Giftrap : Giftrap Nov Dec 2012
Giftrap | 17 Some of the world's biggest retail brands have already begun to hit our shores. What are you doing to compete and keep your customers? H&M, COSTCO, WILLIAMS SONOMA, TOPSHOP AND RIVER ISLAND all have one thing in common - they're big international brands with their eyes firmly set on expanding to Australia. Some of these global retailers are already experiencing remarkable opening sales, as the appetite for their brands and products are motivating even the most cautious shopper. According to the National Australia Bank Online Retail Sales Index, online shopping equated to $11.7 billion in the 12 months to July and 5.3% of total Australian retail spending for the period. The study also reported that 28% of these online sales went to offshore retailers. With these figures rapidly increasing, Australian retailers are being forced to compete with these global players, both in-store and online. The issue for me is not globalisation of retail per se -- this is as inevitable as night follows day. The world is getting smaller by the minute and technology is challenging how we run our businesses around the world and what our communities even look like. The issue for Australian retailers is how to compete in a differentiated manner, creating an even fitter business in the process. I am often asked how local retailers can compete and win back their share of business from overseas competitors. Each business is unique, however here are some of the guiding fitness principles: • Create a strategy for your business that provides an ultimate exit, or at least regular goals to progress towards. • Try not to carry too broad a range of products relative to your marketplace offer. • Consider what you are truly good at. Look at your local and international competitors closely and distinguish your strengths and weaknesses in comparison. • Create a differentiated story. Offer something unique, typically around service, product range, heritage or speed of supply. • Create a solid database. The world is moving to micro marketing and a database with regular offers and updates is crucial to building loyalty. • Encourage and facilitate word of mouth. Over 80% of Australians have directly or indirectly utilised a social media site such as Facebook, Twitter or Pinterest, so the opportunity simply can't be ignored by retailers. It's time to boost your business in the face of big brands coming to our shores, not run away in fear. There are many great challenges and opportunities that await us. ••• OPINION Your say We ask AGHA wholesalers and retailers how they feel about major overseas retailers competing with local businesses. "Retail is not a zero sum game. These big brands create a larger overall market, introduce some excitement back into retail and potentially reverse or slow down the trend to online buying offshore." Kenay Edelston, Melbourne and Sydney Wedding Registries "The desire for 'market share' by these brands is the dumbing down of consumers' expectations, vision and intelligence. It also involves extracting maximum amounts of money from them, while minimising what is paid for the making and delivering of the items. The sad part is that few consumers ever stop to think." Mervyn Langford, Dobbin and Drum Toys "We need more competition from vertical operators such as Topshop and H&M like we need a hole in the head. The real issue is sadly the abhorrent cost of retail rents. These international stores are now the only operators that can afford the out-of-touch rents that landlords are milking for high-profile shopping locations. If our independent retailers had realistic access to these areas, the Australian consumer would be far better off." Albert Drumm, A Touch of Europe Retail expert Brian Walker is the founder and managing director of the Retail Doctor Group. These global retailers opening on our shores are already experiencing remarkable opening sales as the appetite for their brands and products are motivating even the most cautious shopper. Innovate or deteriorate? L L We'd love to hear from you. Log onto our Facebook page and let us know what you think.
Giftrap Jan Feb 2013