Tuesday, 8 April 2014

Retail wrongdoings

Australian retail is dead.

Well, that's why my friend often says and I'm sure many local retailers would agree.  It seems like it's been a while since shopkeepers have had something positive to report among dwindling sales.

The latest talk of a merger between Australian behemoths Myer and David Jones seems to be another sign of the tough times.

Confusingly, the arrival of international brands like H&M, Zara and Topshop in Australia are treated to much fanfare, demonstrating that local shoppers still have a healthy appetite for retail therapy.

When it comes to the crunch, as much as I like the concept of supporting local retail, increasingly it's simply not cost-effective or convenient to do so.  

I may be naive, but here's five ways Australian retail could reverse its fortunes:

1.  Look outside the window
A scan of Brisbane shops this week shows the "mid-season sales" are in full swing.  I'm not sure what season retailers are referring to, but by the knitwear and heavy jackets I'm assuming autumn and winter.  The only trouble is that the mercury is still hitting 30 degrees during the day in Brisbane.  Could this be why those jumpers and cardigans haven't sold so well and are now on sale?   I'm sure good marketers can sell ice to eskimos, but I'm not buying winter clothing while I'm still sweating.

Winter jackets anyone?

2.  Remember, we have the internet now: price
I love a particular make and model of running shoes.  In Australian shops they are $230, but I get get them online from overseas for $150 with free shipping.  That $70 isn't down to the overseas retailer not having to charge a GST either.  Retailers need to remember we have the internet now and can see what the same item is being sold for around the world.  I can't help but feeling Australians are being gouged on some products, but I don't necessarily think it is the local retailers' fault.  One UK-based online store, Wiggle, used to ship these shoes to Australia, but the brand stopped them from doing so because they were undercutting the local retailers.   International brands have traditionally set the prices and distribution for their products in different markets based on what they think the "market will bear".   But who's going to knowingly buy the same product for considerably more money?
Same product but wildly different price tags

3.  Don't be shy, put it online
Australian bricks-and-mortar retailers fear online retailers, yet they've been reluctant to properly enter the online arena themselves.  Only recently have the larger Australian department stores started listing all of their stock online (rather than just the pdf of their latest catalogue) and introduced online shopping.  Tip: if you want us to buy from you, we have to know what you're selling.  For years in America, retailers have used their stores to an advantage, allowing customers to shop online, but pick up their products in a store within 24 hours.  This is a massive point of difference traditional retailers need to exploit more over their online competitors.

Put it online if you want people to know you sell it

4.  Remember, we have the internet now: range
Back to those damn running shoes.   In Australia, the make and model I like is available in two colours. It's available overseas in eight colours.  Australia often only gets selected items of international ranges. This simply reinforces what local shoppers have learnt; if you want a better choice, head online and head overseas.

Give shoppers the full range

5.  Shape up the shipping
I've had jackets, jeans, shoes, books, DVDs and a host of other items shipped to me from the other side of the world for free.   When I order something small online from Sydney, there's a hefty postage charge.   It doesn't make sense.  To add insult to injury, the package from the UK arrives before the one from Sydney.
How can international shipping cost less (or nothing) compared to domestic shipping?

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