Upmarket British department store Marks and Spencer is the latest international retailer to be rumoured to be landing Down Under, with speculation the company is on the search for an Australian ad agency.
The rumours follow a report released by Deloitte this week that forecast the flood of international retailers coming to Australia will continue in 2015.
AdNews reports Marks and Spencer is shopping around for a local ad agency to make its move into the Australian market, with a senior agency executive telling the publication: “As far as I can tell, M&S hasn’t decided on which agency to appoint and in terms of opening, well, no-one knows the exact date but it will definitely happen soon.”
Brian Walker, chief executive of the Retail Doctor Group, told SmartCompany the iconic British retailer has been rumoured to be looking at Australia for some time.
“Marks and Spencer are absolutely coming to Australia, that’s a given,” says Walker.
The upmarket department store was founded in 1884 and already operates in more than 50 territories worldwide, employing almost 86,000 people.
Offering everything from fashion to fine food across a mix of designer labels and its own brands, Marks and Spencer’s online channel has shipped products to Australia for several years.
“They know the market here, they know through their online sales and online intelligence that this a good market for them,” Walker says.
Walker says the arrival will pose the biggest threat to Myer and David Jones.
“I have to say, the duopoly of the department store scene is really under threat. It was clear there wasn’t ample space for more than two, but now with online department stores and online retailing, there is a real threat to big footprint department store models, like David Jones and Myer,” he says.
Built pre-internet, Walker says these models were founded on physical domination, big branding and lots of of stock in plenty of space.
“Online has changed that so dramatically. Businesses like Marks and Spencer can open anywhere around the world now and they have already built an understanding of their brand through their online presence,” he says.
Walker says there will be a significant ex-pat population that will likely flock to the brand, as well as many Australians who will be familiar with Marks and Spencer from travelling.
“It’s another part of the core supply of the department store duopoly being eaten away,” he says.
Marks and Spencer bricks-and-mortar stores are also well known for upmarket grocery departments, a feature which Walker says has been largely neglected by Australian department stores, relative to that of overseas players.
“The food offering has largely been left alone by department stores, relative to Marks and Spencer and Harrods. I can only assume they’ll bring that element, which has been missing from the Australian market,” he says.
Walker believes Marks and Spencer is likely to follow the path of international retailers before it, such as H&M, TopShop and Uniqlo, first opening in Sydney or Melbourne, before moving to Brisbane and eventually the west coast.
“I don’t think there will be a plethora of Marks and Spencer stores. They’ll first see how the Sydney and Melbourne goes and boost their online presence,” he says.
SmartCompany contacted Marks and Spencer but did not receive a response prior to publication.