Big Retail Brands Get On With It Online

What a long time a year is in retailing. This time last year we had the major retailers spending all their energy arguing to the Government that they needed protection from the disparity associated with overseas online sales not having to pay the 10% GST. They even went so far as to put their hands in their pockets and pull out some dollars to fund an advertising campaign arguing their case. The result however was a big consumer and public relations glitch.

As we enter this Christmas shopping period the major domestic retailers have adopted a far more positive and insightful mindset, and are focusing on adapting to the switch to online purchases by many consumers.  The Age newspaper recently reported that the National Australia Bank’s Online Retail Sales Index shows that online sales grew 26 per cent year-on-year to October, compared to 14 per cent year-on-year in May. NAB chief economist Alan Oster said online sales were still only a small percentage of total retail spending at 5.6 per cent, but the rate of growth was accelerating.

The good news for our previously disgruntled big retailers is that growth in online sales was driven by domestic retailers, which accounted for almost 75 per cent of the sales in the year to October.

What was most interesting about the negative positioning taken by local retailers 12 months ago was their mindset seemed to be solely focused on the tax differential and not on the fact that consumer behaviour was changing and that they needed to change with it. But they are changing big time now. Managing Director at department store David Jones has declared his vision to see DJ’s become a world class omnichannel retailer. He also has identified that his omnichannel shoppers are four to six times more valuable to shoppers than just store shoppers. DJ’s launched their new site last month 90,000 items available for purchase.

Myer is also working hard at its online sales push. Managing Director Bernie Brookes is quoted in The Age as saying ‘…we are growing it at a rate as quick as we can take a photo and put it online…’ Myer is also planning an online version of its Boxing day sale.

What is exciting for our retailers is the fact that there is evidence to suggest that online shoppers tend to be much more loyal than offline shoppers. People are generally cautious about switching or trying new online retailers. This surely is a great opportunity for the likes of DJ’s and Myer who enter the online fray with buckets of trust in consumer land. I have to declare that Myer and DJ’s have always been my favourite Christmas shopping stores because in a gift giving sense you cannot find a more accommodating environment in which to return gifts that missed the mark (or size).

This Christmas period marks a great opportunity for our major department stores to position themselves in the preferred repertoire of online sites for customers because they truly do have an advantage over online sites based off shore. One huge advantage of being local at this time of year is that shoppers can shop a lot closer to Christmas Day. Myer is guaranteed that purchases made online up to December 17th will be delivered in time for Christmas.

Online is here to stay and it is encouraging to witness our major domestic retailers embracing the concept rather than shunning it. If you happen to be between the ages of 30-40 years you will probably be rejoicing because you have been deemed the kings of online shopping. Go click.

Peter Singline
Brand Scientist

Post a comment

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,