Australian Business

March - Innovation in Retail

March provided some new developments in the online space. Fierce competition is effecting some online sectors, such as fashion apparel which has seen an explosion in on-line fashion businesses. For that reason large dollars are being invested in new technology in order to protect their market share by enhancing the shopping experience. Despite the general saturation in the fashion space, the online menswear retail market has enjoyed solid growth over the past five years, due to a surge in demand from fashion-conscious male consumers.

This trend is expected to continue as research house IbisWorld suggests that men are generally less interested in the social aspect of shopping and happy if they can spend less time to find what they are looking. Technology that saves time permits male consumers to purchase from the comfort of home or office. In line with this, smart e-tailers are looking at ways to encourage customers to convert browsing into a sale.

One example of keeping at the forefront of on-line retail technology is the release by InStitchu of 3D body scanners that can measure customers for a custom suit. The new 3D body scanners, which have begun rolling out to shopping centres around the country, would help Australian men design a suit tailored to their exact measurements in a matter of minutes.

Another development to aid the online conversion, is the Paypal launch of the fingerprint payment authentication application on the Samsung Galaxy 5. The biometric feature means users will no longer need to remember passwords or login details across millions of PayPal merchants.

Success also comes with scale such as with Swedish fashion house H&M which continues the multi-channel approach. The group has planned increased presence in both bricks and mortar stores and their on line presence in Asia and online. According to management in 2013 the group had 3132 stores globally with plans for a further 375 in 2014, including outlets in new markets such as India, the Philippines, and Australia.

It will be interesting to read of the take up of the new technology but the research suggests that as new generations are more comfortable with on line buying and new technologies the success of innovation will translate to revenue improvement.

Australian Retail

Retail in Australia over the last 12 months has been the subject of interesting discussion and also shown some interesting results. Much of the Australian experience is equally relevant to other jurisdictions given the globalisation factor.  For some years now  there has been much talk about the ability of the bricks and mortar retailers to survive in the wake of the online onslaught.

What has emerged however is something quite different. Retailers & E-tailers both need to adapt and use multi-channel strategies to succeed. In Australia while on-line sales have grown, it has not stopped the inroads (some may say invasion of the overseas retailers who are opening with a bricks and mortar presence.

What is true is that todays shop is far from conventional. What we have learned from the various strategies adopted is that shopping is not merely an action. It is an activity, an experience, a destination that people want to enjoy. Much more than simply a point & click experience and equally much more than the department store retailer or high street store of the last 20 years. What is clear (unsurprisingly) is that people want interaction with other people as well as the latest in electronic connectivity. It is the blend of the 2 that has seen the successful strategists think outside the square in blending retailing with people and technology, including social media. This should not surprise anyone. Some basic research will show that well and truly before the internet and home computers there were studies as to what makes people want to shop in a particular store .


We know clever strategies are out there but if you’re not constantly reviewing and re-evaluating, its  like star gazing . You know something is out there but not sure where or how to get there yourself .

One example being a 1972 study  “PERSONALITY AS A DETERMINANT FACTOR IN STORE CHOICE” and this is only one of many. What the paper determined is not relevant here but rather that the individual as a shopper with very human traits is the relevant consideration.

We now see how on-line and in-store strategies strive to appeal to consumers very human traits by offering “personal interaction” as the experience not just on line interaction i.e. more person to person connection as part of the shopping encounter. These strategies include in store experiences that drive imagination and interaction, advance previews in store and child activity areas .

Personal service, a thing of the past or is it ? What we now see is that people seek out good service. There is no substitute for good product or services that are being offered but the old school approach of a customer being able to spend real face to face time with someone who will help, explain and do so in a manner that shows a real interest cannot go unnoticed.

Apple is the obvious example. A computer leader that has built a retail experience that other retailers think they can only dream of. Before you think that such strategies can only be afforded by the larger corporates like Apple, think again.

One example in Australia is Harrolds –the luxury store for men. Walking in to a Harrolds store is a service experience that would have to make them a leader in the “in store experience” stakes.

Put simply, there is a drive to attract you into the bricks and mortar stores and to keep you in store by delivering much more than just inventory. The in store experience needs to deliver an immersion into service and offerings without being confusing . No one said it was easy but ignoring it isn’t going to work.

Story in the US is another example of really thinking outside the retail square. Staying ahead of the curve for Story requires shutting the store down every 4 – 8 weeks for a 2 week period for a total re-fit out. The time frame may not be the same for all locations but the idea is adapted to the location. Easy? No. Successful? It has worked for Story.

Despite the diversity of opinion as to what strategy works best and how this can be best achieved one point is without doubt incontestable. Foreign retailers who are coming to Australia as well as Australian success stories wanting an improved bricks and mortar presence in a strong location are numerous and they are spending up big on the bricks and mortar stores.

The evidence : International retailers having set up bricks and mortar shops in Australia

UK headquarters

  • Rapha
  • Marks and Spencer
  • Top Shop

Spanish head quarters

  • Zara

US head quarters

  • Pottery Barn, Pottery Barn Kids, and West Elm
  • Victoria’s  Secret

Italian head quarters

  • Luxottica has opened the world’s largest Sunglass Hut in Sydney

Swedish  head quarters

  • H & M

Japanese head quarters

  • Uniqlo
  • Muji