What the New Year’s sales tell us about business strategy
Monday, January 15, 2018/
Now that the 2017 Christmas and 2018 New Year’s retail sales have ended, it seems as though there’s a mixed bag of results at the top end of town. However, in the online world, at the small end of town, it was an outstanding four weeks of sales.
I’ve written for a couple of years now that the four key areas companies need to master in order to harness digital disruption are partnering, technology, innovation/reinvention, and millennials. Mastery of those four areas was never more evident in online retailers than between December 14 and December 24 with many small and medium-sized warehouses across Australia working nonstop.
I spoke with one business owner who had seen a 65% increase in year-on-year sales at a 10% higher gross margin than last year. The business had taken price increases in October and held the price throughout the early part of December to fund free shipping. Then demand went ballistic. Ballistic is a strong word but when shoppers call in saying, “here’s my credit card details, just choose something for my partner up to $200”, then you know you are doing something right with your business.
Another online retailer ran a “12 days of Christmas” campaign over the same time frame promoting daily specials to their club member base. They cleared 100% of the stock on offer each day, again at solid margins.
A third retailer that is not yet in online retailing had realigned their business in early 2017 to focus on supplying “new” retailers to the Australian market. Their business, a very innovative supplier to the automotive trade, was up 20% in new retailers, compensating for flat sales in the mainstream Australian retail trade. In 2018, they will launch a direct-to-shopper strategy from their existing warehousing proving it’s never too late to innovate or reinvent.
One of the links between all three of these retailers is they all have warehousing based in Australia. Something that five years ago was completely out of fashion. But all three have invested in technology in and outside the warehouse. Inside the warehouse. they have used new pick, pack, weigh and freight technology, and outside the warehouse they have focused on social media and online awareness and engagement.
These two technology areas combined to deliver fast accurate and productive fulfilment for their shoppers and retail partners. Retail partners that include Ebay and Amazon. Nobody can truly maximise their growth in Australia without partnering with Ebay and Amazon, as well as Alibaba. I have to say that Ebay’s account management team are doing an incredible job of partnering with and listening to small Australian businesses to grow sales.
So, as we enter the February to April retail doldrums, that time when our credit cards are maxed out, retail sales stop for three months and some public company CEOs step down after the Christmas trading results, it’s good to know well run small Australian companies can still thrive.