Thursday, 6 December 2012

Employer Branding it’s not just BS

Working with so many global retailers I can say it is a fact that most retailers don’t do a great job of employer branding. In my opinion, it’s not because they don’t want to, but because they don’t understand it.

Employer branding is not just how pretty your job ads look, it is so much more than that. In fact, the visual side of it is just the icing on the cake. The process of developing and refining your employer brand can be an invigorating experience and can help outline the culture of the entire organisation.
Whilst there needs to be a strong link between your consumer brand and your employer brand they are by no means the same thing.
When developing your employer brand you need to look at all areas that it will affect:
  •  attraction
  • on boarding
  • training
  • retention
  • internal
  • external communications
  • remuneration
  • benefits including incentives
Having a strong employer brand could be the difference between someone joining your company or not, but it should also be the reason someone chooses to stay and grow with your company or why they choose to leave.

See the key that most people miss is that, once you are clear about your employer value proposition (EVP), a huge part of your employer brand is to ensure that you then meet the expectations to existing employees of the promises you make in the market place.
Sounds great but where do I start I hear you ask? Well of course you can contract a consulting firm (and there are some incredible ones with great reputations) however this can end up being hugely costly.

Step 1 is understand what you want to get out of this. Improve culture, reduce staff turnover, change the perception of your brand as an employer ? Once you are clear what your goals are, it’s time top start the research. 

Research does not have to be expensive or time consuming. The first research programme is easy and the audience is siting right next to you. Develop an anonymous 360 degree review process with your current team and ask them the key questions about what is good and bad about working for the company, what would engage them more and what they look for when looking to join a company. You can also commence exit interviews or put together forums for people to give feedback in a relaxed environed.
This alone will develop the foundations for the entire program. It is likely you will discover a lot about what drives people to work for you and this can be “exploited” when advertising for people in a cluttered employment market.

If you wanted to take it a step further you could have a brief survey that candidates fill out before and interview or if you work with a recruitment agency you could ask them to run a survey for you as well. If they are a quality firm they will already have information generically on what people are looking for.
Put together a committee and involve stakeholders from all areas of the bushiness. It’s a great way to keep it impartial and get buy in across the business. 

The key thing to establish here is the message you want to portray that will build an emotional connection with the job seeker and also to tell existing staff what the brand stands for and how they should be feeling in the business.
Key things to consider when putting your employer brand together:
  • Is it in line with your consumer brand, not contradictory
  • Does it add up ? Can you actually deliver on this promise – Buy in and regular 360 are a good way to measure this
  • What does it mean for someone looking to join your business – What can they expect
  • Packing up your offering into financial and non financial EG car parking, Birthday leave,
  • Show how you put people first.

Once you have got your package together look at any means of PR highlighting who you are as an employer. Recently Retailworld launched the Retail Employer of the Year Award and the companies who won were the ones that ran an impressive internal campaign asking there people to vote for them, be proud and not afraid to ask your team for support.  What better way to demonstrate that you are an employer of choice than winning awards voted for by your team.
Lastly once you have a clear message use it across everything and keep it top of mind remember HR is PR.

I was involved in an employer branding process with Toys R Us and the research told us that people expected to have fun at a “toy store”. The company however wanted to be taken seriously, so after a long process working with Employer branding specialist Peter Shean, the employer branding tag line was developed “serious about fun”. This really did speak to the heart of the brand and got the message across. The tag line was then shared across all HR areas – Serious about L&D, Serious about OH&S and was adapted perfectly across all areas.
The bottom line of employer branding is to use it as a fun exercise and a way to get past what you believe about your brand and actually hear what others think.

Too many people have had their head in the sand for too long. If you want to stand out as an employer of choice in a cluttered market place then this is the time to do something about it.
- John Caldwell

Sunday, 2 December 2012

Australia's leading Retail Employers Announced!

The votes are in and the country’s leading retail employers have been announced.

In a world where job seekers want the whole package – culture, work/life balance, career progression opportunities and incentives with a salary to match – it’s hard to create a ‘one size fits all’ employment brand.
Retailworld Resourcing introduced the Retail Employer of the Year Award to recognize the retail brands getting it right on all levels. Now in its second year, fierce competition in the votes-based award saw substantial growth in nominations and campaigning retailers for 2012.
Repco was the winner in the large category. Comments from voters had common themes around the fantastic culture and many observed that the brand “really cares about its employees” and that the business “has a proven record of employee retention.”
TS 14+ took out the medium category, with huge support from employees and happy customers who commented that it’s “like a big family… they’re always so warm and friendly.” One voter summed it up by saying, “TS14+ are totally committed to providing ongoing training to support and develop all of their staff.  They live and breathe the most amazing philosophy of professionalism, play, being there and making their day!”
Perth based retailer Gone Bazzar look out the small category aimed to recognising retailers with less than 100 full time equivalent staff.
New Zealand winners included The Warehouse, Amazon Surf and Lush Cosmetics.
For most, the perception is that employment branding is the same as the consumer brand and that couldn’t be further from the truth.
A strong employment brand looks firstly at what you stand for as an employer, what the benefits are of working for you and most importantly how you live up to those promises.
This award is a chance for retailer’s teams to let them know that they appreciate the employer’s efforts.
As a constant campaigner of retail as the career of choice, Retailworld are thrilled to see the amazing work that retailers are doing to attract and retain talent within their business.
Nothing beats word of mouth, and winning this award is a credit to the brands that are putting in the hard yards.
- John Caldwell

