Tuesday, 22 November 2011

Digital Customers Need a Digital Shopfront

It is no surprise that Australian retail is currently going through tough times. But for all of the noise being made around the increase in online shopping, not much is being done by retailers to get their piece of the action. A quick look at the websites shows just how behind they are, with only a few products on offer if any at all. Australian shoppers are amongst the most tech-savvy in the world, with the  Australian public traditionally being early adopters of new and emerging technologies. It is important now, more than ever that the right people for the job are in store and that managers adapt their businesses to suit the changing retail landscape.
Staff need to be knowledgeable and passionate about the products, otherwise consumers will simply go elsewhere. The way that consumers are shopping is changing, with mobile phones the new tool of shoppers to compare prices and do their research to complement their shopping experience. 96% of smart phone users reported using their phone to compliment their online searches.
To take advantage of this, retailers must change the way they approach online sales. Rather than complaining about how overseas websites are stealing customers away, retailers need to invest in their digital platforms and draw the customers back. Australian consumers are willing to shop local, with an increase in consumers wanting to purchase through local sites increasing from 24% in 2009 to 30% in 2011. For Australian retailers to cry poor by the increasing use of online sits to shop, they have only themselves to blame.
Training your in-store merchandising staff to work online is one of the options that can help to build sales. Use the talents of your staff and help them to help you. Skills can be transferred and a staff member who has a good eye for design in store is more than likely going to know what looks good online. Work with your Gen Y staff and ask them how they shop and what they are looking for in a website. It might be something as simple as having a map and contact details on the front page of your site. This sort of research won't cost you anything but will help build your online presence.
Retailers need to embrace the future and get on top of it now. If you wish to be left behind then by all means, keep complaining, your competitors are going to be the ones who benefit.

Sunday, 20 November 2011

Qantas - Bungle or Heroes, and what's this got to do with retail.

Well this blog is bound to get the biggest reaction of all to date. Many people have passionate opinions on the recent Qantas dispute, especially those who were actually stranded during the airline's shut down including one fellow writer, a professional it would seem who commented it was like being invited to a BBQ by a mate and having the door slammed in your face, very Un-Australian. REALLY ???

I am really surprised by the division of opinion over this and, not being one to sit on the fence, I just have to say it was one of the bravest corporate decisions of our time. As a traveler who was stranded in the USA for a week and possibly who should be more emotional about the impact this had on my ability to run my business, I have never been more happy to be stranded because it was about time that business stood up and did something about the unions and the antiquated working practices of the past; and this sure was something.

The problem with freedom of speech is it is often used by ignorant people with very little information at hand. Whilst Qantas did massively disrupt passengers for a week the fact is that the unions and it's members have been interrupting services for 10 months now and let's not forget they vowed to also strike over Christmas, potentially leaving us all stranded at this peak period when travelers want to be reunited with their families. The choice to take action now and ensure that we were not stranded over Christmas was brave and really the only sensible decision to make.

Be you an international airline or a retailer big or small we are all facing challenges never before seen in this country due to the Labour government’s introduction of Fair Work Australia. In Qantas’ case this meant enabling the unions more power in the bargaining process forcing tougher negotiations and making unreasonable and untenable requests of the business that could have lead to the ultimate demise of the airline in the long term.

In the retail space our special gift from Fair work Australia was the modern award which funnily enough is anything but modern. The modern award was implemented to simplify all of our awards, which did need to be done, and to then provide us with a standardized approach or one-size-fits-all approach. However, one size simply does not fit all.

 At a time when retailers are facing declining sales and reported slumps in consumer confidence, retailers have been slogged with increased costs that are in many cases more significant than the business can handle. Whilst we have seen many retailers go under we know that many others would have, if they had not been bailed out by their overseas parents.

Some of the main cost impasse centered around an increase in penalty rates for what the government titled "unfriendly working hours". Again, how can a one size fits all approach work when some industries working Thursday nights, Saturday or Sunday is a rare occurrence but in retail it is the main trading period, so to suddenly load costs to these working  periods of time is both extreme and unfair.

