Feature

Why aren’t retailers fighting back?

By Phoebes Garland, Garland & Garland Fashion

US RETAILERS BLACK FRIDAYThe invasion of global chain stores into the Australian market will hit a crescendo this year with the arrival of the Swedish retailer H&M and UNIQLO from Japan, not to mention the aggressive advertising by the likes of Matches.com, Farfetch.com, Net-a-Porter, Neiman Marcus and many others. It leads to the inevitable question: why aren’t Australian retailers fighting back by marketing themselves overseas?

The impact of these new players in the Australian market is already significant, even if it has only just become evident beyond rag traders. It’s early days, but the possible merger of Myer and David Jones, creating an ‘Australian retail champion’, should be seen as a first step in the majors creating a fortress against new market entrants which have untold economies of scale and market power. A retail war is inevitable and Australian retailers will need to carefully choose their battles – early signs are not encouraging.

Witness large retailers arguing against GST-free imports under $1000 ‘til they’re blue in the face. This is the wrong battle. Most consumers who shop overseas do so because the savings are significantly more than the 10 per cent they’re saving on GST, even taking into account (in some cases) absurdly high shipping costs to Australia. By fighting to extend the reach of GST to low-value imported items, Australian retailers aren’t hurting their foreign competition, they’re hurting Australian consumers by making them pay more tax!

Instead of making Australians pay more tax – an odd strategy, you’d think – retailers should utilise their energies into an all-out assault in major newspapers overseas, every overseas website and Google search engines to promote our Australian brands and our Australian retail sites, luring these overseas customers to shop in Australia, at Australian retail sites, selling Australian brands. It would seem a great natural progression for David Jones considering they have pioneered the development of Australian brands and nurtured Australian designers.

online_retailWhile I feel complete empathy for smaller retailers in the mainstream market who may not have large marketing budgets, I can’t help but feel many are not helping themselves in a lot of instances. Every season I hear how concerned they are about online, yet the majority have no Facebook or Instagram accounts, barely check their emails and wonder why business is tough. They are the first to blame online but what about doing something about it?

I well understand the mature customer struggles with purchasing online, and with advancing technology and exact measurements of garments it’s not always impossible to shop online, but working cleverly can overcome these challenges.

In my January piece with David Bush (ex GM of Womenswear, David Jones and now DBC Consulting) he said of mainstream retailers struggling to sell online: “Online retail is not always incremental but it is a gateway for communication to the retailer.”

There is so much smaller retailers can do to fight back and market their business overseas.

checkoutFor as little as $8.00 a day, you can target worldwide advertising on your Facebook page to increase brand recognition among your target audience. Pinterest is free, as is Instagram.  Digital experts have also realised that bespoke solutions are essential for small customers with limited budgets – and a happy customer will come back and become a larger customer. The world is your showroom.

Recently in an independent shop on Chapel Street in Melbourne my phone rang. It was a friend enquiring about my daughter who had to be taken to emergency the night before. I was an interested buyer so I remained on the phone while riffling through a handful of garments, as I didn’t want to leave the store. However, the sales assistant turned to me mid-conversation and said: “Do you really think I want to hear this?”

Offended and shocked by the blatant rudeness, I left without purchasing anything. Upon leaving, I observed the shop: what a mess. No merchandising. Stock was reduced to 70% (probably clearing of samples from a distributor). And, sure enough, no digital presence.  No wonder she was angry and jaded. High rents and an inconsistent retail market, which has then resulted in not just bad service, but rude service.  I walked away from her shop thinking she has just validated why I shop online.

phoebe_soloAbout the author:

Phoebes Garland is a Features Writer for EXPOSED Online and co-owns Garland & Garland Fashion with Robert Garland, a leading fashion agency based in Sydney. Phoebe also owns Fashion Initiative an online fashion destination covering business of fashion, fashion, luxury and events. Described as a” Power Agent” by Ragtrader magazine. Between the two of them, Phoebes & Robert Garland have over 50 years sales experience in fashion, publishing and advertising.

Garland & Garland Fashion is a respected leading boutique fashion agency based in Sydney, and they are regularly sought for comment from various media and the fashion industry on business fashion topics, fashion and issues. Phoebes was named as The Ones To Follow In 2014: The Top 20 Fashionista Hot List of 2013.

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21 thoughts on “Why aren’t retailers fighting back?

  1. While I understand the importance of your phone call, do you not see how rude it is to be mid conversation while shopping. It is probably one of the rudest mannerisms around at the moment. You could have easily walked out of the shop finished your conversation then returned. Most customers will walk into a shop and pretend to be on the phone so as not to talk to the assistant (best reaction when they are caught out), I think your reaction is very petty and self centred, just to remind you it is shoppers like you that try to justify online shopping that are killing independent retailers.

