Retail Australasia 2012: Rising to meet the future
03 July 2012: Top of the agenda at May's Retail Australasia Summit & Expo was how our best retailers are adapting to the changing retail environment.
The Retail Australasia Summit & Expo 2012 was held at the Aotea Centre over 23-24 May. We take a look at some of the highlights.
Technology, multi-channel retailing and rising to meet the modern consumer’s changing expectations were all buzz topics at this year’s Retail Australasia.
It was an event littered with big names, including Auckland super city Mayor Len Brown, Christchurch Mayor, Bob Parker, and a host of industry names including John Slack-Smith, Chief Operating Officer for Harvey Norman, and John Journee, Chief Executive Officer for Noel Leeming.
CANTERBURY – RIPE FOR RETAIL?
Bob Parker was typically media savvy in the endearing way that has made him a bit of a legend in recent times. He spoke about Christchurch’s plans for a new CBD as a centre for retail and the opportunities therein for business.
After playing some harrowing footage of the destruction caused in the CBD during the beleaguered region’s second and most devastating earthquake, Parker made a pitch for Christchurch as a city ripe for new retailers.
Central to his speech was the idea that, within the next two years, the currently ravaged Christchurch CBD will be transformed into a more accessible and modern central hub for potential customers and tourists.
What form will this take? “A low rise city that responds to the 21st century. It’s all about energy efficiency, sustainable design and environmental friendliness,” according to Parker.
HARVEY'S TAKES IT HEAD ON
Multi-channel retailing was the central theme of the presentation by Harvey Norman’s Chief Operating Officer, John Slack-Smith, who started by pointing out the subtle difference between “multi-channel” and “omni-channel” retailing…
According to Slack-Smith, an omni-channel strategy in retail is the evolution of multi-channel strategy and represents a shift in power from the hands of the retailer to the consumer. To cut out the retail rhetoric, it comes down to dealing with the challenge of “satisfying the customer who wants everything”. This can mean communicating with consumers through an increasing amount of different mediums, with the view towards the seemless integration of physical and digital retail.
What has that meant for Harvey Norman in concrete terms? “We’re putting big money into technology”, says Slack-Smith. In practise, this has meant the inclusion of 1000 kiosks throughout Harvey Norman stores, as well as expansion into social media and home services.
Technology, both in terms of how it’s being used by customers to research and purchase products and how retailers use it to interact with consumers, was a major focus of Slack-Smith’s presentation. Hence his assertion that:
“The retail industry in general can be accused of under investing in technology over the last two decades; I can say that with confidence because we’ve been one of them.”
How can technology be used to leverage your business? It’s about how the modern retailer deals with the wealth of information about their customers that comes with an omni-channel strategy. As Slack Smith puts it:
“Technology needs to give a single view of the customer. We ask ourselves the question: ‘Do we have a single view of the customer regardless of how they’ve engaged with us?’"
Rest assured though, embracing the many media which customers use to engage with your business by no means signals a slow death knell for the bricks and mortar format. Slack-Smith was careful to point out that, although customers undoubtedly engage with retail differently today than they did even as recently as two years ago, “they still like to browse and they still like to talk to a sales person.”
What’s key to success in today’s retail environment is an inter mingling of people and technology. Slack-Smith refers to the maxim: “technology when you need it, humans when you don’t.”
As a gauge on the extent of the online channel in retail, Slack-Smith mentions the highly developed US market, in which sales through retail stores still make up a hefty 92% compared with only 8% of sales made online. It’s also pointed out that, contrary to the belief held by some, getting through to the consumer by online means doesn’t have to be, and indeed shouldn’t be, an impersonal experience. In fact, the platform can offer retailers a unique chance to personalise their brand image.
So how can online retail complement traditional retailing? According to Slack-Smith, it comes down to “making the store experience an extension of the online experience.” The challenge for retailers here is to provide consistency across every medium consumers interact with their brand through.
Embracing the omni-channel method can also mean opening up the forum for customer reviews and encouraging social sharing: “We’re not supposed to be the single source of info,” according to Slack-Smith.
