It's a global mar­ket, thanks to the net

Re­tail­ers are in the eye of the dis­rup­tion storm. But in a con­nected, data-rich world, they have a global cus­tomer base within their reach. A round ta­ble hosted by The Aus­tralian's re­tail writer Eli Greenblat ex­am­ines the chal­lenges

The Australian - The Deal - - Front Page -

Eli Greenblat: Tra­di­tional re­tail­ers such as Myer or Wool­worths have about 5 per cent of their sales online, but they would dream of hav­ing 10 per cent. With Domino’s, you have more than 50 per cent com­ing from online, prob­a­bly one of the largest for any na­tional re­tailer in Aus­tralia. How has that shaped your busi­ness?

Don Meij: Look, it has made our busi­ness more pro­duc­tive. We used to spend 12 per cent on advertising and now we spend about 7 per cent be­cause we’re in a one-on-one re­la­tion­ship with the con­sumers through so­cial media, where we have more than a mil­lion so­cial media fans. From a pro­duc­tiv­ity point of view, the amount of labour we’re able to pull out of the stores, as well as the ef­fi­ciency that comes from the way we’re mar­ket­ing to our con­sumers … I don’t know how we can com­pare it any more be­cause it it’s s been go­ing on for so long, but it’sit s 25 per cent and higher than our cur­rent off­line. So if we do Ap­ple Watch – Ap­ple Watch is ev­ery­where – you can im­me­di­ately con­nect, you can im­me­di­ately go out to your cus­tomers. In the old media it used to take three weeks to be­come sat­u­ra­tion win­ners, now we be­come sat­u­ra­tion win­ners in three or four days. We don’t do prime-time tele­vi­sion any more be­cause it is a neg­a­tive re­turn on in­vest­ment.

You can mea­sure it. Is that im­por­tant to your busi­ness?

Don: There’s so much money on the ta­ble now that we can see our only lim­i­ta­tion is the abil­ity to ex­e­cute … So you just get aware­ness, aware­ness, aware­ness, and then how quickly you can get to all of that and an­a­lyse that. We built one piece of tech­nol­ogy a year in 2006, three years ago we were build­ing three, this year there will be 25 and next year it will go to 40. And each of those is trig­ger­ing con­sump­tion or pro­duc­tiv­ity en­hance­ments or what­ever. So it’s not like: are we go­ing to do it our­selves? We’re go­ing to do it our­selves. Are we go­ing to be a lot more prof­itable? We’re go­ing to be a lot more prof­itable. The pace de­pends on our abil­ity to ex­e­cute. How we’re de­vel­op­ing ourou team, de­vel­op­ing our busi­ness part­ners.

Are Aus­tralian bricks-and-mor­tar com­pa­nies be­hind the United States in terms of online sales, as the per­cent­age of to­tal sales for tra­di­tional re­tail­ers?

Anna McPhee: [Fig­ures show that] about 18 per cent of the last trans­ac­tion done by a con­sumer was online, and the rest was in bricks-and-mor­tar or via mo­bile. Only a rel­a­tively small per­cent­age of the pop­u­la­tion is us­ing online as their pre­ferred type of shop­ping, but it’s all a mix. A con­sumer’s last pur­chase might have been online, but 80 per cent might have been with bricks-and­mor­tar re­tail­ers.

How are re­tail­ers cop­ing with this mas­sive pace of change?

Anna: Re­tail has been dis­rupted through­out time. It con­tin­ues to evolve from the lo­cal fam­ily cor­ner store, to the gen­eral store, to the depart­ment store, to the su­per­mar­ket. Now pure-play online stores are evolv­ing to in­cor­po­rate bricks-and-mor­tar. It’s a sec­tor that’s been un­der con­stant revo­lu­tion or evo­lu­tion.

Pho­to­graphs by: Britta Cam­pion

Don Meij Group chief ex­ec­u­tive Domino's Pizza Anna McPhee CEO, Re­tail Coun­cil

Paul Green­berg Ex­ec­u­tive chair­man Na­tional Online Re­tail­ers As­so­ci­a­tion

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.