Thursday, 22 November 2012

Decjuba – Rebirth of a brand

In a time in which many are claiming spending is down and business is verging on impossible, one entrepreneur is bucking the trend, bringing the Decjuba brand back from certain extinction.
When I arrived at the Decjuba offices in Collingwood I was immediately impressed.  Rather than a standard head office removed from the stores, it emulated a retail store. The staff moved with a purpose yet none to busy to greet me as they passed. Behind the stylish and well-designed reception was a clearly visible rack, almost to the ceiling, with the latest range forming the centre piece of the open plan offices.

As I waited with anticipation to meet the woman I had heard so much about, I was greeted by the familiar clanging sound of running rails being carried from the offices through the reception.  Yup this is a retailer!
Tania Austin, CEO, greeted me at reception and you’d have been forgiven for thinking you’d just walked into  a shoot for Vogue or Harpers. A stylish woman dressed, not just immaculately but (to my surprise) head to toe in her own Decjuba designs.

Tania Austin was half of the superpower behind the Cotton on Group which includes Cotton On, Cotton On Kids, Cotton On body, Rubi shoes and Typo. Together with her then-husband, Tania and Nigel grew a humble yet creative retail concept into a retail giant in multiple countries.
While speaking to Tania I expected some amazing pearls of wisdom as to how they grew a small business into a global force and the very unassuming Tania, whilst full of great advice, always brought it back to one thing:  back to basics.

There are thousands of reasons Tania and Nigel made a success of the Cotton on Brands but Tania stressed that the ability to keep your eyes wide open and always see all areas of the business coupled with listening to your people was a huge factor in their success. She also said that as the business grew it was critical not to let the numbers scare her; they took calculated risks and didn’t always play it safe.
After separating from Nigel, Tania made the tough decision to leave the business also and immediately knew she needed to find a new challenge as she had never not worked.  Having worked in the value-for-money space, Tania wanted to try her hand in a different style of retail where she could have more flexibility to play with design and fabrics and at the same time create an image. Tania identified the need for a brand that worked for the youth market and yet showed a maturing woman she didn’t need to stop being fashionable. In short she wanted to create a brand that made women feel great.

When Tania began considering her options she was approached to look at the Decjuba brand. Although the brand was a little lost in the market, Tania knew immediately this was the next step for her. Tania loved the platform and thought it was something she could build on and besides, she loved the name.

Decjuba was founded in 2003 by Kookai owner Rob Cromb, who sold the brand a short while later to focus on his core brand. At that point Decjuba began to face an identity crisis. Trying to be many different things the brand dabbled in men’s and women’s designs as well as accessories, leaving consumers confused as to what it was. By 2008  just as many thought the brand was no longer in existence, Tania stepped in.
Taking over six Australian and two New Zealand stores Tania made it a point to not make radical changes, preferring to assess and understand the brand. Working closely with the people in the company paid off as and most of the original team are still in place and have been an integral part of the growth.

Tania oversees all elements of design personally and is focused on keeping it simple, but just how does one go about reinventing an entire brand? The first answer from Tania was to have a considered approach which is not always tangible.
“Sometimes you just have to feel it” Austin says - a talent no doubt gained while completing her psychology degree.

Once you have developed a brand strategy you have to keep everything on brand, rather than trying to be everything to everyone.
“Versatility was the other thing Austin targeted but a good fit is essential and will effectively become the cornerstone for your brand.  Customers want to be able to wear an outfit to the office and then throw a jacket on and head out to dinner; we have a core range of basics that can be dressed up or down depending on the occasion. Even when I go to pick up the kids I can dress down accordingly,” Tania says, although your average soccer mom she isn’t.

As savvy with her commercial skills as she is, Tania knew the key to pulling all of her ideas into a winning brand was to leverage her fashion sense and to get margin on her side. The first step was to change the sourcing model from using agents in Hong Kong to becoming vertical retailer and sourcing direct from China. This not only improved margin it also gave a greater handle on product quality and speed to market a combination which is critical in today’s retail market.
The most remarkable thing about Tania is that she doesn’t seem to have a particular strength she focuses on. Rather she owns all areas of the business. She is as comfortable talking about her finances as she is her design. If there was one area that seemed to light she up it was her people. Tania says she believes people want to do the right thing and if you give them direction and freedom they will always surprise you. Speaking first hand with some of her people Tania walks the walk with her team and they have enormous respect for her. Each week all department heads meet on location at a store and review all areas of the business; this assures complete buy in to the bigger picture and departments work together for the greater good. 

