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Being a relevant retailer – The investment imperative

Omni channelI was struck in the last two weeks by the lessons apparent from two media articles which highlighted the risks and the opportunities for all retailers in the age of the connected consumer. Those who’ve followed my blog posts and articles over recent times will know of my pre-occupation with the principle of “retail relevance” and the imperative for  all consumer-facing businesses to reinvent how they engage with customers. This recognises that the power in the relationship has shifted fundamentally to the consumer, enabled by access to information and choice, facilitated by consumer-orientated digital technologies. If retailers do not respond, they will become irrelevant to their customers and will perish.

The answer must be to support consumers on their omni-channel purchase / use journey, offering a flexible range of research, choose, buy, receive, use and return options enabled by the application of digital technologies. The articles showed how the best retailers are doing just that, and are investing significantly to do so. They also showed that Australia still has a long way to go to catch up with the best global players. The first article : Macy’s Omnichannel Strategy Moving engagement as well as sweaters highlighted Macy’s drive to invest in omni-channel capabilities as a fundamental plank of its business strategy. This isn’t cheap mind you and would not make an attractive business case as a standalone initiative. However innovations such as free shipping, same day delivery, a visual search  app based on product photos submitted and a “my wallet” app allowing consumers to store offers and payment options is putting Macy’s right at the centre of its customers world. The result is strong. like for like sales growth in the last 12 months, the scale of which many department stores would kill for. The message is clear – rethink how consumers which to engage, invest in omni-channel capabilities and customers reward you across all channels.

The second article was even more stark in its message for Australian retailers. Earlier this month, The Age Money section carried an article comparing Myer with Nordstrom. Nordstrom has long been the “poster child” for omni-channel retail, and a great example of a traditional bricks and mortar retailer who “gets it” when it comes to digital. It has been on the omni-channel journey since 2006. In fairness to Myer, its CEO Bernie Brookes also understands the imperative of moving to an omni-channel model. Myer has made strides in the recent past to improve its “buy anywhere, fulfil from anywhere” capabilities, renewing its ecommerce assets and investing in Distributed Order Management technology.

The relative performance of the two however is stark – Nordstrom almost doubling its share price over the past 5 years, based on 50% sales growth, while in the same period Myer’s share price has halved on the back of stagnant sales. Nordstrom has moved far beyond a great website and click and collect offer to invest in digital enablers for its customers in-store. These include a scan and pay mobile app allowing customers to pay on the spot and avoid check-out queues, a free home shipping from store option, personal shopping assistants, a “return anywhere” option across its three retail brands and a “Trunk Club”service shipping personalised collections for try at home trial. Spending on these initiatives and other capabilities has been at eye-watering levels, as Nordstrom seeks ways to “adapt and survive” in the new retail landscape. While this may mean short term pain and concerns for shareholders, Nordstrom’s customers recognise and appreciate the shift, stay loyal and spend more.

Australian omni-channel; retailers can and should copy these initiatives in order to stay relevant and thrive. Many are doing just that, including furniture retailer Domayne.


Domayne’s “Live ”tool allows consumers to use its website product images in conjunction with their own tablet or mobile devices to create an interactive online showroom – effectively positioning Domayne’s products right into the home of its potential customers. The benefits to Domayne are three-fold – removing a barrier to purchase, offering loyalty-boosting convenience for its customers and creating a touchpoint for deep consumer engagement.

There are a potentially bewildering range of enabling technologies from which to choose. In order to ensure investment is most effective, it is imperative to start with mapping the customer journey and then seek tools and enablers which can add value and create loyalty within that context. This approach can maximise return on investment and clarify the path to take. Concerns around these two barriers often result in inertia. The time to move, however, is now.


Andy Powell is a Director at Agile Commerce Consulting. He works with consumer facing businesses to help them adapt and thrive in the era of the connected consumer. He has been working with omni-channel retailers since 2005 and has advised Target, Australia Post, Adairs, Coles Super AMart, Myer, Repco and Landmark. He is a three-time judge of the Online Retail Industry Awards.

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