  2. Hi Pheobes, Retailers are fighting back, but an online presence is an uneconomical waste of time. Facebook provides an avenue for customers to avoid your store and still compare prices, while allowing competitors to ensure that they undercut or at least match yours. “Making Australians pay more tax ” can be said a different way. “Making sure Australian retailers are not disadvantaged by the governments method of collecting tax” is a much more accurate description,and the added cost of ensuring tax collection and compliance overseas should be much more than the 10% that has to be added to the bottom line.
    Small outlets need a point of difference, ie. bundling items into a package, accessorising and innovating are essential now that suppliers have no loyalty and are happy to sell to 20 outlets in a shopping complex. If I find a supplier selling on line even for the same price as I am, I’ll special the goods out and ditch them, I don’t need to be anyone’s gallery for online home shopping.
    De labelling, if there is such a word is another good ploy to stop the bogun shoppers, ie. the ones who love to rub your nose in the fact that they paid $5 less than your price. Most are even too stupid to take into account postage.
    If Myer and DJ,s merge they will just become another Kmart wallmart clone catering to those who shop like sheep.
    We are fighting back but not necessarily in obvious ways and the tide will turn when people realise that being fat, lazy, computer nerds, all living in identical homes wearing identical clothes, bragging that they saved $5 bucks aint quite so cool. We just need to survive long enough. So if you get the opportunity to let the public know that every time they buy they are making a choice about their shopping future it would help. Regards Rob Gibbs. Orbost Vic.

    • Rob, I may be mistaken and if I am I do apologise in advance but I am curious as to why if you say an online presence is an uneconomical waste of time and you won’t deal with anyone that has the same products available online when it appears that you have both a website and an order form allowing purchases to placed online? I would be very interested to hear your thoughts (pros and cons) of your online experience so far as I am sure others would as we are all here to learn. I do agree that there are missed opportunities in price packaging/bundling etc. to create attractive value offers instead of just going on sale repeatedly and innovation is key. De-labelling or perhaps creating house brand items may work in some situations but strong external brands can also offer benefits too.

  3. Robyn ordinarily i would have walked out as I do realise it’s not ideal to speak on the phone in a shop, but I was on limited time and was actually keen to purchase, however as the sales assistant wouldn’t help me with an armful of clothes that I was keen to try on to BUY, it was a little difficult. If you read all of my articles and realised I was a fashion agent you might realise how pro the independents retailers are. Bad service & lack of embracing online I am not. Did you actually read the sentiment at all of the article? I fear the point is being missed entirely by your comment, which is ironic.

  4. Phoebe has a good point about fashion exports. Sadly she looses the plot with her irrelevant mobile phone story at the end which shows a lack of manners.

    • Stephen, interestingly you don’t seem to note the rude service of the sales assistant. Whilst i agree, I usually do speak outside, balancing a handful of garments while being offered no assistance from the so called sales assistant in the interest of making a sale for the retailer was not noted? Nor did the retailer offer to help or take any garments off me.

  5. I completely agree with every point you made in the article. The democratisation of the web has enabled even small retailers to market their business in a meaningful way on a global scale, without the big price tag to match. In this day and age, it’s a foregone conclusion that brick and mortar is only half the equation. If you can’t embrace that concept, it’s inevitable that you will get left behind.
    Moreover it’s incredibly naive to see online shopping as the enemy. Retailers should be seeing the willingness of shoppers to buy online as an opportunity to access new consumer groups to market their own goods. It presents an opportunity to grow your business. It’s a mistake to simply see it as a threat.
    On a positive note, I think that the current state of retail has created room for new up-and-coming Australian designers to carve out a place for themselves in the industry, even with very limited seed money. It’s an exciting time ahead for those who can see different ways to use technology to develop their fledgeling business.
    So why direct your energy to squabbling over domestic consumer marketshare when you can go out and carve out a place for yourself in the global marketplace with the click of a mouse?

    • Thank you Alice for your intelligent feedback, and your insights it was exactly what I was hoping to convey in the article, which it seems you got. I appreciate your response.

  6. I’m shocked Phoebes! I’m always on my phone whilst shopping in stores, not to be rude to the assistant but usually just as I’m busy and if it rings I answer! I’m always still looking- and buying if I like something!- I actually think of it as multi-tasking! Cannot believe you were spoken to that way, what a disgrace 😦

  7. Wow! By some of the comments it is easy to see why some retailers are struggling. It is not your place to overlay your perception of what constitutes good manners in a shop, you are there to serve and to sell. That is how you make money, not by berating customers and chasing them out of your shop when it is hard enough and costly enough to get them in the door in the first place. You are not there to teach etiquette, focus on your primary objective.

    Online is not going away and is only going to keep on growing so deal with it. Online sellers are retailers too. Retail is no longer just about having a physical shop. There is nothing stopping traditional bricks and mortar retailers from selling online as well, and if you say it is not worth it then why are you worried about online retailers, surely they can’t be making any money can they? You don’t get to have it both ways. The retail landscape has changed forever but continuing to just do what you have always done will not cut it anymore.

    Dropping labels just because they are also available online is crazy in my opinion. As more and more traditional retailers eventually get online you will end up with nothing left to stock. The physical shop offers different opportunities, and that is what you should be focusing on when the customer is in the store. Even the online retailers recognise this and are starting to provide physical presences to boost their sales even further.

