2015 The truth is out there!

By Steve Bohling February 01, 2015 Industry news

What does the coming year hold for retailers and suppliers? What does the big picture look like? Steve Bohling reports.

To view a PDF of the complete feature as it appeared in Wares magazine, click the download button at the bottom of this page.

In the second half of last year, Bud Little and Doug Robertson, on behalf of Wares, set to working their way around key senior level people in the industry, suppliers and retailers alike.

The primary aim of these visits and interviews was to get a handle on how the magazine is regarded today, what its place is in the market, and where to next. This will be shared in due course.

For now, though, a useful by-product of all this documentary work has been the accumulation of general attitudes and outlooks, including what local suppliers think of local retailers and vice versa, the major concerns of both ends of the supply chain and what each group considers their own and the other’s major challenges ahead.

The upshot is that this serves to form a useful snapshot of both intentions and attitudes around the New Zealand channel at this point in time, some of which we will share with you now.

As you will see, whether it’s the opinion of retailers or suppliers documented here, contrary to popular expectation, many of these opinions are shared! 



Let’s start by asking if local retailers and suppliers agree with the received wisdom you can find dotted around these pages about how retail needs to adapt to the changing marketplace… The retailers said the future of retail is:

  • A mix of bricks & mortar and online.
  • Technology.
  • Kiosks, Wi-Fi, online ordering, click & collect.
  • High service levels and greater servicing capacity.
  • Greater environmental awareness.
  • Large-scale, low-cost, niche/boutique and mobile retail.
  • A split between mainstream discounters and specialist stores offering service.

The suppliers said:

  • Short to medium term, a combination of digital plus bricks & mortar.
  • Specialist shops and independents – a combination of product plus service and services.
  • Big box stores will need a greater use of user-convenient technology.
  • Making shopping an enjoyable experience not a “necessary chore”.
  • More niche marketing online, better consumer profiling and use of B2C apps.
  • Omni-channel marketing.
  • Online will assist suppliers in the long term.

None of which breaks the mould when it comes to what’s happening globally. To state the obvious, don’t take any of these bullet points as absolutes – there will be a mix of some or all of these predictions at some point in the near future. And there is no hierarchy to the order of these points by the way. 



What do suppliers think retailers have to do to remain relevant?

  • Improve inventory control.
  • Rationalise brand and product ranges.
  • Invest online.
  • Omni channel marketing and clear positioning. 
  • Become much more consumer-centric and provide a better shopping experience.
  • Invest in upskilling staff in product knowledge.
  • Higher levels of service.

What do the retailers themselves believe they have to do?

  • Improve inventory control.
  • Embrace technology.
  • Provide a better shopping experience.
  • Invest in staff and stores to provide informative, engaging shopping experiences.
  • Great stores and design.
  • High service and servicing levels
  • Good, well trained staff.
  • Free in-store training for customers on how to use the product
  • Independents need to unite to counter the national chains’ “duopoly”.
  • Develop online, ensuring a balance of online and in-store.

My take on this is that, although retailers and suppliers do so often appear to be at loggerheads over certain issues, both ends of the supply chain actually broadly agree about where they are right now and where to in the short to medium term.



Looking beyond immediate needs, what changes to the channel do retailers predict?

  • More retailers will import products themselves.
  • In some cases, retailers and suppliers will diverge, each reaching the customer directly.
  • In other instances, retailers and suppliers will work even closer together to achieve better product training, sales and service support, promotional support etc.
  • Suppliers who want more of their products on display will find that, due to lack of margin and the high cost of running physical stores, they will need to fund the stock, marketing and logistics.

And what about the suppliers?

  • Suppliers will seek to take back their lost “channel captaincy” role.
  • Some will actively target online retailers.
  • Suppliers will set up own showrooms and / or online and deal direct with the consumer.
  • They will establish showrooms but deal through retailers.
  • There will be more strategic alliances and partnerships and chartered agreements.
  • There will be an increase in specialist shops.

So there is clearly not just agreement about the middle ground that revolves around targeted specialisations and increased service / servicing levels from both ends of the supply chain, but also a degree of consensus about how retailers and suppliers might achieve their goals.

The bottom line is that we aren’t actually looking at an Armageddon-style end of days for the appliance and consumer electronics channel as we know it and that supply and demand are simply adapting to a changing marketplace… 

Having said that, it’s clear that bigger will always be better when it comes to buying competitively and that general rather than independent retailers cannot survive based on quality of service alone…

It’s also worth stating at this point that, as with any survey of individuals with an opinion – and let’s not forget that at the end of the days we were pooling the opinion of individuals! – it’s always the extremes rather than the middle ground that come to the surface…  

Does some or any of this sound familiar? Will some or any of this actually come to pass? I'd like to here your thoughts, so email me to share your opinion, in public or in confidence, to take this conversation further!




We’re always hearing about the clash between the supplier’s need for commitment and the retailer’s need to get to the market as rapidly as possible. 

