CEO Bernie Brookes last week announced that Myer aims to beat its online rivals with its new omnichannel strategy, along with several upcoming improvements to its online store.
Last week, Myer‘s CEO Bernie Brookes stated at the annual stockbrokers’ conference in Melbourne that Myer can “beat their online rivals” by offering the best of both worlds.
This statement is hardly anything we didn’t think was possible, as those who follow the online space know that the only reason many of the major online players can have meaningful market share today is because stores like Myer, David Jones, Kmart, Target and of course, Harvey Norman have been slow to embrace and engage with the growing online world.
Perhaps more interesting is the timing of the statement from Mr. Brookes – merely a few weeks after he announced Myer sales were down 2.1 percent this year on a like-for-like basis, and that overall profit for the year would be no worse than 15 percent down from 2011. In the same week, Macy’s announced their quarterly sales had increased 7.3 percent for comparable store sales for the first quarter of the year, with online sales raising by 35 percent. Some incredible sales figures indeed from an economy often touted as not being as strong as ours at the moment.
So why does Brookes think Myer can beat their online rivals? Well, “we’ve got distribution centres, we’ve got links with suppliers, exclusive brands and, more importantly, you can buy it in-store, get it delivered at home and, if it doesn’t fit, you can drop it off in store,’’ he said. Again this isn’t a revolutionary statement – instead, it is something we all knew was possible and occurs overseas at the likes of Marks and Spencer, Macy’s and John Lewis to name a few.
In actual fact, in order to pull off Brookes’s desired outcomes for the online and in-store connectivity is a full-on task. It’s not impossible, but it would have been more impressive had Myer started this process several years ago – taking the lead from overseas department stores and coupling it with Australian innovation to become a market leader in this space.
Last week I, like many other enthusiastic online sellers, attended the Internet Conference on the Gold Coast, where numerous live site reviews were conducted by panels of experts. Myer’s website is currently a bit of a dog’s breakfast, with many basic matters such as titles, content, images and internal search-of-site all needing major attention. Brookes quoted the film, ‘Field of Dreams’ when he said, “if we build it, they will come” and the positive change of presentation regarding online from Myer and Brookes is encouraging. As we all know, having a site is one thing, getting meaningful traffic is another, and furthermore, getting that traffic to buy and continue to buy is a whole lot different.
Myer’s website currently accounts for one percent of its sales, but the retailer is aiming for 10 percent in the future.
“We are comfortable in saying it can be 10 percent of our volume, which runs to $300 million,” said Brookes.
This statement is pleasing to see from our industry point of view. As the more major, trusted brands move online, the more we will see overall sales increase and increased acceptance by those not convinced about the online sales channel. To achieve 10 percent would be quite a feat. To go from less than one percent of overall turnover to 10 percent wont happen overnight, and it is probably wise of Brookes not to put any timeframe on this. So called ‘overnight success stories’ often overlook the 10 years of trials and tribulations proceeding the achievement of success.
Myer’s online sales grew at over 200 percent compared to last year and Brookes says Myer is continuing an “elaborate rollout” of its ‘omnichannel’ approach by increasing stock keeping units (SKUs) to 70,000 over the next few months, as well as linking the Myer One program to the retailer’s website.
“The next part will be a much easier experience to transact. At the moment you have to move through a few different screens to buy something. There will be star ratings on products and there will be much better photography” said Brookes.
Again, this is pleasing from an industry point of view as it would appear he and his team are listening to the feedback from experts and have placed experienced people in the right roles.
The bulk of the revamp will be made between August and October, with the last phase in February 2013. Mr Brookes says the result will be “a full-blown website as good as anything else in the market.”
No doubt we will be watching this space eagerly.
One statement that was perhaps a little out of place was that, “online has arrived at a faster pace than I think anyone in Australia realised.”
I am not sure that this is really the case at all. In 2007, comparison shopping channels such as GetPrice started, we saw US based businesses such as shopping.com venture our way, and locally, Deals Direct, Sold Smart and Catch of the Day were growing rapidly. People have been buying items online since at least 2002, 10 years ago, so has it really arrived at a fast pace?
Regardless of this statement, the overall sentiment from Brookes should be welcomed, as it is pleasing to see a CEO talk openly about his site’s shortcomings and the future improvements arriving soon.