    Retail in Australia is struggling because for the most part it just has not evolved while the consumer has. If you can, get along to the seminars at Fashion Exposed and learn from some of the great speakers they have lined up. I know I will be.

    • Thanks for your highly intelligent comments Christopher, you have made some really valid points here and we love your input

  8. Thank you so much Phoebes, as always you are giving a well researched educated point of view. Allot of people do not see the bigger picture and although I am not a designer or in retail I understand the other side of fashion with imports and taxing on clothes as my husband is a customs broker.
    I thank you for standing up in the community to give us an educated highlight of what is happening right now in Australian Fashion. I personally love your blog and you will always have critics, but let them. They are reading your page! Anna Mott. x

  9. I was hoping to find a story that match the title but again same old routine shops should have E-com a facebook while no one talk about the real deal.

    Guys, Cols Mayer and wolly-Big W/Target are own the shopping mall space the are the owners of the shopping mall (share hold), the own the production in BD and to cut independent resistance, like us, they sale in under price (very close to production cost).

    and if you think your E-Com will help they will put big $ that you don’t have in Google ad-words and out take your position as well.

    in other country’s where parliament is more independent then the two monster party we have here legislation put in place. (pricing, local brands, commercial street, cross industry ownership etc… )

  10. Pheobes, You’ll notice I left a comment earlier on and I totally avoided the paragraph about the phone conversation intentionally. I just figured you were venting and decided it didn’t warrant attention, but after reading your replies to others I think you’re missing the point. To anyone over 30 your behaviour is rude and your defence of such behaviour is bordering on petulant. Certainly not worthy of someone given the exposure and notoriety that has been afforded you. Shop assistants, other customers, in fact anyone other than the person you are speaking to don’t care to hear the details of your private life no matter how glamorous. Referring to your ignorance of etiquette as multi-tasking is a cop out. The way you berated the assistant and criticised the shop, a shop you claimed to be happy to buy from exposes the fact that you do know you were in the wrong but haven’t the courage to admit it. Please don’t further damage your reputation by equating readers agreement with level of intelligence. Can we take this discussion back to the topic now, please? Regards Rob Orbost.

    • It is a two way street, if only we could teach shop staff including the owners not to answer the phone while they are dealing with a customer or while customers are waiting for service and also to acknowledge you when you are in the store. When I have to ring from within a shop to get attention because answering the phone is given a higher priority than the customer already in the store something is wrong. I am well over 30 and sometimes I take calls while I am in a shop and I appreciate the staff who understand. Customer experience and service is very much a part of the topic being discussed and it is one area that a physical store can excel over its online competition if it so chooses. Etiquette is a fluid thing and it changes as our lifestyles do but if shop staff would rather vent their feelings to a customer instead of working on making a sale then I would prefer to shop at the overseas players stores where they train their staff in customer service or online where I won’t be berated.

      • Chris, If you can see the faults in others you must realise the only behaviour you can alter is your own, so start there. A brief acknowledgement of an incoming call or an “I’ll call you back” is acceptable to anyone on either side of the counter. My only objection is to the use of an article such as this to vent ones spleen, especially when there is no right of reply. Followed by the inference that agreement equates to intelligence. Rob

  11. Hi, I’m the online content manager for EXPOSED Online.

    Thank you to all the commenters for their interest in this article. Phoebes is a long-term columnist of our online publication with years of industry experience, and we highly value her expert opinion.

    While we operate a democratic comment system on Exposed Online and allow everyone to voice their opinion, we do draw the line when those comments become personal.

    Please comment on the topic of the article and refrain from negative comments directed at the author or your comment will be deleted.

    Kindest,
    Sacha Strebe

  12. I am first time reader and was intrigue to hear how the retailers should FIGHT BACK.

    I think you missing the point. online is just another phase of the overall problem and that Australian Fashion and our industry become part of the two headed monster:
    Cols-Mayer and the wolly/TARGET/BIG W group.

    In most countries shops can not own the production line and can not own the shopping mall as well, and certainly not allow to sale under cost price. but here, this guys own the shopping malls (by holding shares), get unbeaten price per M2, and would get you out of business by selling in end of season price all the time ( I take it it their policy) so as for now the independent shop can’t fight back.

    you either retailer, real estate, wholesaler or factory owner not all the above….

    oh …. as far as online, try to put your label on top of Google with ad words and find out who bidding the most….

    legislation is the key if you ask me, but I have very little hope in Canberra.

  13. Recently I was in France at the post office……whilst waiting in line, another customer walked in and answered his phone and started a lengthy conversation, the lady behind the counter asked him to take his call outside……..and he had to leave, she was not going to take no for an answer, I nearly cheered! “that would never happen back home” I thought to myself. Phone manners are out of control in this country, you should have walked out of the shop to take your call……the fact that you thought it rude that someone didn’t want to listen to your call is wrong on so many levels, at least others thought the same, reading the comments and it gives me hope 🙂

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