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Introduction

The IADS travelled to Turkey (now known as Türkiye) last June to meet with Cem Boyner, the CEO of Boyner Grup, a former IADS member, to get an update on his latest initiatives following the Covid-19 pandemic. Located between Asia and the West, often tarnished with its international policy decisions (to the shame of Turkish businessmen), and riddled with inflation (estimated at 78,35% for 2022, a 24-year high), it is easy to overlook the country and consider it done.

In reality, the retail market is buoyant, and many innovations are taking place, which made the trip all the more interesting as many of these innovations could be interesting for IADS members to look at. We review below our store visit, as well as the insights collected during the meeting with Hopi, Boyner Grup’s data venture.

Company history and background

Department stores capitalised on the expansion of Turkey’s ready-to-wear sector in the 1990s and a concurrent boom in large shopping centres that have continued further. Despite continuous unfavourable exchange rates making imported goods significantly more expensive, as well as extremely expensive customs fees (up to 35% for merchandise coming from some parts of Asia), fashion and luxury found their way throughout the country. On another hand, the growth of Turkey’s economy gave rise to a new middle class and more wealth among the already rich. This transformation led to increased foot traffic at premium department stores as people became more eager to try new brands and spend beyond basic necessities.

Among the significant players shaping up the market, Boyner Grup was founded in 1952 as a clothing manufacturer, by Osman Boyner. The first Boyner store opened in 1981 and was operated under the name of Çarşı (name converted to Boyner in 2004). Nowadays, it is led by Cem Boyner and is mostly addressing the middle class, operating under the brands Boyner, YKM, Boyner Sports, YKM Sports, and Boyner Outlets. They report 276,000 sqm of retail space in 97 stores spanning across 37 cities.

The merger with YKM, another department store company, was achieved in 2012, which ultimately led to Boyner’s resignation from IADS in 2016 (YKM was a member since 2003 and membership had been transferred). Business includes international brands (active sportswear, Men’s, Women’s and Kid’s footwear, accessories and RTW, cosmetics, home decoration) and a significant private label business (13 brands). Boyner also launched Boyner Home in 2017, with stores dedicated to kitchen, bathroom, home textile, and electrical household appliances.

In 2015, the group was composed of 2 main arms: the Boyner retail and textile activity, including the manufacturing capabilities and some private labels sold through their own retail network, and the retail branch, composed of Beymen (a luxury department store brand name founded by Boyner in 1971) and AY Marka. Cem Boyner increased his equity in Boyner Retail and Textile Investments, while Qatar-based Mayhoola (which also owns Valentino, Balmain and Pal Zileri) invested in the retail branch. This led to the restructuring of the group in 2019: Beymen and AY Marka are now owned by Mayhoola while Boyner Holdings remain the full owner of the textile retail and production unit, including:

• Boyner stores,
• Altinyildiz (textile manufacturing),
• BR Magazacilik (retail distribution of the Altinyildiz brand, in partnership with Ran Retailing – BR reports 200 stores in 60 cities in 2020, and 300 points of sales including wholesale),
• Hopi (mobile and telecommunications),
• Morhipo.com (online retailing, launched in 2011 and ranked 6th online retailer in Türkiye with a turnover of $172m).

No financial information has been officially released at least since 2018.

Visiting the store: A holistic department store

We visited the latest Boyner store, in the Cadde location (in a residential part of the Asian side of Istanbul), which opened in September 2021 on 4,200 sqm and 5 floors. This store, seen as a prototype for the new Boyner concept, replaced a much bigger unit which was, according to Cem Boyner, in a much better location, and which became a local meeting point for residents in the past 22 years in addition to being a cash machine, thanks to a private brand, Limin (not sold in the new store). Boyner made the decision to challenge all this (and make the most of a real estate opportunity) as the goal is to move from being a department store company to a “multi-brand lifestyle store”, positioned on the mid-range segment (the goal is not to compete with Beymen, which operates all international luxury brands in).

