E-business Application and the Future of Retail Stores in Australia

This report explores the future of retail stores in Australia, focusing on the integration of e-business applications to meet evolving customer needs and expectations. It discusses the challenges faced by the Australian retail industry, including sinking consumer confidence, rising operational costs,...Read More

Running head: FUTURE OF RETAIL STORES
E-business applications
Name of student:
Name of College:
Authors Note:
1

FUTURE OF RETAIL STORES
Contents
Introduction.................................................................................................................................................3
Discussion....................................................................................................................................................3
Conclusion and Recommendations.............................................................................................................6
References...................................................................................................................................................7
Appendices..................................................................................................................................................9
2

FUTURE OF RETAIL STORES
Introduction
In this report the future of retail stores operating in Australia is presented which in order to build
effectiveness needs to incorporate technology to deliver adequately to fulfil evolving customer
needs and expectations. Example of Myers is taken for discussion and their existing operations,
technological adaptations for future and recommendations to become more effective in future
through application of internet technologies have been provided for better understanding.
Discussion
The Australian retail industry is battling hard times in recent years as the confidence of
consumers is sinking and flowing back making the retailers face soaring costs to operate their
business. Adding to their tough conditions is rapidly growing technology which is evidently
blowing off retailers in Australia. Moreover as the online retailing is marching it has made the
traditional physical stores and conventional brick and mortar retail environment struggling to
beat competition being exposed from foreign and e-commerce retail. Also spending of consumer
in-store is growing weak as their confidence has dropped to a low and this shows only weak
signals of recovery in current conditions. And as retail rent costs are upsurging in Australia and
among the most expensive in the world along with high local wages and rising cost of Australian
sourced inputs, altogether this has put retail industry in a struggling point. Because of such
challenging situations many retail giants such as Darrell Lea and Retravision have disclosed
voluntary administration and several prominent retailers such as Speciality fashion Group,
Billabong, Dick Smith and Harvey Norman along with some small-mid size names are shedding
employees and closing stores in an endeavour to stay drifting (Perlich 2014). Hence it’s clearly
probable that Australian retail industry has arrived at a tipping point and uncertain consumer
behaviour coupled with hard bitten economic conditions and lowering profits are compelling
retailers to re-think the manner they can operate and deal with this condition in future. It is no
longer sufficient to have a stable brick and mortar presence as the scenario is changing and
retailers are required to adapt too so as to survive strides of time.
3

FUTURE OF RETAIL STORES
Irrespective of the fact retailers in Australia like it or not, the reality is that local retail landscape
is rapidly changing from brick and mortar to brick & clicks and purely e-tail. According to Baggi
(2014) this evolution of retail is continuing and has a considerable ramification for those who opt
not to flow with tide of pace and change. Already several retail business in Australia have started
e-commerce journey with huge success and there are some highly competitive e-tail stores that
are real threats for conventional retailers. While there are also few who have begun e-commerce
integration and are yet to settle issues such as data gathering and evaluation or digital marketing.
Still there are handful retailers who are yet to execute online sales channels. As stated by Blitz
(2016) in this wide backdrop of adoption insights of retailers and/or of e-commerce it is
compellingly found that retailers in Australia are slow to adapt to a dual brick and clicks
archetype and most of them still are not in a condition to compete on a level playing field with
foreign and local online only rivals. However the good news is that retailers in Australia are in
overall planning to enhance their investments in e-commerce integration and this should balance
delivery of competitive priced products against endeavour to stay profitable. This is because of
the fact that any expansion move should be commercially feasible and should not be done just
for face of business growth, so that the online stores correlate and support existence of physical
stores too and does not disassemble offline sales.
According to Gorrell (2016) with change in customer expectations and augmentation of online
retailing customers have grown more informed and seek for variety, quality and experience.
They do not look into shopping for purpose of acquiring products but seek for rather more of
personalised experience, convenience and smooth shopping that is more exiting compared to
online platforms. So physical stores need to adapt to this change of expectations to create
moments of excitement and experience that is more intangible in nature. Hence the future of
retailing both online and offline relies on distribution of experiences rather than distribution of
products. To ensure this transformation into reality the need of hour is integrating physical retail
stores with disruptive power of digital innovation to enhance more exposure to customers.
Operations of Myers
Myer is an upscale retailer in Australia that is focused on carrying the love for shopping and
transforming it into life with refreshing stores and offerings that are significant to customer’s
choices of lifestyles. According to Mathew (2016) Myer’s is biggest full range department store
4

