But, there is a massive difference between packaging a business for sale and retail trading, and since the float Myer has failed to meet retail trading expectations in any material way.
To be a successful competitor in the new world of retail there are five key strategic initiatives Myer needs to embrace.
1. Rediscover what service really means
The historical reason for being of the department store revolves around guided and/or curated comparative shopping. This is about the intimacy of human relationships that create a perception of personal outcomes. Myer’s current model strangles this attribute and until it does the hard work to shake off the chains that bind it, the business will struggle.
2. Make consumer experience special
The new advertising campaign for the business recognises the idea of ‘Wonderful’ but is so out of step with the reality of the shopping experience that it denigrates ‘Wonderful’ to a treasure hunt for products that deliver this feeling. The consumer experience from entry to exit must also deliver a physical and emotional sense of ‘Wonderful’, not a situation where you tolerate a poor experience in the vain hope of finding a magical product yourself.
3. More exclusive merchandise
The merchandise team and the leadership team at Myer recognise the importance of exclusive brands and have taken great steps forward in this area, however, this initiative needs to go deeper.
Scouring the world for exclusive merchandise, not just brands, is the essence of a great department store’s role on behalf of the consumer. The consumer perception comes from individual product exclusivity, not from merely having competitively exclusive brands that may or may not provide exclusive products.
4. Dial down stores and dial up consumer omni-channel
Department stores are at their zenith as big impact emporiums with intimate consumer connections in immersive, magnetic theatres. The 1980s American model expansion into the suburbs destroyed the historical ‘specialness’ of department stores and saw them turn into upmarket discount department stores (DDS) outside their natural habitat of the CBD.
For our population size and frequency of shop, Myer needs to reduce physical store numbers, dial up the physical impact of the surviving stores (see initiative number two) and create a consumer surround omni-channel that creates a communication interface. An information source for the consumer to use and an efficiency model for the consumer to use for ordering, payment, delivery, booking, rewards etc. Integrated seamlessly at the front end, intuitive and ‘Wonderful’ to use for the consumer, real value-adding omni-channel could transform Myer’s consumer relationships.
5. Own life stage events
The best department stores in the world create up to 30 per cent of their sales from life stage events – being seen as the first choice for gifts and gift list registry for the moments that matter in their consumer’s lives and that of their nearest and dearest. Myer has lost leadership in this key area of consumer expenditure and revenue generation (traditionally at higher average finished margins).
While these five critical strategic initiatives are true for both David Jones and Myer, it is the latter that stands the most to gain from using them to re-energise the business.
Myer is the sleeping giant of the sector.
There will be no gain without pain, however, this once great department store business has a real leadership role to play in the future competitive landscape of this country.
Getting its mojo back will realise that place.
Peter James Ryan is head of Red Communication. He can be contacted on (02) 9481 7215 or at www.redcommunication.com.
© Copyright 2014. Red Communication Australia.