Holmes Institute: HK2042 Retail Management in Australia Report

This report provides a comprehensive analysis of the evolving retail landscape in Australia, focusing on the historical development and current state of department stores and discount stores. It examines the key drivers of change, including technological advancements, shifting consumer preferences, and the influence of international companies. The report offers insights into the future of retailing in Australia, exploring potential challenges and opportunities, such as the impact of online platforms and import strategies. Recommendations are provided to help the Australian retail system adapt to the changing environment, emphasizing the need for flexibility, technological integration, sustainability, and interactive marketing. The report concludes by summarizing the factors contributing to disruption and offering actionable strategies for success in the dynamic retail market. The report is written for the Holmes Institute's HK2042 Retail Management course.

Running head: RETAIL MANAGEMENT
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Name of the Student
Name of the University
Author Note

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Executive Summary:
The purpose of the paper is to understand the changing face of retailing system of Australia.
The paper presented an overview of the retailing system of the country, which included the
history of the segment. The report also discussed about the current changing state of the
retailing system followed by the factors of change like, technological advancement, changing
consumer preferences and increasing international companies in Australian market. The
report depicted the future face of the retailing system by presenting negatives and positives.
The paper recommended practices like being flexible and aware for responding to the
changing needs and technological implications. Sustainable operational system is another
recommendation for the whole retailing system. The paper was concluded by summary of the
reasons of disruption and recommendations.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Background information on retailing system in Australia:....................................................3
Overview of the major changes and developments in Australia’s retailing system:.........5
Key drivers of changes in retail format in Australia:.........................................................5
Future of Retailing in Australia and alternative retail store options:.................................7
Recommendations......................................................................................................................7
Conclusion..................................................................................................................................8

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Introduction
The process that contributes customers for acquiring desirable merchandise through
the existent retail stores and discount stores for the purpose of personal use is known as Retail
Management (Ayers and Odegaard 2017). The main aim of retail management is to ensure
time and value for customers so that they can fulfil their desire or need for specific
merchandise. The main purpose of the paper is to understand the changing state of Australian
retailing with the assessment of evolution of discount stores and departmental store in 21st
century. The paper will include the key drivers that is stimulating changes in retail format of
Australia. In this paper, the future state of the retailing format will be presented with the
projection of any alternative store option in retail option. The paper will be concluded by
summarizing the current and future state of retailing in Australia.
Discussion
Background information on retailing system in Australia:
David Jones is considered as the oldest departmental store with the owner’s name in
Australia, which was started by David Jones. The Welsh merchant had a partnership with the
first retail store in Australia in the year1825 with Charles Appleton for the store Appleton and
Jones. After partnership was dissolved, David Jones established his own departmental store in
Barrack Lane and George Street of Sydney in 1838. The first huge departmental store of
Melbourne was established during 1873 to 1929 as Coles Book Arcade. The store of
Melbourne consisted unit for books, china and glass department, tea rooms, photographic
studio, stationary department, toy department, confectionary units and permanent music band.
There are numerous regional and national discount stores in Australia including, Kmart,
Target, Aldi, The Reject Shop, Big W, Dollars and Sense, Cheap and Chips, Red Dot and

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Shiploads. These were few examples depicting the history of retail stores in Australia. The
scenario of retailing system of Australia have changed majorly by the increasing practice of
internationalization, changing needs of market, import and globalized business environment.
In accordance with the Customer Experience Excellent Report of KPMG of the year 2018, it
has been found that the non-grocery and grocery stores portray best customer experience and
retailing performance. The population of Australia perceive these sectors of retailing as the
strongest in terms of efficiency and product availability. The report demonstrated that Dan
Murphy, a beverage retailer in Australia has the best Customer Experience Index (CX) with
the availability of friendly staff, wide product range, competitive pricing and open store
design. In the non-grocery segment, Bunnings, hardware store portrayed highest Customer
Experience Index in the association of parking facilities, convenient locations, extensive
product range and well-informed employees. Although, these are the positive example in
retailing system of Australia but the all the brands comprising the retailing format of
Australia must adopt continual evaluation process for incorporating changes with the
changing market needs, increasing competition, lower barriers for entrants, changing
technological advancement and enhancing international competition.
The retail shop that offers extensive choices of the consumer goods among different
categories ‘departments’ of products is known as departmental store. The retail shop that sells
goods at lower prices in comparison to typical market price of the product.
Departmental stores sells items like furniture, appliances, toys, clothing, furniture,
cosmetics, home appliances, gardening, sports goods, housewares and hardware. Other
category of product includes, books, food, electronics, jewellery stationary, baby products,
photographic equipment and pet products. The merchandize offerings in discount store
includes similar categories of items but in comparatively less prices than the typical price.

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Departmental store market their product offerings by extensively promoting their
products in physical stores and online presence for competing with the aggressive
competition in the market. The departmental store market their products by reflecting the
wide availability of brands under one roof. The discount stores utilizes the technique of
marketing their products by the strategy of sales promotion. Both the form of retailing system
market their merchandise by adopting location-based advertisement.
Overview of the major changes and developments in Australia’s retailing system:
During the year 2018, the retail sales of Australia grew by 3.7 percent on year-on-year
basis in the association of 3.7 percent growth in previous month (Trent Duvall 2019). The
retailing system of Australia is categorized based on distribution channel, product category,
market dynamics and distribution channel. Around 90 percent of the population of Australian
resides in urban areas of Australia (Intelligentretail.com.au 2019). The retailing system of
Australia experienced positive development without the fact of lower rate of improvement in
the wages and increasing household debt. The foreign organizations are stimulating changes
in approach in the retailing system of Australia. There are major factors on which the
retailing system is dependent, changing the spending pattern of consumers and inflow of the
foreign companies in Australia. Moreover, consumer preferences and marketing approaches
are changing in the country due to the disruption from foreign organizations. With the
increasing rate of technological advancements leads to significant sift on consumer needs and
preferences. The retailing sector grew at a rate of 3 percent, 2.6 percent and 5 percent in
Victoria, South Australia and New South Wales respectively (Trent Duvall 2019).
Key drivers of changes in retail format in Australia:
The key drivers of changes in retailing system in Australia includes:

