The recent half yearly financial reporting season has brought the spotlight well and truly onto Australia’s department stores. David Jones has flagged a possible 35-40% full year decline in net profit, with some newspaper headlines suggesting that DJ’s were in a fight for their survival.
I think we are all across the woes in retailing with the current economic climate and an enduring sentiment of caution amongst consumers. But what has been engrossing of recent times is the new business lexicon being bandied around. To this end, the following blog is sheer indulgence – simply sharing some of these, and importantly reflecting on the fact that it is the new world of retailing mandating attention be given to the labels expressed here.
Omni-channel Retail
Customers getting a seamless shopping experience across a retailers physical and digital sales channels. Yes, an advancement on the good old ‘bricks and clicks’ concept.
Vertical Retailing
The move by some retailers, eg Myer, to move back upstream in the value chain and acquire ownership of the brands they sell. Myer has done this with Trent Nathan, Sass & Bide and Wayne Copper – if they can get their minds around what is required to become a designer and manufacturer it is not a bad strategy.
Image Sourced from sassisamblog.com
Tortoise Thinking
In recognition of current DJ’s CEO Paul Zahra comment mid 2011, that when it came to the internet he would rather be the tortoise than the hare. Well unlike a lot of politicians he has been true to his word.
Image Sourced from theaustralian.com.au
Treasure Island
The term used to describe Australian retailing by international industry experts, as they marvel at how local retailers, department stores in particular, sell goods at prices the rest of the world only dream about.
Price Harmonisation
Yes the tsunami effect on our not so remote treasure island with the internet signaling to the world global prices. Hence the move by our retailers to more closely align store pricing with what consumers can buy online. That of course brings another new expression into the mix, ‘price deflation’ (speak to Harvey Norman about that, because they seemed to have inherited that disease a few years ago!)
Footprint demise (sorry our term)
The smaller store size of future department stores as they opt to get out of products they struggle to compete on, such as books, DVD’s, electrical goods, furniture etc. Five years ago new stores would have looked for space of 12,000-15,000 square metres, where as the future seems to be in spaces of 5,000 to 7,000 square metres.
The above is a great reminder that our ‘treasure island’ has been invaded by the gremlins of the internet, and they are here to stay. It is a brave new world, and it requires brave new approach.
Peter Singline
Brand Scientist
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