I Am Not A Fan of Coronavirus!
….especially when it is used by retail executives to explain the underperformance of their business.
Myer chief executive John King had ” joined the list of retailers hit hard by the one-two punch of bushfires and coronavirus in the first half of FY20, posting a 26.9 percent drop in statutory net profit” and expected further impact in the second as reported as reported by Dean Blake of Inside Retail.
Coronavirus is a tragedy with global implications for economies, personal wellbeing and yes it will impact retailers, their customers, and supply chains however for some retailers it can be argued that blaming Coronavirus, bushfires, the weather, etc is a smokescreen to take attention off poor business practices over many years. Take Myer for example
with 4.5 years of continual decline it is easy to blame outside forces and at the same time say our Customer First Strategy is starting to work. To me, though it feels like, Myer is ” kicking the can” down the road.
Women’s fashion a core area for Myer is changing in so many ways from Capsule Collections, Rentals, Blogger Influence and Direct to Consumer and this is impacting all full-price retailers. In addition, Department Stores represent the boring middle and the over 40’s demographic whose working numbers are declining 5% per annum.
The solution for Myer is not blaming coronavirus and it is not incremental change as the results are negative growth as seen above, John King needs to look outside his current management team and Board and traditional retail thinking, there is a whole new world out there.
By way of example, 50% of US Retail Growth is coming from eCommerce and US Department Stores like Nordstrom are generating 30% + sales online so it was disappointing to see that only half of Myer’s range and half of its concessions were represented on their eCommerce site. One of our European clients, when faced with declining sales, provided a full-time resource to upload all their products onto the retailer’s site, sales doubled 2 years in a row. They also provided a data analyst to Amazon to improve forecasting and reduce out of stocks. This innovative thinking seems to be missing from a lot of our retailers.
How hard would it be to get all their products online, co-ordinate their concessions to put their images online all in 3 months? I am sure there are a million reasons within Myer on why it is impossible to do and that is the difference between agile, flexible modern retail and traditional retail.