The brains of Australian retailers…
For god’s sake, get the point. We can now buy overseas stuff for half the cost that’s the same frickin brand or better. Retail buck up and get with on-line retail. We consumers are sick of big retail treating us like we know they treat their suppliers; dirt. What goes around comes around.
When do you want to learn? How long does a downturn have to run before you start realising it’s the new normal and change your strategy, rather than hoping it will go back to good old business as usual?
The latest Bureau of Statistics retail trade data say massive segments of the independent retail sector have gone beyond just having a tough time and are now borderline basket cases. One of the worst-affected areas is clothing. On a year-over-year basis, sales are down more than 10 per cent this year for clothing retailers that are not part of a chain. In April alone, sales were down 5.8 per cent. (Don’t feel bad. I saw some stats yesterday that said that 50% (in dollar terms) of all retail sales in the USA are now on-line.)
But I do say bad luck. When I was in retail, if it didn’t sell, you discounted it, grabbed whatever money you had left and tried again. Whinging does NOTHING but make enemies.
Forget poor service; no one expects service from retailers any more. You could fix it, but we live in hope. The real problems are way more expensive than something you could just fix with training and a few sales commissions. They are core – dated formats and store configurations (which you can’t fix with just a lick of paint and up-dating your logo, sorry), obliviousness to consumer product and bundling preferences, failure to embrace new technology and – sitting atop and presiding over the whole mess – basically; inept leadership.
People have changed the way they shop and Australia’s biggest retailers doggedly don’t want to let them. Now, as they are outflanked by internet start-ups, an influx of overseas brands, the high dollar and a large swathe of Australian consumers that are absolutely spitting furious with them, the only thing they can think of is to cry about unfairness, discount, open a few more stores in the bush and tell us that everything is going to be all right if only people would be more loyal to Australian brands. Oh, spare me.
Australia’s domestic chains have kicked us in the teeth for years. Your bad-brat behavior is finally coming home to roost.
The recent explosion in online retailing, with spending estimated to have hit $9.5 billion in 2010, has already cut a swath through the local sector, with David Jones issuing a shock profit downgrade and closures hitting booksellers Borders and Angus & Robertson, fashion retailer the Just Group and the DFO group.
The Commonwealth Bank released a study of the online shopping habits of its credit and debit card customers, showing sites offering group-buying deals and fashion sites had the most aggressive sales growth, while Generation Y (aged 21 to 29) and Generation Z (under 21) were the most prolific online shoppers.
According to the bank, of the $9.5 billion spent online, $5.3 billion was on domestic product retailers, meaning almost half was flying offshore electronically into the bank accounts of US, European and other international retail competitors.
”Given the high penetration rate of smartphone technology in this country – Australia has the third highest 3G phone penetration globally – we expect mobile commerce to help drive the next wave of online spending.”
”If you are a bricks-and-mortar Australian business, you have got a big job ahead of you because your customers are very keen and capable of shopping online.”
Retail has been too over-supplied, too lacking in genuine sales people, way too many same-same products, for way too long. Get over it. Differentiate products. Train sales staff. Incentivize shop floors. Design stores so they suck our money out of our pockets, or die.
Did I miss anything? Oh yes, one other problem… that most irritating of emerging Australian national traits, really putting a glaced cherry on this little ice-cream – a new- found fondness for good old-fashioned saving…
Geoffrey McDonald Bowll is the managing director of Melbourne creative agency Starship and a member of First 5000.