Decjuba has a clear brand strategy and doesn’t do anything for the sake of it. You will find them on Facebook with over 12,000 followers and on Pinterest where you will be delighted with the amazing trends. All on brand, it’s clear that it’s a well thought out strategy.
So what’s next for this brand? The sky is the limit now; and with 23 stores and around seven  more opening next year, I am convinced Decjuba will soon be considered a leader in Australian fashion. Tania’s respect for what she calls her savvy customer will ensure the quality is maintained whilst the value-for-money and versatile ranges continue to delight. The online store will continue to grow and compliment the bricks and mortar sites.

The brand will foster its owner’s mantra of bravery and courage and will continue to push the boundaries.
Tania says she believes in acting with certainty and will be action focused to grow her brand.

“I don’t believe in failure,” says Tania.
Trust me: this is one lady that will not fail 

-John Caldwell

Sunday, 4 November 2012

Teleporting to Retail in 2020

The last 10 years we have seen drastic changes to the retail environment and no doubt the next 10 will be just as ground breaking with the many exciting, emerging technology trends and advancements.

It is clear to see consumer trends have changed in recent years. Research shows that two thirds of shoppers changed their shopping behaviour during recent years. Spending started to slow down as people who used to make shopping lists now buy something because they have an email coupon or because a retailer has fast checkout lines. Scoopon in Australia and Grabone in NZ are two companies which have seen great success in online sales.

In the new multichannel reality the boundaries between virtual and physical space are becoming blurred and retailers and being forced to question the function of stores. By 2020 non-store retail is expected to represent around 12% of the overall retail space with one third of retail growth coming from online sales.

Disappearing checkouts, shrinking stores and hovering holograms with product information will be a thing of the future. Consumer electronic devices have evolved from occasional use devise to highly embedded tools in our everyday lives. According to the 2011 Nielsen report approx. 46% of all mobile users own a smart phone.

Pop up nation

Moving closer to 2020 we are likely to see more and more “pop-up shops”.  A generation ago, supermarkets “popped” into fuller service environments with flower shops, coffee shops and wine sellers. Department stores added experiential areas and services, make-up counters began to offer more makeovers and demonstrations.  This type of retail occupies a location for a short time and is promotional and creates hype, coolness factor and a sense of urgency or intrigue.

After the Christchurch earth quakes of 2010 & 2011 the city has created a “popup city” as they wait to rebuild the city, with a hub of restaurants, cafes, bars and retail popping up all over the show. Over in the UK BoxPark Shoreditch is a retail innovation. The worlds first pop up mall, based in the heart of east London. No doubt we will see more and more of these types of stores in the next five to eight years.

Drive though supermarkets

In August this year Woolworths launched Australia’s first drive through supermarket at Warringah Mall in Sydney, allowing customers to collect their shopping without having to get out of their car.  The idea was pioneered by French food retailer Auchan in 2006. Tesco and Waitrose are also testing the model in England.

Virtual supermarkets

In South Korea, Tesco created a virtual store in the subway where commuters can order their groceries from a virtual wall. As consumers will shop more often retailers need to capitalize on impulse needs with people picking up goods on a daily basis instead of weekly stock ups.

Online pick ups

Online retailers will partner up with non competitive retailers for places where customers can pick up their merchandise. Amazon have already started doing this when a customer purchases an item on Amazon, they can opt to have the item delivered to a locker where upon delivery they'll receive a email with a code that opens the locker.

Innovation in fashion

Burberry hosted a holographic fashion show in Beijing last year. Dozens of models walked across the catwalk where real-time video and generative computer graphics interacted with the models’ movements and clothes, resulting in a hybrid spectacle where the physical and the virtual could hardly be distinguished. 

Where to from here?

Speed and convenience are two of the underlying factors affecting our retail environment and going forward innovation and social media (omni\-channel) retailing will be the major players in the retail environment. The movers and shakers of the retail market are shown in the Market Evolution Model below. It categorises each country according to their Retail Development Stage. Going ahead you can see that the US is yet to reach the post modern stage that Germany and the UK are at. India is miles behind everyone else, however, after allowing 100% FDI in the retail market this year we are likely to see them move into the exploration stage soon.

One of the growing challenges will be to engage consumers so that they don’t feel like they are a victim of mass marketing. While innovation is great, service and bricks and mortar will ultimately be the differentiation factor for retailers. 

Monday, 22 October 2012

India Bursts Open Its Gates to Foreign Retailers

India has opened its doors to allow 100% foreign ownership of single brand retail stores. It’s a big move for Asia’s third largest economy with one billion inhabitants and a retail market forecast to double to $850 billion by 2020. 

