Trends and Position of Retail Industry in Australia

This assignment analyzes the trends and position of the retail industry in Australia, with a focus on department stores and discount stores. Theoretical concepts such as the Wheel of Retailing and Retail Life Cycle are discussed. The historical background of the development of department and discount stores is also covered. The future of the retail industry in Australia is analyzed, with a focus on technological advances, customization, social media, and big data. Examples of major department stores and discount stores in Australia are provided.

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Executive summary
The purpose of the assignment is to demonstrate the trends and position of the retail industry
of Australia. The point of focus in this assignment is upon the department stores and discount
stores of Australia. The examples that are used to demonstrate the dynamics in Australia are
Myers, David Jones, JB Hi-Fi for department stores. For discount stores Kmart, Target and
Big W is used as examples. The trends that are analyzed is the growth of technology with the
advent of the concept of Amazon Go in the international market, growth of customization,
use of social media and utilization of high velocity big data to strategies.

Table of Contents
Introduction......................................................................................................................................3
Theoretical concepts of retail...........................................................................................................3
Wheel of retailing.........................................................................................................................3
Retail life Cycle...........................................................................................................................4
Department stores............................................................................................................................5
Discount stores.................................................................................................................................6
Historical background of the development of department and discount stores...............................7
Future of the retail industry in Australia..........................................................................................8
Conclusion.....................................................................................................................................10
Reference list:................................................................................................................................11

Introduction
Organisations can be divided into a number of segments based on their operation,
some organisation manufacture products; some provide services, some organisations helps
other in distribution while some make sure that the products reach the end customer.
According to Barry et al. (2017), a retail unit is a format in the marketplace where the buyers
and the sellers can meet. One of the main features of retail is the single point of sale directly
to the end customer (Varley 2014). The retail units are responsible for reaching out to the
customers and helping the companies in building a valuable relation with the customers.
There are a number of types of retail units like Department Stores, Merchandise specialized
stores, supermarkets, Warehouse Stores, small independent stores in local vicinity (mom and
pop stores), malls, dollar stores and the latest addition to the list is the e-tailers. In this
assignment the focus is on the discount stores and departments stores (Varley 2014).
Theoretical concepts of retail
Wheel of retailing
This is the concept in retail which phases through a time period of four stages of an
institution that operates in the retail industry. The first three stages explain a gradual
increment in the performance of the company while the fourth stage is the where there is a
new entry in the market. And the wheel continues similarly for the new organisation. The
term wheel of retailing was proposed by Malcom P. McNair (Worrall and Newman 2015).

Figure: Wheel of retailing
Source: (Worrall and Newman 2015)
Retail life Cycle
This concept is aligned with a product life cycle where an organisation is explained to
go through stages of innovation, growth, maturity and decline. The stage of innovation is the
point where an organisation with an innovative business idea enters the market (Davidson et
al. 2002).
Department stores
According to Singh (2013), the retail unit in which a plethora of range of products are
sold under a roof, these products are segregated in departments thereby undertaking the name

department store. These departments have a centralized control and are usually a medium to
large scale business organisation.
As the idea of providing the customers the ease of shopping is the main reason for
establishing a department store, therefore a plethora of options for the consumers have been
placed on the shelves of any department stores (Chen et al. 2015). These may include:
electronics, groceries, clothes, Myer is one of the biggest department store in Australia, there
is a wide range of products that are sold in the organisation starting from beauty and skincare
to household items like kitchen appliance etc. The company has strategic alliance with a
number of organisations whose products are displayed on the store. Various leading
organisations like Apple, Dyson, Chanel, Tommy Hilfiger etc distribute their products with
the help of the brand (Myer.com.au 2018). The business models of department stores are
mostly associated with retail, certain organisations may come out with products of their own
line but mostly they are just a link in between the customer and the manufacturing
organisation (Chen et al. 2015). The companies that operate in the department store format
has the not only deals with the customers but also has to maintain an equally valuable relation
with the suppliers in order to keep the suppliers associated with the brand. For example:
Taking Shape has been named as the supplier of the year by Myer in 2017 as the company
has demonstrated innovative and exceptional product development providing the customers
of Myer a better experience. David Jones is the direct competitor in the market and has
developed over the years to be on one of the significant players in the market that is backed
up by the Woolworths holding limited (Davidjones.com 2018).
Another major department store example in Australia JB Hi-Fi, the company is
known as the entertainment retailer, the business model of this company is that of a
department store but it specializes in electronic goods. The company has an array of products
from a plethora of brands but the basic difference from Myer is that it does not have any

apparel or other domestic household items. One of the significant aspects of the strategic
management of the company is that the organisation has adapted to the dynamic external
environment of the technology and entertainment industry (Ko and Rhee 2014).
Department stores expand their business by opening other stores in other locations
and with the help of diversification. For example: setting up a coffee kiosk in the store etc.
One of the recent examples of diversification implemented as development strategy is of
David Jones (Brook 2018). The CEO has informed that a major change will be made to the
Sydney’s flagship store. In this change a major point of focus is the champagne bar that will
be overlooking the city and also food. All the examples that are stated above are of
established brands that have been in the industry for a long time (Ko and Rhee 2014).
Discount stores
According to Zielke (2014), has described discounted stores as the name suggest
offers products in a very low or discounted price than, the range of products are relatively
lower than that of a department store and the quality is also something that the company
neglects in order to provide the products in such a low price.
Some of the famous discount stores in Australia are subsidiary companies of large
organisations that operate in the retail industry like Woolworth and Wesfarmers. The strategy
of providing the customers with low price requires the organisation to bear a very low profit
margin during the early stages. Therefore back up from big companies help the organisation
to function. K Mart and Target is a subsidiary of Wesfarmers, on the other hand, Big W is a
subsidiary of Woolworths limited (Kim and Jang 2013).
Kmart has a wide variety of merchandise that range from clothing and footwear to
entertainment products, kitchen and hardware items etc. The price of the items is kept at the