A typical supplier’s comment is: “Retailers don’t like a lot of change. Retailers don’t want to take a long-term view. The barriers of entry here are quite low, so you can always have new competitors coming in – you always want to be planning to keep ahead of the curve!”

But is this supplier-retailer relationship just a fact of life these days? Julian Liew-Young of Glen Dimplex offers a different perspective around the difference in thinking between suppliers and retailers: 

“I would say in general suppliers tend to be longer-term focused and retailers trust us as suppliers to have that long-term outlook, to be sourcing good products and components and investing into R&D – it’s up to us to look more than one season ahead for the sake of our retail partners. [But] I wouldn’t say we are all about long-term and they are all about short-term.”




In keeping with our big picture take on the year ahead, we asked Tim Edwards, Chief Executive Officer at Noel Leeming, for a handful of pointers about where this retailer is heading on a handful of current issues.

What are your 3 key New Year’s resolutions as a retailer?

  • Accelerate our point of difference.
  • Tell more stories about all the great stuff we are doing.
  • Increase the business’s ability to be agile.

Baby boomers or millennials – which group will affect your business most this year?

  • Both, just like online or stores – the complete approach is both.

How are you preparing for The Internet of Things?

  • IOT is a just a term – we already focus on connected devices, in fact we lead our segment on TVs, mobile devices, wearables, etc.
  • Our job is to explain to our customers how they can get value out of The Internet of Things. Enhance their lives.

Is the NZ market ready for real personalisation using RFID or 
in-store beacons etc?

  • I/we believe this is a softly softly approach. It is a bit like QR codes – some of these things are gone before you get the infrastructure ready behind them.
  • One thing we will be sure to do is ensure “if” we use them, it is the way customers want to be interacted with that adds value.

More retailers are arming staff with mobile devices – what’s your view?

  • We believe that in the end it has to be good for the customer, and we believe mobility is. 
  • The key is what and how and to ensure that it takes the business and the customer interaction forward.

How long until you can kill the checkout?

  • Again, this is a bit like online and bricks and mortar. There is a place for checkouts. Sure, they can evolve but we are in no hurry to remove them. It is not that the customer is saying they want this, what they want is options.  




In a recent article on the excellent Transworld Business website, US consultant and analyst Jeff Harbaugh talks about the implications for marketers and retailers facing an “unprecendented rate of change”.

Candidly admitting “I’m not sure I have any idea what will happen a year from now, let alone five years,” Harbaugh nevertheless posits the following trends around how and where retailers will be soon doing business:

  • That there will be a reduction in retail space, the US and UK especially being overshopped per capita of population, he says.
  • This will lead to reduced inventory as retailers’ physical footprints shrink.
  • All but high end malls will continue to see reducing traffic and spending.
  • New technologies like 3D printing are enabling affordable, short run, more customised products.
  • Digitally generated sales will continue to grow and possibly even accelerate – so long as retail logistics improve.
  • How to achieve real product differentiation? “Making a product at least occasionally hard to find will matter,” says Harbaugh.
  • Meet the customer on their own turf – “Decisions about where and how to distribute will need to be made on a case by case basis… unless you do your omnichannel connection so well that it doesn’t matter where you’re distributed as long as your merchandising is well done.”




To get a specific local forecast on 2015, we canvassed three local suppliers covering the consumer electronics, small and major appliance categories.

Jon BarrellSamsung: “I believe 2015 is going to be a much stronger year than 2014. We won’t be recycling some of the exceptional growth from the digital switchover for TVs, so that won’t be an issue in terms of growth versus the previous year and we have three major sporting events that will draw in Kiwis and get them excited and that will create good demand lift. So I’m confident that it will be a strong year with a number of market factors influencing that and overall I think the market is positive.”

Cliff CarrSunbeam: “It’s all about differentiation and standing for something so the customer has a reason to come to your store. Those that continue to innovate in that way this year will do well and make money and those that struggle to do that are going to continue to do it hard.” 

Stefan KnoesenElectrolux: “Every year we say the market is struggling and people aren’t buying like they used to which is true. So now it’s more a have-to purchase where maybe in the past it was more of a feel good thing but at the end of that day people still need washing machines and appliances. I think the market is fairly stable. If you look at the last 4-5 years it hasn’t changed a lot. We had a bit of a downer a few years back but we’ve been doing better each year over the last since then.”




We’ve seen the freeing up of the telecom market and more recently, local loop unbundling, both of which have had an appreciable effect on the appliance and consumer electronics channel.

What about free and pay TV which have been busy unbundling themselves? First Coliseum took English Premier League games and PGA golf and now Sky TV is offering Super Rugby on its own for online viewing live and on demand in HD.

Sky TV also has its online Neon service in the wings while Spark has already launched its Lightbox internet TV and Netflix will be here by the end of March. So $12-20 a month will get you “your choice in your own time of your choosing”.

