Our retail blogger Kevin Moore is one of Australia’s best retail thinkers and yesterday he started the process of examining the Productivity Commission’s report into the retail sector.
The conclusion is worth repeating, as it sums up very nicely the malaise retail finds itself in.
“The simplest distillation of the work… is this: Should our political leaders, union leaders and business leaders not find a collaborative way to re-shape the way our shops are zoned, our retail staff are paid, and both are integrated into the online world, our cost of living will rise, creation of jobs in our huge retail industry will fall, and when the mining boom ends, we will have a recession not seen by this nation since the 1930s.”
As Moore says, this is a crucial time for retail. Everything seems to be against the sector – from online shopping to labour reform to the Australian dollar and a painfully slow global recovery – and it seems inevitable that Gerry Harvey’s prediction of a smaller sector will come true.
But while changes to zoning and labour laws could improve the plight of retailers, change in these areas will be slow – if it comes at all.
In the meantime, retailers must start the process of adjusting their own business models and trying new things to get shoppers spending again.
With this in mind, it’s great to see big shopping centre owners such as Westfield and AMP Capital Investors embracing mobile technology that will help further integrate online and offline shopping experiences.
The Westfield strategy involves a national rollout of Facebook’s Check In Deals program – shoppers “check in” to a mall and can access deals specific to stores in that centre.
AMP Capital Investors has gone down the route of a supporting an app developed by Australian group QuickerFeet. The app allows retailers to post a deal online and the details are then distributed to users based on their location – that is, if they are close to a retailer they will be told about the new deal.
Both strategies are an extension of the daily deals/group buying/coupon/local offers trends that have exploded in the last 18 months.
It’s amazing how localised these promotions are coming – what started as deals for the entire country or state have narrowed down to cities, regions, neighbourhoods and now specific shopping centres.
Both Westfield and AMP Capital Investors now have smart ways to offer quick, targeted deals to pre-qualified consumers (they are in shopping areas so presumably prepared to consider buying). Unlike widespread discounts, the short-lived nature of these deals also means they shouldn’t do too much long-term damage to margins.
Retailers have spent a good deal of time this year bemoaning how tough times are and I think we’ve all got sympathy for them.
But retailers need to keep striving for new marketing and selling strategies. Going to the shops remains a great Australian pastime – making it easier with technologies like this will help close the gap between offline and online retail.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