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o Access for ownership- The changing taste of consumer also include the decision of
accepting products at lease rather than purchasing products, for the purpose of
changing the traditional model, restricting over-consumption and even due to
increasing price ranges.
o Local and ethical- The increasing awareness of consumers regarding the ethical
association with the operational processes. The demand for products, which are
grown, manufactured, farmed, packaged, sourced and designed sustainably.
o Frequency of visit- The frequencies of purchasing products from grocery stores are
becoming a weekly or daily activity rather than visiting once a month. Consumers are
changing the traditional pattern of purchasing products from stores.
o Impact of technology- The introduction of technological advancement have majorly
changed and developed the retailing system of Australia. Stores are introducing self-
check-out system and self-billing system (Kasemsap 2018).
o Online platform- Retailing system of Australia is majorly changing with the need of
convenience among the consumers. Brands (both local and international) are
incorporating online portal for increasing the Customer Experience Index.
o Internationalization- Companies are expanding locally and internationally for
responding to increasing potentiality of the business. The entry of big international
brands in the retailing market may also cause threat for the system, thereby causing
the phenomenon of The Wheel of Retailing (Ducan et al. 2015).
o Importing strategies- Australia is majorly dependent on importing products due to the
high demand for wider options and better quality in affordable options. Australia has
zero import tariff system (Hannan 2018).

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Future of Retailing in Australia and alternative retail store options:
Australia is facing disruption in the retail industry due to various reasons like
increasing rate of businesses from overseas in the retailing sector. Another reason for the
disruption can be the changing consumer preferences and awareness. Consumers are
becoming more affluent with technological advancements. The expectations of the consumers
are increasing due to the improving choices in the market and technological convenience.
Australian retailing system will experience challenges over next five years. The future of
retailing sector is unstable with the increasing competition from international and national
brands. Australian retailing system will be changing with the implication of mergers and
acquisition strategies of Australia. For instance, David Jones is now owned by Woolworths
Group. Retail brands of Australia are adopting the diversification strategy for responding to
the increasing risk of retail sector in Australia, for example of Tesco adopted diversification
strategy (McArthur, Weaven and Dant 2016). The future of retailing system of Australia may
also lead to the downsizing strategy due to the increasing competition and it can be backed by
the fact of lower rate of improvement in wage structure of retail workers. The changing
needs, preferences, increasing disposable income and attractive business market of
Australians are attracting the international retailers to reach the population through physical
and/or online stores (Adapa and Roy 2017). One of the major reason behind the risky future
of retailing system is the decision of eliminating import tariffs from global or international
brands. However, the retail sector is growing with the alignment of businesses with
technology and developed understanding of consumer needs. The retail sector of Australia is
experiencing a stage of maturity and may lead to decline if the companies fails in adopting
technological advancements for accelerated development.

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Recommendations
The recommendations for the risky future of changing retailing system of Australia are as
follows:
o The system needs to incorporate multiplicity and agility of the delivery platforms for
merchandize that reflects the ability of discovering non-responsive retailers.
o The retailing system needs to incorporate continual improvement process for adopting
technological advancements in the operational process for ensuring competitive edge
over the international brands.
o The retailing system needs to transform the operational process on the grounds of
sustainability for responding to the increasing ethical awareness.
o The retailing system needs to include interactive medium in the promotional plan for
ensuring consumer inflow in the stores.
Conclusion
Therefore, it can be concluded from the paper that retailing sector of Australia is
growing but awaits major disruption risks due to various factors including changing
consumer needs, changing technological advancements, increasing rate of international
brands and the decision of establishing zero import tariffs. For sustaining in the market,
Australian retailing system needs to be flexible and aware of the changing needs and
technological revolution in the market.

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References:
Adapa, S. and Roy, S.K., 2017. Consumers’ post-adoption behaviour towards Internet
banking: empirical evidence from Australia. Behaviour & Information Technology, 36(9),
pp.970-983.
Ayers, J.B. and Odegaard, M.A., 2017. Retail supply chain management. CRC Press.
Ducan, R., Bossomaier, T., D'Alessandro, S., Johnson, C. and French, K., 2015, December.
Using the simulation of ecological systems to explain the wheel of retailing. In 2015 IEEE
Symposium Series on Computational Intelligence (pp. 502-508). IEEE.
Hannan, K., 2018. Free trade agreements: How Australian wine benefits from FTAs. Wine &
Viticulture Journal, 33(3), p.64.
Intelligentretail.com.au 2019. Intelligent Retail Australia | Intelligent Retail. [Online]
Available at: https://www.intelligentretail.com.au/
Kasemsap, K., 2018. Retail management and electronic retailing. In Supply chain
management strategies and risk assessment in retail environments (pp. 139-158). IGI Global.
McArthur, E., Weaven, S. and Dant, R., 2016. The evolution of retailing: a meta review of
the literature. Journal of Macromarketing, 36(3), pp.272-286.
Trent Duvall, B. 2019. Future of retail in Australia. [Online] KPMG. Available at:
https://home.kpmg/au/en/home/insights/2018/04/bernard-salt-next-5-years-retail-future-
australia.html

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