It is not only the top executives of luxury brands like Louis Vuitton or Gucci that have trouble with cheap imitations. Managers at eco-chic furniture store Tree also battle unscrupulous copycats.
Tree managing director Kate Babington, a former executive of The Body Shop, says it is the No 1 de-motivator of staff attempting to sell their product.
"When [other companies] copy your designs and then blur the lines by advertising items as ethically-sourced or ecological, then this becomes incredibly de-motivating for staff," she says.
Babington says the staff often find themselves in the position of being educators.
"They often have customers who say they have seen what appears to be the same product elsewhere and question why it is cheaper there," she says.
With a small staff of 45, there is intense brand loyalty from the staff to the Tree brand, which has become renowned for recycling materials salvaged from old furniture, railroad sleepers, boats and bridges. Most of the furniture is made in Indonesia from reclaimed teak that bears the Forest Stewardship Council (FSC) certification. This ensures the materials used are sustainable.
Tree was launched in 2005 and last year rapidly expanded, adding another two stores at Sai Kung and Cyberport to your existing boutiques in Horizon Plaza and SOHO. How did you manage to open so quickly, especially in the face of keen competition?
When you take your existing staff from having two shops, to four shops, you really need to [invest the time to] make sure all of the right [operational] procedures are in place and that frontline staff know what they are doing. Everything is a learning curve, and with hindsight I wouldn't have opened two stores in one year. But Sai Kung is a growing market - there are new schools about to open and people who live there also like to shop there. I had been looking for a shop in Sai Kung for a long time when we were approached by Cyberport with the offer of a good retail space so we decided to go for it. And then, within a week we got a call to say there was a perfect waterfront spot available in Sai Kung so we just couldn't refuse.
Tree was founded and is owned by lawyer Nicole Wakley, who has since relocated to Australia where she lives on a hobby farm in North Queensland with her husband and two children. You were friends before she asked you to come on board. How do you manage your working relationship, especially with Nicole half way across the world?
At the moment, Nicole's main priority is her family so she is pretty much hands-off. I do update her occasionally about what is going on. In fact, I'm due to travel to see her next week. When I was working for The Body Shop, we would often sit down with a glass of wine and she would ask for advice. She comes from a legal background so she didn't know how things should happen (in retail). But then she moved to Australia where she was running the business remotely and it wasn't working out. So I joined. I don't think I could have come into the business while she was still in Hong Kong. Our skills are very different and complement each other. If she ever came back to Hong Kong, we are now in a position where we already have very clearly defined roles and we would work as we've already been doing.
What were the major management challenges facing you when you first joined Tree?
The main issue was that Tree had grown so quickly but the [management] infrastructure was not there. I had to put in place the systems and processes to enable it to grow further. And for me, the question was how to marry two desires together - maintaining the passion for design and creativity while also running a business.
Your time at The Body Shop was spent in marketing, category management, fair trade and sourcing. How has the Body Shop philosophy influenced your approach at Tree?
The Body Shop emphasises profit with principles and that is exactly what Tree is about. Part of the objective is not just money, it's about the people who work for the company and how you make the products sustainable. No brand is 100 per cent (ecological) but when you are not 100 per cent you do things like tree planting (so far we've planted 40,000). We also develop strong partnerships with only a select group of people. We don't have a lot of suppliers, so it's all about our relationships with those few people. We are great believers in gut feeling - whether that's buying products or opening our stores.
How do you engender loyalty to the brand, and keep staff motivated and interested in what they do?
Money is a very short-term motivator. You have to create a happy work environment, where staff want to come to work and take pride in what they are doing. This is done by educating staff about the story and integrity behind our products. Team building CSR (corporate social responsibility) exercises are also regularly undertaken. We spend a lot of time working together so we might as well spend time having fun. It is a small company and it is nice to see that you are directly impacting a lot of people's lives. And for me, this is personally motivating and rewarding, and creatively a nice place to work.
How do you manage to retain your staff?
We find it hard to get good retail staff. But we also have a low turnover of staff. We still have the original carpenters and delivery team. We have never advertised for staff, only those on our sales team. We have also been known to create jobs around people we meet. We also want our staff to grow, so one of the sales team has been put on an interior design and CAD course. This has also made them more confident with customers and able to grow as an individual. We also have English classes for staff, as we are a multicultural company with people who are African, Chinese, Pakistani and Filipino. The last thing you want people to do is stagnate. Of course, I want them to stay and feel like there is potential to progress. But sometimes staff need to grow in a different direction. If you cannot give them what they want (for example, if someone in sales wants to move to the advertising side), you cannot hold them back. Having said that, when staff leave they often still want to be involved and part of the team. We have a few staff members who have resigned but who are now working for us on a freelance basis and we try to offer this where we can.
How do you deal with poor performance?
Our employee manual outlines our work ethics, expectations for what our commitments are to staff and what we expect in return. If you have poor performance you have to work out why this person is performing poorly. Is it because of a lack of knowledge, or is it their attitude? If it is their attitude, I can't do anything about that. But if it's training then I would need to invest more time into their training. We have had poor performance very rarely. My management style is very direct and I'm honest and straight to the point. So I never let it get to the stage where there's a problem. And I don't believe that people do not want to do well.