Hollister, Topshop, Costco, Williams Sonoma, River Island, and Zara share one common characteristic and that is that they are fit retailers aggressively embarking on international expansion. Australia is an attractive destination.
So the issue for me is not globalisation of retail per se, this is as inevitable as night follows day. The world gets smaller by the minute with transglobal flights getting shorter, the apex of global power shifting rapidly, technologies changing the very core of our existence and challenging the very pretext of who we are and what our communities even look like.
These retailers opening on our shores are already experiencing remarkable opening sales as the appetite for their brand and offer is motivating even the most cautious shopper.
Get business news first
Sign up to SmartCompany’s daily newsletter
The issue for retailers is how to compete in a differentiated manner, creating an even fitter business in the process. I am often asked how our Australian 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.
- Create a branded offer that has brand attributes, known for being unique and very strong at something.
- Try not to carry too broad a range relative to your marketplace offer – the dangers of being all things, as a speciality retailer, are fairly self-evident.
- Consider what you are truly good at – look at your competitors closely and the answers will be there.
- Create a differentiated story – typically around service, product range, heritage or speed of supply.
- Create a database – the world is moving to micro marketing and a database with regular offers and updates is crucial to building loyalty.
- Invest in a good business information system from MYOB retail to the more advanced inventory cubes – recording and measuring your largest investment is often the difference of between 2-10% of profitability.
- Implement sound sales forecasting, category and inventory discipline. After all, up to 25% of your investment can still be sitting on the shelf so stay close to this area.
- Introduce sales and service incentives to your team. After, all they can make or break your promise.
- Encourage and facilitate word of mouth. Over 80% of Australians have directly or indirectly utilised a social media site so the opportunity simply can’t be ignored.
- Create an online trading site that ties all your channels together – consider options like click and collect and ensure it’s mobile-friendly.
So now we have a cross-channel retail offer including the physical store, online site and social media pages all integrating to provide your customer with choices in what to buy, communicate or tell others about you.
There are many great challenges and opportunities that await us.
Happy fit retailing.
Brian Walker is the managing director of Australasia’s leading retail consultancy, Retail Doctor Group.