This move will allow global retailers to operate without an Indian partner. Rajan Bharti Mittal, vice-chairman and managing director of Bharti Enterprises one of the countries largest retailers says that “increased investments by foreign single brand retailers will not only help improve consumer choices but also enhance competitiveness of Indian enterprises through access to global designers, technologies and management policies.”

The move will also benefit India’s small producers as any global retailers will be required to source at least 30 % of their products from small and cottage industries. However opponents fear the move would undermine small traders and farmers and destroy jobs and businesses.

Although this move does appear to be a step in the right direction, there are quite a few restrictions which could trip up a few retailers.

  • States can choose whether to participate in this or not, only about 1/3rd have chosen to go ahead with it.
  •    Retail outlets can only be opened in cities that have a population of 1 million or more. Only 53 cities meet this criteria accounting for only 12% of the Indian population.
  •  Foreign investors should invest a minimum of US$100 million into the venture and 50% should be invested in back end infrastructure.

No wonder the Indian government has insisted on investment into back end infrastructure; the country currently loses roughly 40% of its fresh produce because of infrastructure issues like lack of refrigerated trucks and temperature controlled warehouses. Inter state border transit delays and doggie power grids don’t help either.

In order for overseas retailers to be successful they should take a look at China and what has happened to their neighbours in the past few decades. Tesco, an American owned supermarket chain, and Carrefour, a French supermarket chain, have both had very different outcomes.

Tesco entered the market about seven years ago and is only just breaking even. Carrefour, who entered the Chinese market in 1995-2000, had officially overtaken local Chinese retailers in sales of “fast moving consumer goods” by 2005. Carrefour currently has over 163 Carrefours throughout China.

The reason why Carrefours have been more successful than Tesco is because they adapted more to the Chinese tastes and shopping preferences. They introduced larger aisles and “wet markets” where live animals are sold within the supermarkets.

I think that overall this will be a risky, but a beneficial move for foreign investors if they get it right. Hopefully it will create millions of jobs ( not only in retail but in the IT and Property sectors), help check inflation and modernise the agriculture and transport sector. Watch this space!

Tuesday, 2 October 2012

Perfecting the Art of 'Flagship'

Successful retail is not just about the product that you sell. It’s about the way you sell it.

As the world of innovation continues to expand, the online space is snowballing with new developments, products, platforms and operating systems that all call for something customized. Smart retailers are still realizing the potential of brick and mortar stores – and not only that, they’re embracing it as part of their omni-channel strategy.

Originally a term heralded by the lead ship in a fleet of vessels, flagship has become synonymous with retail.

While the phrase is usually limited to the largest retail store in a chain, providing the largest range of product, it’s also about the offering. Whether they offer the biggest selection, or the smallest, but most prestigious line within the brand, it works either way.

The Flagship store gives retailers the opportunity to promote the absolute epitome of their retail offering.  Oozing with brand personality and showcasing the best in their shopping experience with the finest array of stock, world class merchandising, additional services and a sleek design.
It’s an impressive contest worldwide to be the best of the best.

Size Matters
Whether the store footprint is a 50 square metres, or 500 square metres; optimizing the space is essential. 
High ceilings, oversized chandeliers, empty spaces, oversized merchandising, spacious layout, shiny, bright and eyecatching.
Or dinky and quirky, promoting the smallest, most high end range with a minimalistic approach to the design (albeit, very strategic, original and creative).

Nike flagship store in Chicago

New Zealand’s well known female fashion brand Glassons has created led a spring theme throughout their Newmarket flagship store.
Burberry store in Regent Store
Sleek Design
The competition in the technology sector continues to heat up. Apple and Samsung are going head to head to compete for the smart phone market and this is leading to stores that are trying to outplay, or perhaps match, the competition. 

This impressive design is from the Apple Store in the Netherlands.

The Pop-up Store
Creating excitement around temporary retail sites is an ever increasing trend. Not only is it an attractive idea for those looking to hold off on signing long term leases, but it also gives the opportunity to create hype around new products, or trial a new service idea.
As social media continues to grow in strength as an advertising tool – word of mouth can grow exponentially, often enhanced by guerilla style marketing.
Pop-up stores can range in length of time – from a couple of weeks to a year.

The Swiss Luxury watch maker, Hublot, ran a pop up store during the Singapore Grand Prix - for a total of 10 days.

Ksubi pop-up store

H&M ‘Beach’ pop up store

After the devastating earthquakes in Christchurch, New Zealand retail took pop-up to a whole new level with the creation of the temporary ‘Container Mall.’ This concept utalises shipping containers where retailers have created their individual pop-up style stores.

It used to be about the size of the store and the quantity of products available. Now we look for the whole package; it’s all about the experience. From service and product range through to integration, technology, design and WOW factor. Global brand are spending up large to perfect the art of flagship.  

Thursday, 13 September 2012

Australian's living in the lap of luxury

Bond Street, London. Rodeo Drive, LA. Fifth Avenue, New York. Champs-Elysees, Paris. All of these places are synonymous with luxury.

