Myer’s omnichannel strategy helps lift profits
One year after rolling out its ‘New Myer’ strategy, the retailer has more than doubled its full-year profit to $60.5 million, growing sales revenue three per cent.
Total sales were up 2.94 per cent to $3.3 billion for the 12 months to July 30, while omnichannel sales soared 74 per cent.
Richard Umbers, Myer chief executive, said the profit was in line with guidance and the results showed that the company’s five-year turnaround plan had made good progress in its first 12 months.
“There is no doubt that as a result of our strategy, Myer is a measurably stronger business today than it was a year ago,” Umbers said.
“Our early progress shows Myer in a new light, where the focus on customers, brands, service, efficiency and productivity is evident in our results.”
The ‘New Myer’ strategy has resulted in a 74 per cent increase in omnichannel sales, with profit growing at a faster rate than sales.
The retailer attributed this growth to a number of factors, including an improved customer experience, a 117 per cent increase in the number of sales made via instore iPads and the launch of the Myer eBay store.
Other digital initiatives include click and collect, which now represents nine per cent of omnichannel sales, and a shoe finder app.
Myer has also introduced new product categories and concessions to broaden its range online. The retailer saw over 60 million visits to its website, thanks to increased search engine marketing to drive traffic.
Umbers said the first year of the ‘New Myer’ strategy demonstrates the complexity of the department store chain’s journey.
“The strong customer take up of our wanted brands has impacted margin and mix. Higher concession sales contribute to improved service and lower costs over time, but reduced gross profit margin,” he said.
Comparable store sales in its flagship and premium stores in Victoria and New South Wales increased by 5.6 per cent.
Myer has introduced over 850 new or upgraded brand destinations since August 2015. It also announced it will exit its Logan store in FY18 and will not proceed with its previously announced planned store in Darwin.
The company has previously announced other store exits as well, in Brookside, Orange and Wollongong in FY17. Myer will also hand back space at stores in Cairns, Blacktown and Castle Hill in FY17 to further drive productivity improvements.
“Our commitment to improving productivity has led to a reduction in operating costs, and we remain focused on re-shaping our store footprint, and investing in stores that align with our core customers,” Umbers said.
Umbers said Myer will be accelerating capital investment in priority stores in 2017.
A version of this story first appeared on sister site Inside Retail Australia.