WHY SHOPPING’S OUT OF FAVOUR
Bricks-and-mortar retail stores are moving away from traditional ways of doing business.
Today (August 4) Myer announces that it plans to abolish shipping and handling costs for its website.
It’s just one part of a strategy to stop the exodus of customers to internet shopping, which has exploded in the past year as Australians chase bargains overseas with their muscled-up Australian dollars.
Myer boss Bernie Brookes said the switch to free shipping in Australia should boost the group’s online turnover without damaging profitability.
”We do about $5 million a year online. The plan is to increase that closer to $50 million a year very quickly,” he said.
Myer’s upmarket rival, David Jones, is also reconsidering its online offering.
At present DJs is charging $4.95 shipping for gift cards and $9 for other packages, but is reviewing this.
As part of David Jones’s 2013-16 strategic planning, the department store is also looking at a range of technology and online initiatives including pricing, placing more products online and greater use of iPhone applications.
The Hoopla asked commentator DIANA SIMMONDS what’s sending her shopping business online:
“There’s no other store like David Jones” – yes, well, unfortunately those who most devoutly believed that jingle were executives of the DJs brand themselves; and thus were unable or unwilling to escape that straitjacket image.
Result: splat, clunk, ouch as the great department store’s profits failed to negotiate the changing landscape of modern retail.
And now DJs’ former CEO, Mark McInnes, as the current boss of Premier Retail, has announced the closure of up to 50 of his under-performing stores; among them brands such as Just Jeans, Jay Jays, Portmans, Jacqui E, Peter Alexander, Dotti and Smiggle.
According to – take your pick – current marketing waffle or Gerry Harvey, the reason for this tragic slump in profits is our treacherous love affair with international online shopping. That is, instead of supporting local shops, we’re increasingly letting our fingers do the walking. Wonder why?
According to less rabid It’s-All-Your-Faulters than Gerry, the reason is that retail is the whipping person for the Reserve Bank’s determination to keep interest rates high so they can contain inflation. This is because we (consumers) are spending less and saving more. Does this sound about right? No, didn’t think so.
What’s really happened is that after decades of being fleeced by retailers – especially those flogging clothes, shoes, books, computers and cosmetics – Australians have finally got wise to the excessive profit margins and are taking their credit cards elsewhere. More than that, when it comes to clothing in particular, Australians are at long last wising up to the quality gap.
Take one Lucy Chrissonopoulos whose comments appeared recently in the Sydney Morning Herald. She’s a 20-year-old whose custom is craved by brands such as Dotti, Portmans, Just Jeans and Jay Jays. “My idea of those stores is that they’re a little bit cheaper because they have such a quick turnover of styles… but I now think it’s a little bit overpriced for what it is,” she said.
And “what it is” is cheap tat: poor quality fabric, skimpy cut, uncertain seams, hems and sizing, lousy manufacture and – more often than not – a garment that looks like a dish rag after a few wears. That was okay when they didn’t cost much more than a dish rag: easy come, easy go. But that’s no longer the case.
“The prices seem to creep up quicker than they should, so I don’t shop there as much any more,” Chrissonopoulos said, going on to say that a week ago she’d made her first online purchase and will do more of it in future.
Premier Retail’s thinking is that naughty shoppers’ sluggish behaviour in July (traditionally a lively retail period apparently) has caused poor sales and hastened imminent closures; but it goes deeper than that and the conglomerate is in for more pain if truths aren’t faced up to.
Aside from lousy quality and high prices, shopping isn’t fun and it’s all about service. Venture into a store and chances are you’ll be ignored or jumped on by a surly ignoramus. Go online, however, and it’s a different story.
Browse an American online store for instance, and if you seem to be wandering the digital aisles looking bewildered, a conversation box will pop up and you’ll be asked “Hi, may I help you?” And guess what? The unknown, unseen person means it! They know the stock, ask apposite questions and invariably sell you something.
Again, if you’re buying American online, you can be sure the quality and finish will be terrific, packaging and delivery second to none; the clothes will fit and if not – send ‘em back no problem and they’ll sort it for you.
If it’s good enough for Michelle Obama it’s good enough for me. What’s not to like?
But Australia’s big retailers still don’t get it.
PricewaterhouseCoopers’ global retail and consumer advisory leader, Stuart Harker, says that if the $6bn in overseas online shopping were spent instead in Australia, local retail sales would be pushed up by 4.5% instead of the 2% forecast.
You don’t get it Stuart: we’re shopping online, not because we’re disloyal Australians, but because some Australian retailers are gouging their customers and these days we know it and we’re not going to take it any more. Another statistic that makes retailers’ tears look awfully crocodile-ish, however, is that online sales account for only 5.5% of total retail sales – and that includes purchases from Aussie online sites!
What it all really amounts to is that Australian retailers have to look hard at their quality and pricing and also at how they perform in the global marketplace. That’s because Australian consumers can – and do – exactly that and we’re not impressed.
So stop moaning, stop threatening and pull your socks up. (BTW: I recommend mrsock.com.au for quality socks that are – gasp – made in Australia.)”
*Diana Simmonds is one of Sydney’s best-known and most respected arts critics and commentators. She started writing critically and professionally in London, in the dark ages, on Time Out and City Limits magazines; in Australia, since 1985 she has written for the Sydney Morning Herald, The Bulletin, The Australian and the Sunday Telegraph. Diana is the author of a number of books of fiction and non-fiction but the elusive bestseller remains elusive.
For further reading:
“Retail isn’t in a death rattle just yet”, Sydney Morning Herald
“Zara’s Australian entrance to challenge local retailers”, The Conversation