Changing face of retailing in Australia

This report discusses the major changes and development in the retailing system in Australia, including the historical development of discounted and departmental stores. It also explores the key drivers of retailing format change and provides recommendations for retailers to increase sales.

Changing face of retailing in Australia

Executive summary
Retailing is a process for distribution of goods which includes all the activities for selling the
final goods to the consumers. It includes the sale of goods from merchandizer to end-user who
uses the product. This report includes the historical development of discounted and departmental
stores. In Australia, retailing systems are changed and their environment is discussed. The major
changes have taken place in Australia from last 5-10 years. Key drivers have been discussed in
the report for the change of retail formats in Australia. Retailers are facing the challenges and
issues in retaining the customers and attracting new customers. Recommendations are provided
to the retailers for increasing the sales for retailers.

Contents
Introduction......................................................................................................................................2
Major changes and development in Australia retailing system.......................................................2
Key drivers of the retailing format change......................................................................................3
The future face of retailing in Australia and alternative retail store options...................................4
Conclusion and recommendation....................................................................................................6
Reference.........................................................................................................................................6

Introduction
A departmental store includes the retailing of consumer goods in a wide variety. Departmental
stores are designed and organized to provide the goods under one roof. A departmental store in
Australia provides various facilities like services of home delivery, phone orders and fair
treatment with customers. It helps in offering multiple choices in merchandising lines. The
concept of departmental stores was established on large scale in France, UK, and the US in
1840s and 50s. Discounted stores are those which provide the goods at low prices. It includes the
retail shops which provide a wide assortment of goods by focusing on prices of goods and does
not focus on services to customers. In Australia, departmental and discounted store has grown in
market (Sutton-Brady, et al., 2015). In Australia, discount stores are Aldi, Red Dot, Kmart, and
The reject shop. In this report, retailing system will be discussed and background information of
departmental and discounted stores information will be provided. The major change has taken
place in retailing system from 5-10 years after the commencement of E-commerce. The analysis
of major changes and development of retailing system will be discussed. The future of retailing
system in Australia will be discussed and analysis of retailing alternative will be done. For
customer satisfaction, the various recommendations will be provided in this report.
Major changes and development in Australia retailing system
A retail system in Australia is important for linking the supply chain between consumers and
manufacturers. Departmental and discounted stores in Australia are undergoing a major
disruption. Systems are changing because of change in technology. Retailers are adopting the
updated technology to compete in market. Retailing systems are changing and developing
because of political factors, social, economic, demographic and technological factors. A change
in retail system includes the change in expectations of customers and the various factors
(Ailawadi, et al., 2009). Demographic change in the system includes the objectives, measuring
population data and quantifiable. It is necessary for the retailer to change according to the needs
of customers. It includes the age, gender, income, education, and employment level of the
customers. Technology is adopted by retailers in Australia for gaining new customers and
increasing revenues but e-commerce is decreasing the sales of retailers. Customers prefer online
shopping in place of shopping from departmental stores. Online retailers are offering discounts to
customers and providing the facilities for home delivery for free. The product, place, price and

time are transforming in retailing and the perception of retailers and consumers changed after the
involvement of the internet in retail systems. Retailers are adopting the augmented shopping in
Australia as customer prefers the shopping. Retailing helps indirectly contacting the customers
and helps in understanding and requirements of customers.
In Australia, the market structure of the retail industry is oligopolistic. Because of phenomenon,
the local traders and retailers are trading online and the economy is changing their preferences
from offline to online customers (Burt and Sparks, 2003). Retailers in Australia are adopting the
competitive pricing strategy as it helps them in growing in the market. Retailers are achieving a
higher level of growth and development in operations. In Australia, there are almost 140,000
retailers which accounts for 4.1% of GDP and employment is 10.7%. The retail industry is
diversifying because of size, retail format, competition and the nature of goods. In past the
competitive challenges in retail industries were more and online retailing and innovative retailers
are changing the trends of retailing. The evolution in retailing is in 1990, the introduction of
technology in supply chain and logistics are done. In 2000, the introduction of data technology is
done in advertising digital metrics and in 2010 introduction of data technology in data, machine
learning and social is done (Fraser and Zarkada-Frase, 2000).
Key drivers of the retailing format change
E-commerce is the reason for changing the retailing format. In Australia, the big-box retailing
format is expected to grow in future. The new regulations help in establishing new formats in
Australia. E-commerce in retailing is taking place effectively and market value in retailing will
be approx. 35.2 billion dollars. In Australia, people prefer to do online shopping and traditional
format of retailing is changing to online retailing. Retailing includes the departmental stores and
discounted stores, as its format is changing and they are adopting the updated technology and
providing the services to customers. In Australia, people are preferring to buy the goods online
as everything is available online at discounted prices. Change in retailing is taking place because
of artificial intelligence. It helps in competitive market to stay updated and earn revenue and
grow in business (Booth and Whelan, 2014). Artificial intelligence is adopted by large
companies as it includes machine learning, AI power and data which helps in expanding the
business in competitive market (Christopher, et al., 2006).