What is sure is that the store is highly visible: the entire façade is covered with a 38-meter-long screen displaying anamorphic art pieces (a technology allowing to have a striking 3-D feeling from the store entrance) and Boyner makes sure people see it, thanks to a Costa Café just nearby (they have secured the franchising agreement for the country). Art is basically everywhere in and on the store (this is unusual for Boyner) and every artwork has been co-developed with artists, to make sure they are interactive and echo what is going on in the store, to avoid giving a museum feel.

The basement, dedicated to sportswear, is striking: all walls have been built in recycled plastic and wood (the eco-conception is at the core of the store model, for instance, solar panels on the roof help power the store, and toilets are used with collected rainwater) and, in addition to an immersive décor and visual merchandising, many services are offered to customers: a cold room to try the garments (similar to Canada Goose in Toronto), bikes where customers can pedal to recharge their phones, free water fountains in the gourds section… all in the middle of an advanced VM set up (a step forward for the company according to the staff), using interactive LED-lit flooring and artworks, or 3D holograms on the shelves to animate the products. This selling space is working extremely well and generates 25% of the total store turnover.

The ground floor displays a space dedicated to sustainable goods at the entrance, and the cosmetics spaces (25% of the turnover).

The sustainable goods space, where many products have been developed in collaboration, also features artwork developed by artists concerned about sustainability (a common trait across the whole store) and collecting points, where customers can leave their unwanted items, which are then recycled and sold, financing grants to students. Art is only displayed and not for sale.

The cosmetic area is more classic, with the usual names (Clarins, Lancome, Estée Lauder…) displayed in their own concept boxes with white logo on black background, all operated in concession (even though the system is quite exotic in this store: brands pay for their salespersons, do not pay rent but Boyner collects 100% of the turnover, making this system a mix between wholesale and concession).

What is more striking is the 40m high LED screen that goes from the ground floor to the 4th floor, displaying artwork which interacts with customers through their cell phones (an astute way to collect data!). This proves that it is possible to use screens in a lively manner, and not just as a décor like in, for instance, the Nike House of Innovation in Paris.

The first floor is dedicated to Women’s fashion, with an upgrade in terms of brands presented compared to what Boyner has in its other stores: Lagerfeld, DKNY… (the retailer wants to remain accessible to its customers and not go full speed on luxury). They also promote local initiatives, by collaborating with influencers and artisans to produce and sell one-of-a-kind products at accessible prices. There are no cash desks: Boyner is testing on this floor mobile payments. When asked about how they were dealing with the antitheft tag removal and the gift wrapping, they showed a mobile unit where all these actions can be performed on the spot and moved very quickly from one side of the floor to another.

The second floor is dedicated to activewear and denim. There, the seating section has been developed by an artist whose artworks are displayed in the entrance, echoing what she does in her art, and is completed with videogame booths and the possibility to interact with the screen, which increases the time spent in-store.

The third-floor features men’s collections. Interestingly, and due to the nature of the market, the mannequins also display women’s products there, as many customers are females looking for gifts for their husbands.

Finally, the top floor is dedicated to homeware and kids offers, as well as the “customer relation” lounge, where customers can proceed to click and collect and ask for home delivery. The lounge seemed to be still under construction at the time of visit, and was very surprisingly uninviting, in stark contrast with the rest of the store.

In terms of F&B, in addition to the Costa Café at the entrance, the store is flanked with a new concept, “Vertical restaurant”, which is a must-see. The concept is to be entirely sustainable at 100% and self-sufficient in terms of energy, water and consumption (except the aliments). This goes through, of course, the decor (entirely recycled), zero plastic and carbon policy, the use of recycled and filtered water at the bar, but also specific partnerships with LG, Electrolux or Bosch to create kitchens that customers can rent or where they can follow lessons with chefs, as well as an upcycling workshop, a local vegetable growing unit, and the systematic recycling of 100% of the food waste into facial cream (from the coffee waste), soap (from cooking oil), compost and pet food. On 800sqm, the restaurant features a high-end and vegan Turkish cuisine restaurant, a pizza place, a Japanese place as well as 3 locations that are offered to up-and-coming Turkish young chefs or street food stars every week, to generate curiosity and traffic.

