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Published 17 May 2012 05:01, Updated 17 May 2012 09:59
The 2012 BRW and AMP Capital Shopping Centres Retailer of the Year Awards prove there is life in retail.
It’s hard to escape the sense that retail is in the doldrums. Even a cursory glance of recent sales figures from Myer, David Jones or Harvey Norman makes it clear that consumers no longer spend with abandon.
This is reinforced by official data from the Australian Bureau of Statistics that shows retail spending rose just 0.9 per cent in March. There is unprecedented pressure on price, consumers are saving more than ever and technology is giving shoppers more freedom and choice about where and how they buy.
Undoubtedly retailers are facing some tough challenges but the BRW and AMP Capital Shopping Centres Retailer of the Year finalists and winner prove that some players – both old and new – are rising to the occasion. From a dynamic new business seeking to disrupt the market such as Sneaking Duck (New Retailer of the Year and Innovation in Retail) to traditional players such as The Body Shop (Multi Channel Retailer of the Year) , Woolworths (Sustainable Retailer of the Year), Bankwest (Successful Retail Marketing Campaign of the Year) and Dan Murphy’s(Outstanding Retailer of the Year) that continually execute on strategy, the winners demonstrate there is still life in retail. This year there was also a new award for Best Customer Experience, won by Aussie Farmers.
“This year’s finalists were diverse, with a mixture of emerging businesses and some really great traditional businesses that have embraced new strategies and ways to do business,” judge and retailer Lorna Jane Clarkson says. “As a retailer, it was a great opportunity to see what others are doing. It made me proud to be an Australian retailer.”
Fellow judge and founder of Retail OasisStephen Kulmar agrees the finalists were impressive. “They are all well-considered businesses with a clear value proposition with an increasing level of emphasis on the digital space,” Kulmar says. “The winners in all categories demonstrated an impressive level of quality thinking about detail. And retail is all about detail. Whether you pursue innovation, sustainability, price or digital, it’s about getting the details right.”
Newcomer and online purveyor of designer prescription eyeglasses, Sneaking Duck, exemplifies that precisely. “There is such clarity in their offering because they have identified white space being the availability of a market for them,” Kulmar says. “Most people who wear prescription glasses want them to look good but all the major players in the glasses space typically focus on price so few are focusing on a premium offer.”
Almost 9 million Australians wear prescription glasses, contributing to an industry worth nearly $1 billion a year, which Sneaking Duck’s founders hope to cash in on. They have been operating for only eight months but so far their sales, margin and growth look promising.
“Australian retail is just at that tipping point and so we felt it was the right moment to join the movement and live online retail,” Sneaking Duck chief executive and co-founder Mark Capps says. “The internet is a great leveller because we all have to compete with global competition.”
Thinking creatively and using technology effectively makes it easy to meet customer needs. “People asked us how they can try on frames at an online store and we now provide two solutions,” Capps says. “You can upload a photo and try them on virtually or we can courier five frames to your door for a free pre-purchase try-on.”
Kulmar says this type of innovative thinking will lead to success in the new world. “Retail has changed forever,” he says. “It is now a deflationary category, which was driven by improved supply chains and a shift in mindset towards saving and value.” The financial crisis and digital enablement accelerated both these trends and the result is a different playing field.
Clarkson, the founder of Lorna Jane, agrees that conditions are challenging. “The current retail climate is tough,” Clarkson says. “Things are likely to get more difficult for a while yet, so it’s important to know every aspect of your business and ensure it is flexible and adaptable.
“It has never been more important to know your market and offer customers the best experience possible. I believe the future of retail lies in the combination of instore and online; a successful business is one that is master of both.”
Fellow judge and retail consultant Beverley Chambers says the past is no longer an accurate compass for successful retailers. “It’s a different marketplace, so what worked in the past might not necessarily work in the future. It’s about thinking outside the box, turning things on their head and doing things differently.”
“Accepting ‘Oh, we’ve always done it this way’ and assuming it will work in future is no longer feasible,” Chambers says. “Retailers who rest on their laurels will suffer but those who are agile at adapting will ... succeed.”
The winner of outstanding retailer of the year, Dan Murphy’s , is testament to that theory. It has evolved from a family owned bottle shop into what Kulmar describes as the best retail business in Australia “by so far it’s a joke”.
“It is simply an outstanding business that compromises on nothing,” Kulmar says. “It is best in class worldwide for what it does.”
What can other retailers learn from Dan Murphy’s? “Be brave and go hard,” Kulmar says. “It is about identifying growth categories and ... how to outflank the competition.”