniture design, and enhancing distribution efficiencies.