What’s great and what’s next

The Cadde store is delivering results: the average ticket is 27% higher than in other stores, thanks to a different brand selection and a lifestyle approach, with many places where it is great to spend time (time spent in-store increased from 30mn to 1 hour). This concept will be rolled over to 20 stores in 2023 and 30 additional ones in the next 5 years.

Overall, the bet to create a “multi-brand lifestyle store” is paying off, as the general feeling is an energetic store, full of great ideas, addressing a young clientele and giving them an immersive concept, which feels rich but not expensive. Is that to say that Boyner has developed a new concept store? When discussing with Cem Boyner, he confirmed that such a concept was to be deployed on 9,000+ sqm stores. Among the good ideas that we spotted:

-    The many fun services (cold room to try warm garments, bicycles to charge phones,

-    The collaboration with artists to make art part of the store (and not museum-like, for instance, Le Bon Marché in Paris) and with sustainability in mind,

-    The practical approach, for instance with the mobile wrapping and antitheft tag removal unit, which has been developed by salespeople themselves,

-    The ‘Vertical’ restaurant and its radical approach, which could be interesting for IADS members in their food offer.

Of course, we had some questions when it came to salesperson management: 60% of them are paid by the brands, and only 40% are managed by Boyner. In these conditions, given the fact that the store has a cohesive, holistic lifestyle concept, how to make sure that they are all working together and orientating customers, instead of only selling their own brands?

Moving forward, we were also introduced to the Boyner online business, which is currently representing 30% of the total group’s turnover, with 17m loyal cardholders (in a country of 85m people).

Boyner is launching a new delivery service, “Boyner now”, with a 90mn delay in the whole of the country. When customers use this service, a Boyner-branded delivery person comes to their house (including, in the case of fashion items, a +1 / -1 size unit, just in case), waits for the selection confirmation and retrieves payment (meaning that customers pay for what they keep and not during the order itself). With this new service, Boyner hopes to capture 60% of its turnover online. In terms of technics, this service is fulfilled from the 97 stores in the country, and customers have access to 4m references, vs. 10m on the “normal” e-commerce website, which is also going through a revamp in order to increase the length of stay online from 1mn and 1% conversion to 8mn and 4%.

This growth in digital is supported by Hopi, another venture that Boyner launched in 2015, and dedicated to data management for B2B (marketing solutions, digital transformation, payment systems solutions, BNPL solutions) and B2C (hyper-personalized services for their 13m app users), leading to a full ecosystem which is truly competing with what Amazon or Alibaba can propose to Turkish retail companies today. Boyner will be looking at international expansion for Hopi in 2023 and hopes to equip foreign retailers in the future.

Conclusion

Following the split with Beymen, Boyner Grup knew they had to reinvent themselves and the experience they wanted to provide to customers, so they initiated a sea of changes well before the Covid-19 pandemic. As a consequence, the pandemic acted as a catalyst and also allowed to speed up some of the planned changes.

Today, many boxes are ticked: a new approach to instore experience (which really competes with many higher-end world-class department stores), the use of art at the design level of the store to make sure it is echoed in the customer journey rather than just sitting there, a radical approach to sustainability with many innovative processes, and a clear vision when it comes to the use of tech and data in order to accompany today, and predict tomorrow, customers’ purchases. The setup of the Boyner Now delivery in 90mn in the whole country is a tour de force and it would be worth it for IADS members to go and see how this is actually performed in terms of systems and processes.

Credits: IADS (Selvane Mohandas du Ménil)