minimum and also providing the customers with a better opportunity to select form the wide
range as well (Kmart.com.au 2018).
The products are not only listed at a discount there are also seasonal bigger discounts
which are a part of the marketing strategy. The major threat in the Australian market for the
discounted store market is the international discount supermarket AlDI. ALDI is a German
supermarket that provides the customers with very low price and also assures local produce
for a number of products. The company has set foot in the Australian retail industry in 2001
and since then the company has successfully established a number of stores all over the
country. The format of business is much like a discount store but on a larger scale
(Aldi.com.au 2018).
Historical background of the development of department and discount stores
The development of department stores dates back to 1796 owned by Harding, Howell
& Co in London. The humble setup was divided in four departments for making shopping for
the customers easy (Bbc.com 2018). During the mid of 19th century the evolution of
department stores have been observed. The crystal palace in Hyde Park which housed the
great exhibition was a pioneering design of the way a department store looks like in today’s
market (Bbc.com 2018). In Australia, The Master Retailers’ Association was established in
1903 and the Australian retailers undertook the path that is paved by the American or
European organisation. It can be said that David Jones is the first department store that was
established in the country. The format was quickly picked up by other merchants like Coles
group, Mayer group, Harris Scarfeetc (McArthur 2013).
In Australia Aldi, Big W, Kmart, and Target are the major discount store companies.
The great depression of 1930s was one of the turning points of the retail industry. The
discount stores are developed around this time. E. J. Korvette, established in 1948, is one of

the first recorded discount stores. But this format took off from the late 19th to mid 20th
centuries (McArthur 2013). One of the major examples is the Walmart group whose policy
was to provide people with low price product. And this spread development soon spread to
Australia as well, globalization and the search of opportunity had led investors to believe in
the Australian market and thus marked the advent of discount stores in Australia (McArthur
2013).
Future of the retail industry in Australia
The retail industry has been revolutionized in the recent times due to the advancement
in technology. E-commerce has made both buyers and sellers reach out to a larger market at
just a click. Every organisation now tries to establish one’s online portal or e-commerce
portal. Any product under the sky is now available on the internet and this has changed the
face of retail industry (Grewal et al. 2017). In Australia, people are technologically advanced
and the government of the country also provides the people with the infrastructure to be
updated with the changes in the technology. Woolworths, Wesfarmers etc are some of the
leading organisation in the retail industry; most of the companies that operate under this
parent organisation have their own website through which the customers can choose to buy
the products they want to (Grewal et al. 2017). The payment system has also evolved over the
years where net banking and online wallets have been introduced. Many third parties
associated with these websites to help the customers pay their bills easily.
The companies are focusing more and more on the process by which the convenience
of the customers can be improved. Focusing on the trends of the industry the companies are
becoming more and more aligned with the technological advances and innovations that help
in the sales and thereby reach the desired profit margin. Amazon Inc has been pioneering and
setting benchmarks for the retail industry for the past decade. The company has been on the

major organisation in the international market to make the customers realize the power of
technology and retail. When the company acquired the range of whole foods in America
which is a brick and motor department store, retailers all around the world speculated the
decision. However, the company is nowhere with the future of retail, Amazon Go.
Amazon Go is the next level of retail experience that the customers with prime
membership can enjoy where the company has successfully developed a plan to eliminate the
payment through cash and the hassles of standing in a long queue. According to Grewal et al.
(2017), People with working internet connectivity can just walk in to the store pick up items
and just walk out without hassle. This is what the company has established as the future of
retail. The company has launched two such stores in US but has plans for the Australian
market as well.
Apart from technical advances the future of the retail industry focus on the trend of
customization, the retailers will find that the customers are more inclined to customize
products and will encourage personalization of goods and then pay a certain amount for the
same. Personalized marketing strategies have to be improved by the retailers in order to retain
customers (Grewal et al. 2017).
Companies should also take social media seriously and connect with the customers
and gather feedback from the social media platforms that are simultaneously gaining
popularity (Kumar et al. 2017).
Merchandising and visualization are some of the major aspects of marketing in retail.
However, to be in sync with the trends that have been discussed above the company should
invest in Big data collection and managing high velocity data. This will help the companies
to reach out to the target market in a more effective way. With managing big data the
companies can ensure they implement decisions to engage their customers on a real time

basis. As the changing dynamics of the international retail industry heavily impact the buying
decisions of the customers in Australia the companies should be ready to take quick actions
to beat the threats in the industry (Grewal et al. 2017).
Conclusion
It can be concluded form the above discussion that the retail industry in Australia is
populated with intense competition. Technology has a great impact on the industry and each
of the department or discount stores in the country has aligned the strategies accordingly, the
companies have ensured that they have an online presence and also the security of the
customers while making online payment is also offered.

Reference list:
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Brook, B., 2018. Photo that reveals David Jones boss’ big gripe. [online] NewsComAu.
Available at: https://www.news.com.au/finance/business/retail/champagne-bars-swanky-
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