 Now, lets add Collins Street, Melbourne and Pitt Street, Sydney to that list.

The luxury market in Australia is taking off and is bucking the global economic  trends in retail sales. Discretionary spending has certainly tightened up particularly in the apparel sector and even some of the food retailers are feeling the pinch with flat or declining sales. Supermarket and large format discount department store sales are up as people look to cut back on their non essential purchases and have been doing this since the impact of the GFC. For over two years now consumers have been cutting back and have chosen to forgo those items and experiences that were an everyday occurrence prior to the GFC. Well the growth in the Luxury and premium retail sector indicates that consumers have had enough of their frugal behaviour of the past couple of years and are now deciding to treat themselves with both the premium and luxury sector experiencing the full benefit of this, whether its Nespresso with their top of the line domestic espresso machines and coffee products or the gourmet food retailers like Lindt in the premium sector.

In tough times people will forgo the mid market treats and when they treat themselves, they will go all out. Whether it’s a gourmet cup of coffee at the lower end or Gucci or Prada handbag at the top end of the market, and it’s not just the wealthy that are having these luxurious shopping experiences, in tough times everyone wants an experience, something that will make them feel good, and something aspirational.
The Luxury sector is experiencing a boom as all demographics strive to treat themselves, when someone buys a luxury item like a $1500 handbag they can justify it as a special “investment piece” , something classic and timeless, it’s a purchase that makes them feel special.

This focus on treating yourself has resulted in strong demand and performance of luxury retailers in Australia and the recent redevelopment and opening of Westfield’s Pitt Street Mall has attracted multi-level luxury flagship stores. the entry of new Luxury brands and the growth of the existing luxury brands and all of these stores are ranking well on an international level, which is luring even more of the prestige brands to our shores.

The 2012 Retail Salary Survey Results revealed a 15% increase in salaries in the luxury space over the past 12 months. This exclusive salary offering, highlights the growth in the sector as new brands enter the market or grow their existing presence and their demand for the best candidates to staff their stores and provide their clientele with the total luxury experience.

Luxury Store Managers salary base is second only to the large format sector; with most in the $70k - $80k bracket. Whilst the mid market  fashion sector is only offering their managers salaries between $41k - $50k, it is a significant difference. Many of the candidates being targeted are doing the same thing as the customers of these luxury or premium brands, that is they are looking for something aspirational, a business and brand that will make them feel special too.

Today it’s Collins street in Melbourne and Pitt Street in Sydney, in years gone by some luxury retailers would have been aghast at the thought of being positioned in a shopping centre environment but the success of these retailers has demonstrated that luxury is no more just the domain of the rich and famous and there’s a luxury retailer coming to a location near you.

Sunday, 15 July 2012

Retail salaries on the rise

There’s no denying that the current economic conditions, both locally and internationally, have affected the Retail industry.

Firstly the infamous Carbon Tax and then Fair Work Australia's (FWA) announcement of a 2.9% hourly rate increase. To top it off, the results of the 2012 Retail Salary Survey have shown an overall increase in salary brackets across the retail market.

But the news is not all grim, as Retailers develop new strategies to enhance their employment brand and create packages to entice top talent.

Taken from 2,943 data points, the Retailworld Resourcing salary survey has given insight into the retail labour market.

An average of a 5% increase in salaries has been seen nationally since 2011, with the main surge seen in store management positions in the luxury and large format sectors.

Middle management support office roles have taken the biggest hit with the largest number of redundancies due to restructuring.

On a state-by-state basis WA and QLD has seen the biggest salary growth, mainly due to the mining boom injecting cash into the local market and strong demand for the best talent.

Retailworld CEO John Caldwell commented that “as retail sales in most sectors remain steady to say the least, salary increases have remained fairly conservative; which is in line with expectations.”

“However, retailers are becoming more savvy with their total remuneration offer – offering more attractive rostering options, product discounts and performance based incentives  and a focus on career development and offering employees more responsibilities in their roles.”

“With the War for Talent, We’re also seeing an increase in counter-offers as employers attempt to retain high performers.”

Although retailers are continuing to be knocked about  with expenses, the increase in salaries despite the state of the economy, is a positive sign for the industry as retail develops it’s perception as a career of choice.

Tuesday, 19 June 2012

So, how much are we really paying?

Where does it stop? On the back of Fair Work Australia's (FWA) announcement of the 2.9% hourly rate increase to come into effect as of July 1, 2012, the infamous Carbon Tax will also be introduced, and retailers are bracing for it. It’s hard to pin point an exact number that will be drawn from businesses back pockets; but it’s plain to see that retail will notice a difference.

Looking at the bigger picture, there’s two ways that retailers will be affected:

  1. Directly – through an increase in running costs (electricity and staff labour costs)
  2. Indirectly – through supplier increases

As a global industry, it’s almost impossible for a retailer to run a one-stop shop; where they create and sell all goods in the same place without any third party suppliers or distribution chains. That’s why the industry, along with the likes of hospitality, can expect to feel the main brunt of these newly imposed costs.

