Retail experts are saying it could be the “last chance” for struggling department store chain Big W to make a comeback after reports of a leaked memo claiming the retailer has instigated a shakeup of senior executives and in-store categories.
Trade press Channel News reports an email memo from Big W’s new general commercial manager Teresa Rendo was leaked to the publication, outlining the retailer’s plan for a re-jig of product categories and the appointment of a number of executives at the head of those categories.
This involves Big W’s categories being divided into new “universes”, the memo claims, consisting of focuses on kids, leisure, homewares, and “everyday and seasonal” categories.
“The universes are designed to put the customer back at the heart of our decision making and the re-alignment is designed to reflect those universes and to ensure that we provide a seamless customer experience across all universe touch points,” Rendo said in the memo, reports Channel News.
The memo claims Rendo says ex-Big W and previous head of product at Rivers, Joanne Nix, has been appointed as head of commercial for the kids division, while another Big W veteran Shane Carter has been appointed head of commercial for the leisure division.
Additionally, previous head of trade general merchandise at Woolworths Amanda Lunn has reportedly been appointed head of commercial for everyday and seasonal. The company is said to be still confirming an “external candidate” for the commercial head of the homewares division.
Big W’s last chance?
News of the potential switch-up is the next step in what Retail Oasis’ Pippa Kulmar believes is a comeback the company has been discussing for “what feels like years”, telling SmartCompany it was time for the retailer to “turnaround and just do something”.
“The market is overhearing about a Big W turnaround. When you’re continually telling the market you’re reworking the business, they’re going to think you’re not serious about it,” she says.
“I think this is really Big W’s last chance to say they’re going to turn the business around.”
However, to achieve a successful revamp, Kulmar firmly believes the business will need to seek a point of differentiation in a market already dominated by Kmart, and threatened by the rise of Amazon.
“If I were Big W, in order to come back I would seek dramatic change. We’re about to have Amazon in Australia, and we’re expecting them to decimate a lot of product categories, so a significant turnaround needs to be focused on the customer,” she says.
“They’ve got to find a point of differentiation that’s different. What is their technological advantage to Kmart or Amazon? And if they move heavily into fashion, they’ll be up against the likes of H&M and Zara.”
Bettina Kurnik, senior research analyst at Euromonitor agrees, telling SmartCompany a turnaround “depends on how Big W reinvents itself”.
“At present, it risks sliding into obscurity due to a lack of unique or relevant positioning. However, it has the advantage of being a direct competitor to Kmart, so it’s not in the unenviable position of Target, which is having its sales essentially cannibalised by Kmart,” she says.
“If Big W is able to be associated with quality, competitive pricing and convenience, both in terms of product range and geographical proximity, there’s no reason why shoppers wouldn’t migrate back to the retailer.”
The focus on the new “universes” category won’t cut it claims Kulmar, saying something “drastically different” would be the way to go and the retailer needs to “put it all on the line”.
Additionally, for Big W to succeed, Kulmar notes another department style retailer would have to fail, as the market is a “zero sum game”. With Amazon pinned to absorb any growth in the market, a Big W comeback would have to be at the expense of another retailer, she says, unless the company becomes something “entirely different”.
Kurnik believes the retailer could better position itself as a “mass merchandiser” of homewares and kitchenware products, and thinks a reputation as a “strong omnichannel player” could give the retailer an edge.
“Better development of and a stronger push towards click-and-collect convenience through the Woolworths network, for instance, could sway consumers, yet this seems to have been trialled and then phased out,” she says.
“Ensuring personalised, rather than universal, store layouts could also enhance Big W’s relevance, as not all brands and price-points necessarily appeal to consumers in all socio-economic areas.”
In a statement, a Big W spokesperson told SmartCompany “We are working to leverage the combined talent of the BIG W and wider Woolworths team in executing this strategy and look forward to sharing the benefits with our customers”.
* This article was updated at 12.35PM July 6 to include a statement from Big W.