What is going on with Australian retail currently – main media reports for big names such as David Jones, Harvey Norman and Myer show double-digit profit downgrades appearing each month, we also see retail player Premier Retail and pureplay ASOS releasing positive sales figures. The advent of online retailing has set the cat amongst the pigeons and it is often the scapegoat for closures and job loses and retail associations love nothing more than lobbying the government for changes to GST laws, so with so many different views and opposing results – many might be scratching their head wondering what is happening.
Recently Harvey Norman director Kate Page said that the retail giant may consider relocating to Hong Kong if retail conditions didn’t change and government met their demands – the statement has been play out in media circles many attacking the headline grabbing rhetoric. It would seem doubtful that Harvey Norman would ever leave the shores – but the ongoing nature of retail commentary by Gerry Harvey and recently Ms. Page doesn’t do wonders for their brand popularity amongst the masses – aka the consumers. Harvey Norman must also be the only business where the major shareholder openly attacks online sellers – citing that they aren’t seeing the figures to make it a worthwhile investment - then admits his family all buy online – yet he gets online?
Harvey Norman is actually well suited to capitalize on the omnichannel or multichannel (the terms are the same in my opinion) retail – the concept that might help save traditional retail. Power Retail published information and a graphic from CBRE research that highlighted the consumer habits – 41% will pick up in store when they buy online – a staggering statistic – that means Bernie Brooks Statement about the ‘old gang’ ruling online in three years looking likely. The research also showed that2/3 of stores will use their physical presence to help fulfill online orders – this again is a brilliant use of existing resources available to a traditional retail chain – and improves customer service by reducing delivery times, and even offering a local touch if possible.
So as multichannel – a retailer being in every channel possible looks like the way of the future – we see a pureplay global retailer ASOS announcing some fantastic results. ASOS capitalize on the efficiencies of eCommerce – and that their target market young females – are all online social beings. ASOS was a revelation when it arrived in Australia – it was in existence in the UK for years – honing their skills in a more mature market so by the time they arrived here with what are European online retail standards – they were leading the pack downunder – the increased professionalism is a huge benefit to the whole market.
It remains uncertain if ASOS will open a physical outlet to capitalize on the multichannel opportunities – however it appears that a global eCommerce player is about to open traditional doors – Amazon – seems likely to have outlets by next year. This decision links well with the research suggested above in the CBRE study and what we know of consumers from stories on the street – trial in store or research online – buy through the other (not opposing) method. And again this move by Amazon highlights that consumers still have a need to touch and feel – something that online will probably never be able to replicate.
Premier Retail announced some pleasing results last week – with an announcement that profits are up 68% – the Premier retail group has numerous brands aimed at the younger retail market such as Dotti, Jay Jay’s, Smiggle and Peter Alexander. Whilst some of the reason for the profit increase will be do the significant cost cutting measures being undertaken by the group – the news bucks the trend from the rest of the retail industry; and helps secure the long term future of many of Australia’s preferred shopping icons. Premier Retail has recently re-launched a few of their websites and is working to ensure their brands-many of which are aimed at the internet age shopper- have sufficient resources and engagements with these young shoppers in the places where they are – such as social media.
The way we shop changes so do does presentation – consumer has more power than ever before and with social media is prepared to voice that opinion – think target this year. The multichannel presentation of items allows engagement and interaction with customers like never before and has retail evolves it needs to be done in a way of keeping in front of the customers expectations. Australia retail is part of the ‘perfect storm’ currently as the high AUD and advanced overseas retailers make serious plays at local consumers – the time is right to engage online and review traditional retail models – rather than think about moving to Hong Kong.