Change is good, right? And more choice is even better? We recently checked in with Jason Bell of Noel Leeming to see how this notion was playing out. “I see the increase in available media content and the multiple ways this content can be delivered as a positive for the industry,” he says.

“Consumers who are prepared to pay for the Premier League Pass etc through Coliseum more than likely won’t be happy just watching through their computer. They will want a fuller in-home entertainment experience through their television. To achieve this they will need expert advice and potentially additional/new devices to deliver the right experience. So, in my opinion these are all added opportunities which we intend to capitalise on, for sure!” 




A round-up by SAP (http://bit.ly/1DVsNrQ) of the key social media talking points around the National Retail Federation’s influential BIG Show in January this year shows a clear picture of what was top of mind for the attendees:

  • 22% Investment in mobility (moving from fixed to mobile POS).
  • 19% Retail technology solutions (RFID and beacon technology).
  • 15% Global e-commerce (getting the right local partners and tailored content).
  • 10% Optimising omni-channel.
  • 10% Big data for consumer insights.
  • 8% Digitising in-store.
  • 8% Personalised customer experience.
  • 7% Cloud solutions.
  • 4% Internet of Things.

Also at the NRF BIG Show, Robert Safian, Editor in Chief and MD of Fast Company, talked about “Generation Flux”. The only prediction he was happy going on the record about was that the retail world “will not be static, it will keep changing – as much as it may feel like it’s changed in the last two years it gonna keep changing at that pace and we have to get ourselves prepared for it!”




Target, The Home Depot and others have made headlines globally in the last year for some massive data breaches and we’re sure there will be others in 2015.

Security is a business issue” says Deloitte in the Aussie edition of its Global Powers of Retailing 2015 report. “Retailers need to understand if their security capabilities are sufficient for their risk appetite, while at the same time making sure security enables, rather than inhibits, the business.”

Now it is usually the big players that make the news, but data security is an issue for any business that holds information on behalf of their customers. So it’s salutary to find that Deloitte’s report estimates the average number of records breached across all Australian businesses was 20,000+, with the total average cost to affected companies of US$2.8 million…

You can get your own copy of the Global Powers of Retailing 2015 report at http://deloi.tt/1C1QoYW




Earlier this month, we talked to Retail NZ’s CEO, Mark Johnston, one year into his tenure, for an outlook on local retailing.

By way of a market snapshot, it’s no secret that the Christmas season was late in kicking off, thanks to the weather, but it’s improved since then. 

This Christmas, online spending – perhaps 10% of the NZ total – certainly had an impact on sales, particularly with offshore websites, which accounted for something like 40% of NZ online transactions.

And, with more still to come from online, says Johnston, we will be seeing more click & collect – that blending of online and the physical store environment – which may account for as much as 50% of some UK retailers’ online transactional activity.

Blending of physical and virtual shopping will continue, especially through mobile devices which means retailers will have to get their offer right.

  • Make sure your digital presence is mobile optimised.
  • Make sure you have click & collect capability.
  • Consider adding value to your normal activities with big multi-retailer events.

In respect of the last item, Mark Johnston also believes that the peak season may get even more peaky – which is to say that we will see more retailers getting behind shopping events like Black Friday and Cyber Monday or Alibaba’s Singles Day to kick off the Xmas shopping season.

Still in its infancy here, local retailers will increasingly seek to tie into these sorts of events. The last Click Monday and The Warehouse’s equivalent event certainly showed a sales uplift says Johnston. Have these big discount-based events shifted shopping patterns? Probably, both in terms of volume and timing, he says.




As you can see around these pages, we have been looking far and wide for key attitudes, trends and innovations to add value to this issue of Wares

How frustrating then to find that almost all of our findings have been already encapsulated and succinctly to boot by those clever global futurists at PSFK, in their report The Future of Retail 2015

To précis the following 10 pearls of wisdom, PSFK offers the following: “The physical store remains a critical component of the shopping experience for retailers, brands and consumers. But if retailers continue to fail to connect with the modern consumer, many more stores will close and the shopper will simply give up waiting for the revolution and buy everything and anything through the personalized, synchronized, multi-device, communal retail experience that many online retailers already offer.”

In other words, work out ways to connect with the customer:

1. Be there and everywhere Enable customers to shop anywhere on their own terms.

2. One-click everything Enable customers to plan their own perfect store experience.

3. Power to the people Give associates the tools to connect with customers in more ways.

4. Digitise the real world Connect customers with the right information, right now.

5. Everyone of a kind Create a personalised shopping experience for every customer.

6. Be the hub Transact in culture, experiences and relationships.

7. Imagine the ideal Sell customers on an aspirational lifestyle.

8. Experiences not products Design new ways for customers to get hands-on with products.

9. Zero inventory Transforms your store into a digital showroom and on-demand delivery hub.

10. Kill the checkout Treat the entire store as a place where customers can tap to pay.

Now clearly not all of these exhortations will necessarily work in the local context, but they do indicate that many retailers have work to do before they can tick off even half these points of best practice…

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