One means of getting feedback from the customer is through surveying. In this regard, Harvey Norman has a policy of responding to a complaint or question received within 24 hours. Of which Slack-Smith says:
“We want to listen to people, acknowledge them and respond. Let it go any further (than 24 hours) and you’ve lost the customer.”
The retail giant has also received positive feedback from a recent promotion known as ‘Geek Saturday’ held in May in which 2000 staff from the stores’s computer category team made themselves available for any and all questions on technology. With a view to demystifying some of the tech talk involved in the industry, staff recorded six you tube videos.
The whole promotion was backed by in-store merch, online displays and social media backing. What makes the promotion unique, as Slack-Smith points out is that it isn’t based around ‘product or price’.
DISCOVERING LOCALLY AND ACTING NATIONALLY
Chief Executive Officer for Noel Leeming, John Journee, spoke about Noel Leeming’s view of some of today’s challenges and changes in retail both globally and locally.
On the one hand this has meant adapting a multi-channel strategy as well as realising that the customer is “embedded in value seeking”. While coming up with new ways to market in new channels is one way of responding to these changes, there has been a big focus on “the price part of value”, of which Journee says:
“That’s where the destructive part of the trend can be. You can’t deny that price is an important part but some of the opportunities can be expressed in other parts of the value proposition to the consumer.”
Noel Leeming has taken a “from the ground up” approach to the challenges currently facing retail. Key to John Journee’s presentation was the need to build in strategies to challenge current trends into the company’s business model.
Increasingly, Journee says, the power is in the hands of the consumer; they’re more informed, and increasingly they’re doing their research online. With boundaries between local and global markets coming down, consumers are also more spoilt for choice and hence more demanding. They expect convenience, immediacy and they’re after product that is catered more specifically to their needs. Journee says:
“If you’re not consistent in integrating your thinking, you’re going to run into trouble.” Is there room for improvement here? “Broadly I think that kind of thinking is maturing but I believe that as a sector industry, execution is lagging.”
How has Noel Leeming dealt with the changes in the industry? Journee says: “In the last 3 years we’ve been on a bit of a journey. We’ve been focussing on optimising our performance and more recently we’ve been moving into innovation. Our focus has been on demonstrating value."
Though Journee admits that “price will be part of that”, he forecasts that it also comes down to “shaping the story around value and placing authority and relevance in our position in that market.”
Bucking the day’s emphasis on the online channel, Journee focused on the importance of integrating physical channels.
In this regard, Noel Leeming has reaped the benefits of taking examples of best practise from its best stores, and adapting this into the entire store network:
“We expect [our store managers] to act like retailers and not just storekeepers. We empowered them to take risks. We’ve had a lot of success with store management finding very successful ways to go to market in a challenging environment. We’ve been able to take those concepts and use them nationally. It’s been a huge advantage to us in a very competitive market.”
Also worth mentioning, John Journee spoke about the demographics that are dramatically changing the industry. How so? For example, the ageing baby boomer population is growing as a consumption bubble rivalling traditional spending around families with children. Journee says: “We do need to pay attention. It hasn’t always been a mainstream part of the market but it will become so."
OTHER OUTTAKES AND TAKE HOMES
Highlights for us from day two of Retail Australasia included a very enthusiastic presentation from Leftfield Interactive Managing Director, Hayden Sanders, and Trade Me’s Head of Marketplace, Craig Jordan who was talking about the online marketplace.
Jordan talked to the online marketplace as part of a multi-channel strategy. One interesting outlook was his point of view that the USA views Australia and New Zealand as an easy target for the market place and questioned whether New Zealand businesses were doing enough to combat the cross border trade.
Jordan’s presentation also included his thoughts on the marketplace as a community for people to get together and really influence each other’s purchasing habits.
Another noteworthy item was his view that many younger people, between the ages of 18-23, use shops as a way to browse, and then will go online to find a cheaper alternative and how retailers can use the internet to extend their range.
Leftfield Interactive’s Hayden Sanders gave a presentation on how social media can contribute to retail success and how using social media sites, such as Facebook and Twitter, can increase traffic.
Sanders believes that the key to a successful business is to listen to a customer’s feedback, and that the consumer should always be the main focal point when it comes to product development.