I’m all for employees getting fair wage increases, the issue is the timing and forethought of our politicians in imposing these increases at the same time. This all comes on the back of continued price increases in the cost of operating businesses, something that could have been marginally offset have the federal government honored their commitment to lower company tax to 29%, but alas another broken promise, and who pays, the business owner, the employee and the Australian public.

There are reports of shopping centre giant, Westfield putting a clause into rental agreements in order to onset the cost extra cost to retailers, while being disputed by Julia Gillard, it is  not being denied by Australia’s leading shopping mall business.

Passing the cost to consumers is not an option for retailers as they are still fiercely discounting, reducing costs and managing their margins to ensure that they can keep the doors open and turn a profit – so even a small increase in product cost won’t get a second thought.

In the meantime, new fit outs can prepare by buying energy efficient appliances and fittings while existing locations can introduce procedures that ensure power and waste cutting measurements are put in place.

I’m not saying that the Carbon Tax is a bad idea. Given future planning and the importance of sustainability, it’s inevitable that such a cost will need to implemented globally. But as a significant portion of retailers struggle to keep their doors open, it’s just another slap in the face.

Let’s hope that the consumer is not taken advantage of with the implementation of the carbon tax, last week we were hearing of electricity cost increases of up to 20% due in part to the carbon tax and in part to the rising costs of generating power. Unfortunately we can’t go without electricity and they can charge whatever they like, unlike retailers already feeling the pinch of tight consumer sentiment. There’s no question that all the talk of a carbon tax and the likely impact could well stifle consumer confidence further and this will no doubt have a flow on affect in Retail – Where does it stop?

A few months in to the new tax we’ll have a better idea of the impact on bottom line. Watch this space.

- John Caldwell

Sunday, 17 June 2012

The War for Talent – Its not Blah Blah, it’s real!

If you’ve read any of my previous articles then you’ve heard me talk about “The War for Talent”. And as we know wars are not won in the short term, Wars are strategized, planned and staged over long periods of time. The ‘Art of War’ by Sun Tzu has been applied to many fields well outside of the military. Much of the text is about how to fight wars without actually having to do battle: it gives tips on how to outsmart one's opponent so that physical battle is not necessary. As such, it has found application as a training guide for many competitive endeavours that do not involve actual combat.

Part of winning the battle is doing your research and reacting to these findings, Seek is the dominant on-line job board and regularly undertakes extensive research to understand the market so that they can implement their own strategies against their competitors and from this have identified what the future holds and it aint pretty!

Seek have identified that by 2016/2020 the labour demand is expected to outweigh supply; particularly for Retail Managers. The graphs below show the AU labour market figures, along with the jobs that are expected to have excess and surplus candidates.

Although it may seem a long way off, the best businesses are planning today for what will happen tomorrow and in the years to come, smart retailers are developing strategies for attracting and retaining the best talent and it is this long term approach that will help our economy and business in the short term as it will stimulate the growth and consumer and business confidence we need to drive our economy forward.

- John Caldwell

*Graphs from

Thursday, 7 June 2012

D- Day for Business: July 1st

From a retailers perspective, the increase in minimum wage is not going to help anyone. Some retailers are struggling to remain afloat, so adding the extra burden of a wage increase, on the same day the country will be hit with carbon tax, is just another nail in the coffin for a lot a small businesses. And for those that receive the increase, will it even be substantial enough to cover the increased costs associated with the carbon tax or the impact that the scaremongering around this tax and subsequent impact on consumer confidence will have?

Fair Work Australia announced that minimum wage will increase to on 1st July to $15.51 (or $17.16 for apprentices).  What might seem a small amount to the feuding unions is a large expense to employers: those that are dealing with a large number of junior staff and those that are struggling to make ends meet as it is . This will lead to hours being cut, and new job opportunities hitting a brick wall.
The Australian Chamber of Commerce has said the rise should be limited to $9.40 a week to “reflect inflationary pressures” and that the decision for “increases ranges from $17.10 per week to $30.00, depending on the prevailing award, is a significant and costly impost.”

A recent survey run by Retailworld indicated that less than 45% of retailers are already considering a wage budget increase over the next 12 months.

So, what does that mean for retail?
  • Hiring freezes
  • New job opportunities put on hold
  • Current employees could lose hours (particularly those on casual contracts)
  • Product prices will rise to maintain margins that are already at a minimum
  • Ultimately small to medium businesses will find trading conditions even tougher and many may continue with their struggle to survive
July 1st - A ‘Double Whammy’ for business. It’s not going to be pretty.

Tuesday, 29 May 2012

Consumer confidence – Who the heck knows

I’m sitting on a plane reading the paper and thinking ‘does anyone know what's really going on in the economy?’ I’m reading the same paper and there are conflicting stories about the economy, interest rates and the direct impact that this has on consumer confidence and spending - which ultimately drives the economy.