Change in retail format is because of the convenience of customers. In order to experience
shopping, people prefer to do online and do not want to waste time shopping in departmental
stores. Small retailers are merging their business with the online merchandisers to provide the
goods to consumers and increase sales. For the development in retailing, retailers are providing
the products to customers online and physical stores are no longer need for customers (Pantano,
2014).
In Australia, the retail sector is the biggest employer in Australia. Retaining format is changing
because of online shopping as it puts pressure on physical retail stores. Because of constant
change in retail formats, retailers are facing the major challenges and issues for meeting the
needs of customers. In retail format change, retailers face challenges in order to meet the
expectation of customers. It is necessary for keeping up with the change in customer
expectations. It is essential or retailers to changes according to the customer’s expectations.
Customers expect from retailers to maintain customer loyalty. Emerging formats includes
exclusive retail outlets, hypermarket, fast food outlets, and internal retail. Retailing is changing
in Australia as it interplays between the changing of customers' expectations, economic,
technology and social which emergence the new business (Fernie and Sparks, 2004).
The future face of retailing in Australia and alternative retail store options
In order to promote retailing, large retailers are engaging in promotional activities. In retailing,
future store technologies can be adopted for the consumer. In retail marketing, applications of
intelligent technologies can be adopted for the large retailers in Australia as it will help in
creating data warehousing for combining the massive databases. In retailing, the retailers will
unable to deliver the high levels of value relative. Online retailers like Amazon will take over on
traditional retailing process (Gómez, et al., 2007). In future the retail industry will take a shape of
disruptive forces as the change in patterns of spending will be different and the expectations of
customers are changing and it is essential to bring the new approaches in retailing system
(Sandberg, 2010).
Retailers will face disruption in the future. It is analyzed that retailers are required to adopt the
multiplicity and agility of delivery platforms. Small retailers will suffer more as compared to
medium and big size retailers. The key issues that retailing system will face in future are the

technology and tools for facilitating decision making, consumption, and engagement, big data
collection, decisions for merchandising and profitability and analysis (Knezevic, et al., 2011).
Technology evolution has a major impact on the Australia retail industry. It is necessary for the
retailers to follow the desires of the customer for their satisfaction. Online retailers are growing
more as compare to departmental stores. Departmental stores can adopt the strategy to make the
retailing online. E-business and e-commerce will replace physical stores. In future, transparency
will be more when customers compare the prices of goods. Online websites will help the
customers to know about the retail stores (Levy, et al., 2004). Convenience helps the retailers to
provide the seamless retail experience in various channels, offers, and marketing information
which is personalized. In shaping the future of retailing systems, personalization and
convenience play a crucial role in helps the customers. In future retailers will unable to deliver a
high level of value relative. The traditional retailing process will be taken over by online retailers
like Amazon.
In retailing, the retail cycle chain includes the phase of entry, trading up phase and vulnerability
phase. In future, retailers will prefer to sell goods online for growth and profits. In the retail
sector, technology is a new trend which must be adopted by the consumer in departmental stores
or discounted stores. Retailing systems will be different in the next 5-10 years as these stores will
not be preferred by consumers. The face of the Australian retail industry is changing (Zhu, et al.,
2009). In retailing, customers demand for authentic visual content and because of growth in
social influences. The future of retail is online, retailer can emerge their business online as it will
help in growth of business. It is necessary for retailers to satisfy the customers and differentiate
themselves from others. Self-service for researching the products online where the online
services will be provided to consumers and it will be convenient to visit the websites of retailers
and customers in future will not prefer to visit store for shopping. E-retailing will be convenient
for retailers also as it will reduce the cost of location and maintaining a physical store. In
Australia, the future of departmental stores is threatened by e-commerce like Amazon. E-
commerce is taking place of departmental stores and discounted stores as Amazon provides the
products on discounts and offers products on convenience to customers (Roan and Diamond,
2003). In Australia, the retail industry is facing disruption as the businesses from the overseas
market are entering and following the new approaches for retailing. Advanced technology

affluence consumers and their expectations evolve with the change in technology and the
behavior is also changing to buy things from departmental and discounted stores (Kantabutra and
Vimolratana, 2010). In the retail industry, the threats and opportunities for discount stores are as
the discount is becoming prevalent in many stores and the new product line has come from the
last few years. Because of rising competitive pressures, increased industry consolidated is
anticipated (Varadarajan, et al., 2010).
.
Conclusion and recommendation
It is concluded that in Australia retailing systems are changing. Customer satisfaction is the
major factor for retailers and retailers to adopt the updated technology function for their
satisfaction and providing best services to customers. It is recommended to retailers to adopt the
management information systems in business. Retailers can adopt the e-retailer format for selling
the products to consumers on time. Customers prefer online retail shopping as it is convenient for
customers. It is recommended to adopt digital marketing for attracting and retaining customers.
They can adopt the integrated cross channel strategy for the distribution. In recent trend, Amazon
is the popular retail store which is trending and decreasing the sale of traditional retail stores. It is
necessary for retailers to invest in right technology. It is necessary for traditional retailers to
adopt e-retailers' practice in business for running and growth in the retail industry.

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