The economic difficulties we are all faced with at the moment are not news to retailers for our industry is indeed the barometer of the economy. We have been predicting for some time the levers being pulled by so called ‘wise’ economists, bankers and politicians should be tempered and allow the market to correct itself. Unfortunately to our chagrin the Reserve
Bank ignored our dire predictions in November 2007 that their heavy handedness would severely impact the retail sector. We were certainly no ‘Henny Penny’ when we made this forecast and unfortunately we have been proven correct.
Retailing has struggled this year due a collapse in consumer confidence and the subsequent reduction in demand. While pockets of retailing improved due to the increasing value of the dollar, the advent of the Olympic Games and a surge in stay at home Australians, most retailers will admit trade is a bit of a struggle at the moment.
We know it’s bad when one well-known retailer claims bad times are a figment of our imagination in April and then predicts in October that 100 retailers will collapse before the end of the year. This reactionary and somewhat dangerous pronouncement confirms that a few ‘Henny Pennys’ even exist among our own.
The fact is that retailers know it is a tight market at the moment. We also know that the Australian
The economic difficulties we are all faced with at the moment are not news to retailers for our industry is indeed the barometer of the economy. We have been predicting for some time the levers being pulled by so called ‘wise’ economists, bankers and politicians should be tempered and allow the market to correct itself. Unfortunately to our chagrin the Reserve
Bank ignored our dire predictions in November 2007 that their heavy handedness would severely impact the retail sector. We were certainly no ‘Henny Penny’ when we made this forecast and unfortunately we have been proven correct.
Retailing has struggled this year due a collapse in consumer confidence and the subsequent reduction in demand. While pockets of retailing improved due to the increasing value of the dollar, the advent of the Olympic Games and a surge in stay at home Australians, most retailers will admit trade is a bit of a struggle at the moment.
We know it’s bad when one well-known retailer claims bad times are a figment of our imagination in April and then predicts in October that 100 retailers will collapse before the end of the year. This reactionary and somewhat dangerous pronouncement confirms that a few ‘Henny Pennys’ even exist among our own.
The fact is that retailers know it is a tight market at the moment. We also know that the Australian base economy of job security is sound yet acknowledge consumer confidence is smashed.
We add to this mix the RBA machinations of the headless chook variety; a government ideologically focused on massive economic change solely based upon conjecture science such as the ETS; a Productivity Commission keen to have retailers pick up some of the bill for parenting; an Industrial Relations Commission more attuned to the past than modern society with its failure to recognise the modern retail market; and a climate of financial mistrust.
No wonder the foot traffic in our major shopping hubs is diminishing.
But history tells us with every crisis there is opportunity. So now is the time for retailers to review their business model, reduce costs and begin to massage customer loyalty with more beneficial offerings. History tells us that now is the time to act; now is the time to restructure; and, now is the time to renew.
Can it be right that ten years of economic sunshine is over? You’re damn right it is and we are yet to determine whether this economic eclipse is partial or a total destruction of the market.
Yet the fundamentals of the Australian market are sound and many retailers are actively pursuing the restructure needed to guard against extended downturns in consumer demand.
Already we see evidence of retailers increasing their advertising spend to motivate consumers to venture out and shop. ABS figures for September indicate there are some sectors experiencing a recovery, however perhaps these false dawns need tempering during these uncertain times. While advertising is a recommended reaction to stimulate consumer interest so to are narrowcasting promotions to loyal customers.
Without any reflection upon other brands in the market I gained insight into how a major retailer such as Myer is addressing the issue of a tightening market at their recent announcement of annual figures. These insights focused on three main areas which can be adapted by all retailers regardless of size or share of the market.
Supply Channels – there are savings to be had if retailers concentrate on improving their supply channels and the relationships they have within the channel.
Customer loyalty – in difficult times retailers need to communicate with their customers, support them and encourage loyalty to their brand. A loyalty stamp is not enough. Intimate communication is needed with every shopper segment.
Staff reward – increased sales come from trained and rewarded staff.
If a large and growing retailer can do these things to help improve and grow their business, then why not a smaller brand or indeed an independent sole operator.
The fact is retailers can. They only need the motivation and the support to do so. The current economic climate is the motivation and the ARA can support you. All you need to do is seek our support and we shall gladly help you with direction, advice and programs that may be the difference between success or long term pain.
Don’t be a headless chook during this period of uncertainty; prepare yourself for the opportunities that will come. Good luck; be strong, proactive and calm and work towards a terrific Christmas trade.
base economy of job security is sound yet acknowledge consumer confidence is smashed.
We add to this mix the RBA machinations of the headless chook variety; a government ideologically focused on massive economic change solely based upon conjecture science such as the ETS; a Productivity Commission keen to have retailers pick up some of the bill for parenting; an Industrial Relations Commission more attuned to the past than modern society with its failure to recognise the modern retail market; and a climate of financial mistrust.
No wonder the foot traffic in our major shopping hubs is diminishing.
But history tells us with every crisis there is opportunity. So now is the time for retailers to review their business model, reduce costs and begin to massage customer loyalty with more beneficial offerings. History tells us that now is the time to act; now is the time to restructure; and, now is the time to renew.
Can it be right that ten years of economic sunshine is over? You’re damn right it is and we are yet to determine whether this economic eclipse is partial or a total destruction of the market.
Yet the fundamentals of the Australian market are sound and many retailers are actively pursuing the restructure needed to guard against extended downturns in consumer demand.
Already we see evidence of retailers increasing their advertising spend to motivate consumers to venture out and shop. ABS figures for September indicate there are some sectors experiencing a recovery, however perhaps these false dawns need tempering during these uncertain times. While advertising is a recommended reaction to stimulate consumer interest so to are narrowcasting promotions to loyal customers.
Without any reflection upon other brands in the market I gained insight into how a major retailer such as Myer is addressing the issue of a tightening market at their recent announcement of annual figures. These insights focused on three main areas which can be adapted by all retailers regardless of size or share of the market.
Supply Channels – there are savings to be had if retailers concentrate on improving their supply channels and the relationships they have within the channel.
Customer loyalty – in difficult times retailers need to communicate with their customers, support them and encourage loyalty to their brand. A loyalty stamp is not enough. Intimate communication is needed with every shopper segment.
Staff reward – increased sales come from trained and rewarded staff.
If a large and growing retailer can do these things to help improve and grow their business, then why not a smaller brand or indeed an independent sole operator.
The fact is retailers can. They only need the motivation and the support to do so. The current economic climate is the motivation and the ARA can support you. All you need to do is seek our support and we shall gladly help you with direction, advice and programs that may be the difference between success or long term pain.
Don’t be a headless chook during this period of uncertainty; prepare yourself for the opportunities that will come. Good luck; be strong, proactive and calm and work towards a terrific Christmas trade.