It’s been a couple of weeks of optimism in the world of retail both here and in the US as a result of strong sales figures. A major US department store, Neiman Marcus, a favourite among the wives on reality TV show Big Rich Texas, was sold for a near $US1 billion profit by private equity.
In Australia, our incoming Treasurer Joe Hockey told Australian shoppers that: “You can go forward and spend your hearts out because we’re going to have a good Christmas.” On top of that, Harvey Norman booked better than expected profit numbers, Myer bought out the balance of shares in fashion label Sass & Bide, JB HiFi shares touched $20, and Dick Smith has fast risen to become a golden phoenix valued at more than $600 million.
All great news, and a harbinger of better times ahead for all of us. However, I was in Hawaii while all this was happening, walking through a new DFS Galleria outlet in the heart of Waikiki.
Many readers will know DFS from airports and downtown duty free malls in many major cities around the world. Historically, the downtown malls were focused on high spending Japanese tourists, feeding their four-decade-long love affair with global luxury brands. Cartier, Mont Blanc, Hermes and Coach, plus the new shining stars like Michael Kors and very, very high-end Swarovski sculptures.
Well, while that used to be the case, there is now a very large proportion of shoppers speaking Cantonese and Mandarin in these malls. Also evident is a clever blend of high-value products mixed with high-value experiences in the shape of timeshare investments. It was also great to see ‘gamification’, with shoppers interacting with games on large touch screens to introduce them to Hilton’s timeshare developments in Hawaii and around Asia.
I couldn’t help but think, however, that both Hawaii and our Australian east coast cities are around an eight to 10 hour flight away from Shanghai and Tokyo. But the night and day shopping I was experiencing in Waikiki, with checkout tills ringing – well, more the sound of gold and platinum plastic sliding through EFTPOS terminals – was far greater than I had seen or heard in Cairns, Brisbane, Sydney or Melbourne. By way of example I saw one table in the middle of the ground floor, with two exhausted Chinese male shoppers unable to see each other over the stack of luxury branded bags and boxes they had volunteered to guard. Now Hawaii has a long history of Japanese being spoken locally, but it doesn’t have any natural head start on Australia for Chinese-speaking tourists.
And here’s what went through my mind. If the Asian Century is truly going to embrace Australia, then we will need to invest thought, time and energy to welcome Chinese, Japanese and all other Asian shoppers into our retail space. They should feel so welcome that they tell their friends and family that Australia is a better place to visit and shop than anywhere else. Dedicated duty free malls selling very high-value international luxury brands are great. These are the product of well thought out global retail strategies implemented locally.
This creates local jobs and a local, state and federal tax base. However, what would greatly assist smaller Australian retailers and manufacturers, with truly Australian artefacts and brands to sell, would be an innovative strategy shaped by federal, state and city government, with the tertiary education sector and retail developers to harness this opportunity.
Maybe our new Minister for Small Business Bruce Billson can assist. He, of all people, having run a small discretionary retailer, would understand the potential within small business owners. He may also be able to give life to that potential by bringing together key stakeholders to build that strategy.
CROSSMARK CEO Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores.
Kevin Moore is a retail expert and the chairman of Crossmark Asia Pacific Holdings and Now Comms Group. He is also an independent director of Australian fintech company InvestSMART.