The first story tells of the decline in advertisements for full time jobs and that Job advertising is down over 8% on the same period last year.

In recently announced figures retail spending was up 0.9% in March; this followed an increase of 0.3% in February on the back of growth in restaurants and cafe operations. The main decrease was seen in average food prices which dropped 0.9%,  the biggest drop in 30 years driven by competition between the two big supermarket chains.

In all of the stories they talk about current month and year to date stats but we all know that consumer confidence is driven by the press and is formed over a long period of time. The GFC hit in September 2009 and we have had three years of uncertainty and this doesn't turn around in 1 month or with 1 interest rate cut.

There is no question that consumers are happy with the recent RBA decision to cut interest rates but when the banks do not pass on the Interest rate cuts - what does this say to consumers?

Page 3 Contradictions
Back to the newspaper, three pages in, another commentator says we can expect a further .75% drop in interest rates by end of 2012, the other article says the 1 month increase in retail sales of only 2% will prevent any further reductions. I don’t know about you but I find this very confusing. It’s obvious that these commentators don't know what's going on, so what hope has the business world or consumer.

It’s the business world and consumers that are driving our economy and these types of mixed messages are confusing and are perpetuating the problem with both business and consumer confidence.

Looking to the future.
I recently met with 2 large national retailers who also mentioned that it is the most unstable economic times they have seen for many years and planning for the year ahead is almost an impossible task.

What will the future hold ? Who knows? Not the government. Not business owners and certainly not the media. I say we just get on with it!

Wednesday, 23 May 2012

Staff Turnover Survey

Recruitment fees always seem to come under fire and I often can’t understand this. The more I look at it, the more it is clear that this is just short sighted thinking. It is obvious to see recruitment costs because they are on a line in the P&L and stand out like dogs bollocks.

The flip side however is the cost of staff turnover, which by all accounts costs far more than basic recruitment fees so why does this go unnoticed ? Simple because it is not a line item in a P&L and the cost simply gets absorbed. Is this right ? No it is a short term approach to things.

To this end we wanted to gain some insights and help educate our clients as to the real issues at hand and the potential for even greater staff turnover and what they can do to reduce this .

In order to help with benchmarking results, Retailworld distributed a Staff Turnover Survey (STS) to the Australian Retail Market.

An unsurprising 44.4% of respondents have noticed a change in their staff turnover rate over the past 12 months. With murmurings of a double dip recession, an increase in minimum wage and consumers gripping their purse strings, successful retailers are implementing strategies to maintain top talent within their business.

The STS found that retailers had seen around 37% of their employees leave the business within the past 12 months.

A reasonably high turnover rate is expected given the part time & student nature that makes up majority of retail businesses, so it’s promising to see that Store Manager turnover was reported at a lower 26.2%.

As the war for talent becomes more competitive, businesses are realizing the value of people and around 45% are actually looking to increase their wage budget in the upcoming 12 months – a move that is aligned with restructuring to create and secure teams of top talent.

Although these results are realistic our counterparts across the Tasman are only reporting overall turnover of 31.4% with Store Managers at 14.6%. If you’re looking for advice on your staffing strategies for the year ahead send me a message.

- John Caldwell

Stats at a glance:
  • 37% - average staff turnover percentage in the Australian retail industry
  • 26.2% - average Store Manager turnover in the Australian retail industry
  • Lowest staff turnover = Recreation & Leisure sector
  • Highest staff turnover  = Jewellery and Fashion sectors
  • 56% of respondents had noticed no change in staff turnover rates in the last 12 months
  • 35.4% of businesses plan to hire new staff above their turnover rate in the next 12 months
  • 44.4% of respondents have had a wage budget increase in the last 12 months while
  • 66.7% of respondents have plans to hire new staff (across the business) over and above their turnover rate in the next 12 months
  • The lowest staff turnover rate recorded in the survey was 20%
  • The highest staff turnover rate recorded in the survey was 60%

Wednesday, 16 May 2012

Lessons Learnt from Yahoo

After four months in the business, Yahoo’s CEO Scott Thompson was uncovered as having falsely declared a computer science degree on his resume. Week after the discover Yahoo’s board of directors made the decision to fire Thompson and even look to drive out some of it’s own. The future of the business is uncertain and it’s leaving investor’s wondering how it will effect their potential earnings.

The problems from the allegation grew due to the opinion of top-level executives on his overall strategy. When the discovery was made, Thompson proceeded to blame a head hunting firm for altering his resume – which was probably his ultimate demise as they were able to prove otherwise.

To think that a global giant like Yahoo can miss something like this highlights the need for all businesses big and small to sharpen up their checking processes when hiring new talent and before opening the doors of their business to outsiders.

As a recruitment provider we see hundreds of resumes everyday and thousands of potential candidates each year which gives a bit of a 3rd sense; but that doesn’t mean we drop our processes, in fact, it makes us more aware.

