Rumours abound that British department store Marks and Spencer will be arriving in Australia, with speculation of the move fueled by the search for an Australian ad agency.
AdNews broke the news last Friday, with a senior agency executive telling the site of the development.
“As far as I can tell, M&S hasn’t decided on which agency to appoint,” the anonymous source claimed, “and in terms of opening, well, no-one knows the exact date, but it will definitely happen soon.”
Retail Doctor Group CEO Brian Walker agreed, telling SmartCompany the brand coming to Australia was ‘absolutely… a given.”.
Founded in 1884, the upmarket brand currently trades in fashion and fine food, operates in 50 countries around the world, employing over 85,000 people. The brand has already been doing business in Australia for years through its online channel, which Walker cites as important intelligence going into their new physical presence.
“They know the market here,” Walker told SmartCompany. “They know through their online sales and online intelligence that this a good market for them.”
The move is a big threat to the market dominance of Myer and David Jones, already operating in a crowded duopoly in Australian department stores. Between a significant English-born population in Australia, the pre-established brand recognition from the online channel, and the upmarket grocery department Marks and Spencer are known for that has gone largely neglected by the two major brands here, could see Marks and Spencer flourish in Australia.
“The food offering has largely been left alone by department stores, relative to Marks and Spencer and Harrods,” says Walker. “I can only assume they’ll bring that element, which has been missing from the Australian market.”
The path to entering Australian retail is largely set out for Marks and Spencer, with other international retailers H&M, TopShop and Uniqlo having blazed the trail for them in recent years; following their form it’s likely M&S will open their first and second stores in Sydney and Melbourne, before a third in Brisbane and then expanding out to Perth. Walker believes it will be a slow and steady progression.
“I don’t think there will be a plethora of Marks and Spencer stores,” he says. “They’ll first see how the Sydney and Melbourne goes and boost their online presence.”
Rumours of Marks and Spencer’s plans arrive in the wake of a recent report by Deloitte, claiming that 2015 will continue the previous year’s trend of international retailers taking opportunity of the weaker Australian dollar to establish a foothold in the Australian market.
“As major global players continue to enter the Australian market, and existing global retailers expand their store footprint, Australian retailers across all segments will continue to face significant challenges and increased competition,” said Deloitte Australia Partner, David White, to SmartCompany. “The ability to innovate, drive improved processes and to connect with the consumer will be critical in order to remain competitive.”