The arrival of Zara, H&M and now Uniqlo, is likely to be striking fear in the board rooms and strategic planning bunkers (I’m sure they have these) of our more traditional retailers, such as David Jones and Myer. But, once the hype dies down, will these new models of retail be sustainable or will they simply go the way of the big box department stores?
It’s clear not all of these brands are the same, and there are a few different business models in there, with Zara, Topshop and H&M being about fast fashion, while Uniqlo sees itself as having a broader market, and low price model.
That said, it’s not really the detailed elements of the different brands that is drawing consumers to their stores at the moment. The key to the excitement about these openings is simply the novelty of these brands being in Australia. Although, as far as Australian consumers are concerned, it shouldn’t be that way.
As more Australians travel the world, and as we travel the internet gathering more information about retail and fashion beyond our shores, we have an expectation that we should have the same access to products that the larger markets of the US and Europe have, whether it’s clothing, technology or entertainment.
The retail sector now needs to reconfigure its business model to emulate the digital economy. But like all things in business, it shouldn’t be about copying another sector, it will be about building in the expected value from the perspective of the consumer.
The benefits that customers gain from consuming a brand’s products should be at the centre of managerial strategy. The digital economy has lots of opportunities for smart executives and directors of these companies.
Whereas in the past, anyone who did an MBA was taught the key to management was planning, leading, organising, and controlling, the reality of the consumer economy is that managers now have to also listen (to their customers), anticipate (disruptive innovation), evaluate (everything you do), and learn (from customers, staff and competitors).
So although Gerry Harvey may think there is no future in internet retail (or maybe he does), it’s not the internet retail outlet that is going to determine how the future looks, but how we use our new access to knowledge, in all its different forms.
Paul Harrison is a senior lecturer at the Graduate School of Business at Deakin University.
This article was originally published at The Conversation. Read the original article