Saying you have a degree that you don’t is not as bad as conveniently forgetting to tell someone you’ve been convicted as an Axe Murder, but it still shows a lot about the person’s character and highlights how far one sentence of lies can go.

Avoiding “Resumegate” in your business:
  • Have a compulsory application form with a clear disclaimer about true and honest information
  • Ask interviewees to bring supporting material with them– certificates, degree, passports etc
  • Ask questions. If you feel that something’s not quite right – make sure you get to the bottom of it
  • If it’s practical, test them (particularly if they need to do something like computer programming)
  • Check LinkedIn to make sure their profile matches their Resume
  • Always carry out at least 2 reference checks with questions prepared in advance. One reference is the most recent employer (it’s a good idea to do a quick LinkedIn look up on the reference check too).

Sunday, 22 April 2012

Are Gen Y now more stable than Gen X ?

After years of hearing how Gen Y are so transient and hard to please it seems the trend is changing and it is in fact Gen X who are getting itchy feet. In a recent survey by Kelly Global Workforce Index (KGWI), which polled nearly 170,000 people across all generations in 30 countries we saw around 66% of the global workforce intend to search for a new job next year, with Gen X workers being the most likely to quit.

The survey found only 44% of employees globally feel valued by their employer in these uncertain economic times. While many respondents expressed unhappiness in their current jobs, and are actively searching for new opportunities, others said they are content with their current employment position. However, those people are seeking greater engagement and meaning from their positions.

When evaluating potential employers, the results showed the most important factor job seekers consider is corporate reputation (58%) followed closely by location (52%). This resonates especially strong with skilled professional and technical employees.

Across the generational groups, the way individuals weigh their job choices varies as people age. Personal fulfillment or work-life balance is found to become progressively more important as people mature. But for Gen Y, the leading consideration is personal growth or advancement when choosing to accept one job over another.

Across all generations, personal fulfillment, work-life balance and personal growth both outweigh compensation and benefits when choosing one job over another.

Sunday, 15 April 2012

Sales without discounting – The solution is easier than you think

At 94.5 index point, consumer confidence is at its lowest rate since August, down 1.6; this has been reflected in retailer’s expectations,71% were expecting poor results over Easter weekend (Roy Morgan Research).
In the days leading up to the four-day weekend, it was clear that retailers were creating excitement with sales, deals and extended shopping hours. Judging by the crowds over the weekend, reports of an expected 5.3% increase on last year could be realistic.
Is constant ‘sales–mode’ successful? Is it really the fault of the penny pinching customer?
As Kmart managing Director  Guy Russo said recently, Kmart used to focus on its percentage margins, but I think if you focus on customers and not margins, you’ll end up with a better result.”
“Manipulating margins around to work out how your profit is going to be is really short-term, so my main focus with our team is focusing on delivering the lowest prices you can and delivering on high quality.”
“So I’m actually happier to run lower percentage margins than we’ve ever had in the past to get the customer the benefit of the lowest price, which means that your penny profits lower. However, the equation that I’m working on from a profitability point of view is if you’re best in price then volume will go up, and then you’ll make a lot more profit.”
Turning foot traffic into sales is the only way. And here’s how: hire the right team.
We’ve all heard about the war for talent, a phrase that was coined in 1997, today when I Google searched that heading over 80,000 results came up.
The war for talent is real and retailers need to start seeing that their team is their most valuable asset; globally; full stop. All of the marketing and promotions will only get you so far, I am certain that most retailers are missing the biggest opportunity for sales growth – PEOPLE!
The Marxist theory of war is quasi-economic in that it states that all modern wars are caused by competition for resources and markets between great (imperialist) powers. My view is that this war for talent is definitely a competition for resources but you don’t have to be the biggest or the greatest, even the little guys can win the war for talent.
A highly effective manager will increase conversion, grow store turnover, drive successful company promotions & campaigns, create positive word of mouth & brand awareness, create repeat long term customers and train their staff to do the same.
Wish these candidates grew on trees? So do we. And that’s why it’s important that you snap up top talent as soon as it comes to market. Finding people who embody the traits above is becoming harder as candidates become more scarce and yet employers seem to be moving slower than ever in snapping up the talent.   Effective Store Mangers are presented with multiple offers are able to be picky. Competition is fierce and employer branding is more important than ever. Look at the whole package and remember that these candidates are not looking at salary alone.
  1. Create a strong employment brand – look at the whole picture Progression, Culture, values and incentives. What does your brand represent for a team member not just a consumer
  2. Get in quick – effective candidates with a proven background aren’t on the market long, some being interviewed and hired the same day they apply.
  3. Appreciate that your team is your biggest asset and the quickest way to get profitable sales growth.
The art of war is like the art of the courtesan; indeed, they might be called sisters, since both are the slaves of desperation —Pietro Aretino
Don’t let it get to the point of desperation, adopt these three simple steps and you’re on the way to winning the war and an absence of war, is usually called peace.

- John Caldwell