competitive landscape has changed in the last five years. Of that there is no doubt. The globalisation of the retail sector has seen vertically integrated brands enter the Australian market bringing a new price point, accelerated speed to market and buying power that is a force to be reckoned with. The mini-major internationals (H&M, Zara, Uniqlo, Forever21) have the ability to take fashion from runways to stores in only six to eight weeks. This is in stark contrast to traditional Australian fashion brands where concept to store can take six to twelve months to materialise. As a result, Australian consumers are satisfying their appetite for the latest designs online through retailers such as Net-a-porter, Amazon, the Iconic, Asos and Alibaba, as well as turning to the mini-major internationals in increasing numbers. Australian mid-level fashion brands must adapt their business models and improve efficiencies to maintain relevance and compete with the global, vertically integrated brands that are only going to keep on coming. This squeeze on margins has seen the well-documented failure of a number of Australian brands including Marcs, Pumpkin Patch, Herringbone, and David Lawrence. Considering Sydney’s Pitt Street Mall as an example, international mini majors are averaging occupancy costs below 20 per cent whilst domestic brands sit closer to 30 per cent. Landlords too are looking to improve the risk profile of their assets and this has been seen domestic brands replaced with international mini-majors, for example Zara Home replacing Sussan in Pitt Street Mall. Adjacent to Zara Home, we saw Stockland amalgamate 6000sqm for the H&M flagship store, displacing multiple smaller domestic tenants to make way for the Swedish fashion kingpin. Those domestic brands that have enjoyed continued success have adapted to the changing competitive landscape and the evolving customer expectations around price, quality, speed and service. So what can Australian retailers do to become more competitive against the mini-major international retail brands? 1. Domestics brands need to create efficiencies in their store network and consolidate where they are not performing. Many Australian brands have multiple locations in CBD markets around the country where they are essentially cannibalising their own sales to maintain a broader retail network and this has left some over-exposed in CBD markets. In comparison the mini-major internationals typically have just one flagship store in each CBD. Retailers need to think carefully about their secondary locations and ask the question if they are really needed. If they are, choose locations that have complementary retail offerings to their brand. 2. Speed to market is going to become more important and we have seen some Australian retail brands set up logistics stables to compete with online retailing. 3. Product expansion. The rise of the mini-major internationals, has challenged many Australian brands but none more than Cotton On. The vertically integrated fashion group has stepped up by improving its customer experience instore through multiple touchpoints and increasing their expansive product range to include homewares, stationary and travel goods. 4. Experiential retailing. A number of Australian brands have adapted their bricks and mortar presence to differentiate their brand against the rise of online retailing. Retailers both domestic and global have developed experiential concept stores that engage the consumer, a good example of this is LuluLemon who has dedicated floor space within their stores for free yoga sessions. Legoland is launching their concept store in April at Chadstone Shopping Centre in Melbourne, where the bulk of the floor space is dedicated to experiencing the product rather than just consuming it. 5. Brands that have embraced the changing landscape and utilised technology to facilitate a higher number of touch points with their customers have driven brand loyalty. Those brands that are investing in customer service, connectivity and engagement will remain relevant. MJ Bale a direct competitor of Herringbone, has over the last five years increased their bricks and mortar footprint whilst constantly engaging with their customers via digital and social channels, also supporting seasonal sales promotions. The core values of the brand are relevant and speak directly to their target market which has allowed them to continue acquire market share. I don’t see a slowing in the rush of international brands to enter the Australian market. Australia is attractive to international retailers partly because it did not suffer the economic setback experienced by the rest of the developed world following the GFC. While European, North American and Asian economies were all battered by the global slowdown of 2008, Australia did not go into recession. That impressive performance has been consistent and the country is now in its 26th consecutive year of growth. Retail sales growth in Australia has averaged around 4 per cent every year from 2008 to 2016. According to the 2016 Global Powers of Retailing by Deloitte, only 39 of the world’s 250 largest retailers operate in Australia (16 per cent), meaning there is plenty of potential for international retailers to make their mark. Around 10 of those opened between 2012 and 2014. Australia is also attractive as it is a key tourist destination for Asian visitors who have shopping high on the list of activities when in Australia. The forces of digitisation and connectivity are ushering in a fourth industrial revolution that will disrupt the established business models in the retail sector. It is those retailers that embrace these forces of change that will stay one step ahead of the game.