Myer chief executive Bernie Brookes has warned that bargain websites such as catchoftheday, graysonline and dealsdirect have ‘‘had their moment in the sun’’ and Australia’s traditional retailers will start to dominate online as they get ‘‘fair dinkum’’ about the web and integrate it with their stores as an omnichannel offering.
Mr Brookes said these ‘‘flash sites’’ all faced the same problem in terms of consistent availability of product while lacking the brand trust of traditional retailers.
‘‘They’ve been there when there has been no effective competition,’’ Mr Brookes said. ‘‘If we produce a list in three years time of the top internet sellers in Australia, it will be dominated by the Myers, the David Joneses, the KMarts … the existing bricks and mortar retailers. That’s exactly what’s happened in the US and UK.’’
One critical advantage for traditional retailers is the geographic coverage of their physical stores. Once this is integrated with their digital service as an omnichannel offering, it will be hard for pure online players to compete with the convenience and service, according to Mr Brookes.
But he admitted that global price harmonisation – to ensure local prices are competitive with what overseas sellers can offer – is one of the last pieces of the puzzle needed to make all this work.
Surveys of in-store customers indicate that these clients rate convenience, fashion/style, service and price in that order, but it is a different story for online.
‘‘When we survey our customers online, price is number one,’’ he said.
Mr Brookes said the 20 per cent of the company’s range is house brands and these are unaffected by price harmonisation. Another 40 to 45 per cent of the department store’s sales are globally price competitive.
‘‘However we’ve probably got 20 to 30 per cent of the range which is not competitive on a world scale,’’ he said, naming cosmetic companies and mens apparel as two of the main culprits.
These price drops may help make our traditional retailers more competitive but it will also be painful with the lower prices feeding through to lower sales revenue at a time when consumers are already reluctant to spend and costs are rising.
This story Administrator ready to work first appeared on Nanjing Night Net.