lift your game or die
There are more than 25,000,000 people living in Australia today, and it is estimated that there will be more than 27,000,000 by 2022. The Australian market is growing and rich will opportunities. This is the last of five thoughts considering some of those opportunities.
There are a number of very good reasons why retail sales are under pressure in Australia today. These include:
- International brands entering the country
- Online shopping
- A shift from buying goods to buying experiences
- The high cost of utilities
It is the first of these issues I will explore here.
In the past 5 years we have seen a plethora of international brands (retail and other sectors) enter the Australian market. Among these have been retail giants Zara and H&M. These followed earlier entrants such as Costco and Ikea. They will, in turn, be followed my more international brands such as Bottega Veneta and Lanvin.
Many other international brands are set to enter the Australian market. This will make it even harder for local businesses.
CBRE estimate that 1.2 million square metres of space will be leased to international retail brands over the next 5 years, while up to 10,000 local businesses will close their doors.
The fact is, the market is not big enough to accommodate all of the international brands that want to come to Australia and the raft of roughly comparable businesses that are already here. Something has to give, and chances are it will be local business.
Ask yourself, within the relevant fashion categories, how can Myer possible compete with Zara, when the latter offers better priced stock, a higher stock turn, more attractive stores, better trained staff and a better shopping experience? The once great Myer brand is no longer great, while the Zara brand has 1400 stores around the world, effective vertical integration, and a superior understanding of its customer.
I suggest that Myer will not survive. Why would it? How can it?
What the influx of well-run, well managed, customer focused brands (including Amazon) says to me is that Australian businesses will need to get with the programme or get out of business.
In 2018, lift your game or die.
Every year – put the facts ahead of intuition and guesswork.
Sources or core statistics – Ragtrader, Statistica, Buzz Feed, Base, Outback Australia, ABS, CEPAR, Living in Australia, Start-up Daily
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