News Corporation and David Jones seem to be the two big beleaguered corporates making headlines in Australia right now, the former for its News of the World shuttering, Rebekah Brooks' resignation and arrest and pending British parliamentary inquiry; the latter for its sluggish retail sales, job cuts, profit guidance downgrade and CEO Paul Zahra's carbon blame claim.
The climate is cynical and no amount of window dressing will lure shoppers to the David Jones floor. The old girl, which opened up shop in 1838, is feeling lethargic. Battle weary after last year's Mark McInnes fiasco, the department store is losing out in the retail war, bludgeoned by the internet, discount chains and global economic climate.
At home, there's the carbon tax to think about, which means cost-conscious consumers will tighten the purse strings, and Queenslanders are still reeling after the floods and Cyclone Yasi (the state's economy has predictably hit the skids but retail spending is doing alright buffered by the mining boom), but also the looming threat of a GFC #2 in light of Europe's economic woes, which may have the knock-on effect of sending more cashed-up young Aussies to the continent to reap the rewards (why buy Italian shoes from David Jones when you can get the real deal in Rome?).
But even then, there's the lingering web luring people away from the shopping mall with its shop-at-your-desk convenience, snappy customer service, price-comparison stimulus and savvy marketing tactics. Vogue Australia's Fashion's Night In was a local success, while British chain ASOS is a winner with young women who read SHOP Til You Drop – which recently hosted its Genius Awards, selecting the creme de la creme of female necessities – and might soon check in with cover girl Olivia Palermo's new blog. Not even Miranda Kerr and a Sunday Night showing of her David Jones catalogue shoot and her bloomin' beautiful baby can compete with that.
But the web's not necessarily where it's all at... we will still don shoes and trot off to the shops given the right incentives. Federal Opposition leader Tony Abbott reportedly strategically went off to Harvey Norman over the weekend to pick up a discounted cordless phone and trash talk the carbon tax.
"The customers know and happily tell anyone who wants to listen what’s wrong with many stores – overpriced, underserviced, unexciting and just plain boring," writes The Sydney Morning Herald's Michael Pascoe in his assessment of factors informing the Harry Potteresque gloom in the retail sector, comparing David Jones to the newly installed local edition of "international value frock shop" Zara, which proves that when enticed with the right combination of product, service, marketing and newness (FOMO – aka 'fear of missing out' – gives stores clout), women will travel.
While lower-end chains such as Target, which started the whole "designer wears for a low cost" tactic (buy Stella McCartney stuff for a song!), with a complimentary website, too, have also suffered (the store's first-half profits were down on last year's), Kmart (also owned by Wesfarmers), as Eslake notes, is doing AOK on the mass-market of fashionable goods front: "The cheap stuff now is pretty good, the service has improved, the stores are cleaner, customers are getting discernable value."
Better value for one's buck, in-store ambiance and service with a smile? I'll buy that.
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Posted by Erica Bartle (nee Holburn) at Monday, July 18, 2011