Another contentious issue was the increase of the minimum shift from 2 hours to 3 hours. Whilst many see this as fair it was a blow to retailers and hospitality businesses who were one of the few industries that offered after school jobs, this extra hour across all after school jobs would add significant costs to the retailers wage cost. In effect over 50% of retailers said they would need to stop offering after school jobs and rework the roster to utilise full time staff better. This is very evident when we see that whilst the unemployment rate has fallen to 5.3 % the youth unemployment rate has actually risen to around 16 %

The bottom line is that whilst Qantas may be an extreme case they have led the charge and stood up to the unions and the government and have been the voice of all Australian businesses. If something does not change we will see more and more businesses  closing under the pressure of these increased costs through the antiquated employment practices of the past, the world has changed and employment policy needs to change with it to ensure the viability of all Australian businesses.

From a retail stand point we have not even seen the full effects yet as many retailers were still operating under old enterprise agreements or collective agreements but as they expire and more are forced to adopt the modern award we are sure to see more victims fall under this new and ill thought out regime.

God bless you Mr Joyce it was an honour to be stranded for this cause.

- John Caldwell

Thursday, 10 November 2011

Flocking to our shores - but are they the right ones?

The Australian retail market has matured significantly in recent years and is truly on par with other international retail markets.. We have seen an influx of international brands into the Australian marketplace and the introduction of larger format stores and true big box retail with brands like Costco and  Apple aggressively opening stores in the Australian market   We have also seen amazing transformations in areas such has home brand development and supply chain enhancements to rival the product offers in other countries however often this has been through the help of expats trained for years in this type of sophisticated retail.

Whilst we have become a serious global player it has happened quickly thus not allowing us to train a lot of senior professionals, who previously have relatively low experience in how to run these mega businesses. It is for this reason that we have seen some come to our shores and remain stagnant and others come and fail.

We have long relied on bringing in senior talent to show us the way, with candidates from more sophisticated retail markets like South Africa, UK and the USA however in recent times the funnel has narrowed and the influx of talent have stopped finding us so desirable. This may seem odd to some as Melbourne was just nominated most liveable city in the world with Sydney, Perth and Adelaide all in the top 10.

The problem isn't the desirability it's the economic issues facing us, starting with globally out of whack tax rates which act as a disincentive for top talent, many of these executives can secure well paid employment with very generous tax benefits in other emerging retail markets. On top of this the cost of living in Australia's has also risen to catapult us to the top of those charts with Melbourne  and Sydney ranking 6th and 7th most expensive cities in the world respectively. Melbourne ranked 40% higher than New York based largely on housing costs. 

The consumer price index (CPI) showed a 19% increase in 2009-2010 highlighting the real increase in the cost of living in Australia, the trouble is that the average wage only increased by 3.8% for the same period leaving the average income earner to struggle with meeting daily household expenses.
It is figures like this that are turning talented retail expats away from Australia in droves at a time when we need the talent more than ever. When we look at some of our failed retailers of late such as Borders, Colorado etc the problem was not the brands or the concepts it was the infrastructure in running them and the knowledge of how and when to turn them around. If we had the right talent with depth of experience behind them we may not have seen some of the recent catastrophes.
You may ask if this is the case then why is our immigrant population growing  ? Yes it is! In fact numbers are on the rise in 2009-2010 208,000 people migrated to Australia and in 2010-2011 213,000 people came so obviously we are still an attractive country to some. The majority of immigrants in the 2010-11 period were from Southeast Asia, Northeast Asia, Southern Asia followed by New Zealand ,however the concerning trend is the increase in these people  not in employment, this  rose from 2.0% in 2008-9 to 2.7% in 2010-11.

This begs the question are we attracting the right people ??? That's something you can answer for yourself but It is becoming more and more obvious that when it comes to attracting top talent to drive our economy forward it is getting harder and they no longer seem to think we are the lucky country.

- John Caldwell