Umbers hasn’t ruled out selling on Amazon
Myer CEO Richard Umbers isn’t ready to give up on his ‘New Myer’ turnaround strategy, despite missing sales-per-square metre and annual sales growth targets for FY17 last week.
Umbers told Internet Retailing’s sister publication IRW last week that “nobody’s saying the strategy isn’t the right one. If you look internationally, no one’s doing anything that we’re not doing. The benchmarking exercise suggests we’re on the right path.”
Instead, he said the market has changed significantly since the ‘New Myer’ strategy was unveiled two years ago.
“Customers are changing, millennials are coming into the workforce and spending, online players like Amazon are arriving […] At the same time, we haven’t seen the growth that some people were expecting economically,” he said.
Umbers also noted the dramatic uptick in customers shopping online, with Myer reporting a 41 per cent increase in online sales in FY17.
All of these factors have informed Umbers’ revisions to the ‘New Myer’ strategy, the full details of which will be announced on 1 November.
“We’re looking at strategy all the time, and if the facts are changing, we should be changing what we’re doing and emphasising those parts of the strategy that are working,” he said.
“I’m suggesting we should be doubling down on [e-commerce]. Linked to that is the increasing importance of data, including personalisation and localisation. The use of data and the Myer One [loyalty] program are areas we can dial up in the business.”
Over the past year, Myer has invested significantly in improving its online shopping experience, increasing its range by 48 per cent and upgrading its search and checkout functionality.
It also added Afterpay, a buy now, pay later service, at checkout, which drives an “impressive” proportion of online orders, according to Umbers, who also credited Ebay as an important factor in Myer’s online growth.
As the company looks to ramp up its e-commerce game even further, same-day and next-day delivery will reportedly play an important role in Myer’s future.
The Amazon question
While many of these improvements seem geared to better position Myer ahead of Amazon’s arrival, the department store retailer recently announced a deal to sell Amazon Kindle devices in-store. And some have questioned the wisdom of helping Amazon gain loyal customers.
But Umbers doesn’t see it that way.
“If you think about it, there’s already a significant scale to Amazon in Australia. It’s already one of the biggest online sellers into Australia. A large portion of the population who shop online already have an Amazon account,” he said.
“We want to sell what customers want to buy. [Kindles are] an important part of consumer electronics and home, so if people want to buy them we should have them.”
Umbers also expressed the belief of many e-commerce players that Amazon will ultimately grow the online retail space.
“We’re well placed to be a beneficiary of a growing e-commerce pie. I would argue that the better structured resourced players in the marketplace – which includes us – will win out,” he said.
“It comes down to do you fight the tide or go with it? We’ve already demonstrated that going with the tide can lead to growth. I’m just saying we’re embracing all of that,” Umbers said.
Umbers said he has not yet decided whether Myer will sell on Amazon, but he has not ruled it out.