FUTURE OF RETAIL STORES
within Australia with over 60 outlets in some of the posh destinations. Myers owns popular
labels like Marcs, David Lawrence and sass & bide. The customers pay a visit to Myer stores
over 130 million times in a year and their online platform appealed over 70 million user sessions
in 2017. The majority of Myer’s operations are currently situated within Australia and includes
Myer department stores, saas & bide, Marcs and David Lawrence standalone boutiques and
concessions in supplementary department stores. They also operate their business through four
distribution centres and a support office in Melbourne. Apart from Australia Myer’s have two
sass & bide boutiques in New Zealand, sourcing offices in China, Hong Kong, India and
Bangladesh with over 68 teams. The materials are transported to 6 third party hubs for
amalgamation and arrangement before being shipped to Myer’s distribution facilities in
Australia.
Technology adaptation for future effectiveness
As opined by Veloso, Magueta, Fernandes and Ribeiro (2017) in order to respond effectively to
changing customer expectations and habits specifically in context to digital retailing Myers can
prioritise their investments to build their omni channels for future effectiveness with more
synchronised digital and data integration with technological analytics and learning so as to
reinforce productivity and efficiency. According to Pawluczuk (2017) Myer can further optimise
their outlets with digitalization and not just extending to brick and mortar but through leveraging
experiences in physical stores itself with technology that is not separate from omni channels. For
effectiveness Myer needs to make their store retail design seamless with par to global
experiences as offline stores cannot have a breakpoint at street or online level. So Myers needs to
create and seal the gap through impersonating digital experience in-stores by making a
combination of fulfilment centre, showcasing and experiential theatre with technology
integration to make stores of future. According to Dumitru, Jinga, Mihai and Stefanescu (2015)
Internet of things (IoT) can be adapted in stores that will enable Meyer stores use devices like
sensors to connect with customers to understand their purchase patterns through motion, voice
command etc. Also artificial intelligence (AI) and machine learning with IoT enabled devices
can be used to build effectiveness through correctly predicting with high degree of certainty what
customers would buy tomorrow. It will also help to respond and improve physical world of in-
stores with implementation of IoT that would fulfil high expectations of shoppers.
5

FUTURE OF RETAIL STORES
For example according to Kumar, Anand and Song (2017) advances in technology can be used in
device tracking for reorder and self learning customer analytics process which can help Myers in
future to align their offerings that meets buying needs of customers and deliver them timely to
influence a purchase, or can be used to expedite purchase process with efficacious customer
inputs. This analytic information can be used by Myers in future to re-configure their outlets,
offerings and promotions matching to customer preferences and behaviour which would enhance
sales and margins. According to Pan, Nam, Ogara and Lee (2013) Digital shelf labels can be
used to display more than product prices and can be integrated with IoT to provide promotions
and other inputs in display at a click through reliable, real time commercial analytic displays.
Also they can be used to display inputs around the shelf such as movement of stocks, customers
behaviour all collected in analytic systems that can be used in future to make decisions that can
be of value for both Myers and customers. These customer data powered with technology will
strikingly reinforce customer relationships thus building brand affinity and delivering a more
ingrown shopper experiences.
Conclusion and Recommendations
Thus it can be concluded that in order to make operations and store process more effective in
future Myer needs to build online like convenience to be mimicked in-stores to meet customer
expectations who have less of time with use of technology. Some recommendations include
building mobile check out facilities in-stores where customers can be provided with handsets for
scanning and packing their products as they move around stores. These in-store technologies will
boost to meet customer expectation levels with realisation models that are emerging rapidly with
advances in technology. Example, tablets can be given to relieve store associates and
management by enabling information at fingertips of staffs that will even help to bag sales
through ordering out of stock products online. Also, early pilots which are technology to close
the gap between online and in-store experiences can be used by Myers to compete with non store
realisation models. Thus using these recommendations will help Myer to deliver real customer
experiences with end to end view of customer that will meet their expectations.
6

FUTURE OF RETAIL STORES
References
Baggi, S. (2014). The revolution will be digitized. Journal of Direct, Data and Digital Marketing
Practice,[Online] 16(2), 86-91. Retrieved from: doi: http://dx.doi.org/10.1057/dddmp.2014.60
[Accessed 22 Sep. 2018]
Blitz, A. (2016). Beset by the digital revolution successful retailers embrace technology that
enhances customer value. Strategy & Leadership,[Online] 44(6), 16-24. Retrieved from
https://search.proquest.com/docview/1844597819?accountid=3055 [Accessed 22 Sep. 2018]
Dumitru, V., Jinga, G., Mihai, F. and Stefanescu, A. (2015). INNOVATIVE INFORMATION
TECHNOLOGIES AND THEIR IMPACT ON THE PERFORMANCE OF THE ENTITIES
WHICH ACTIVATE IN THE RETAIL INDUSTRY. Amfiteatru Economic, [Online] 17(39),
520-535. Retrieved from https://search.proquest.com/docview/1679400505?accountid=30552
[Accessed 22 Sep. 2018]
Gorrell, C. (2016). Quick takes. Strategy & Leadership,[Online] 44(6), 51-56. Retrieved from
https://search.proquest.com/docview/1844597850?accountid=30552 [Accessed 22 Sep. 2018]
Kumar, V., Anand, A. and Song, H. (2017). Future of retailer profitability: An organizing
framework. Journal of Retailing, [Online] 93(1), 96-119. Retrieved from: doi:
http://dx.doi.org/10.1016/j.jretai.2016.11.003 [Accessed 22 Sep. 2018]
Mathew, B. (2016). Marketing to the big middle: Establishing Australian discount department
stores. Journal of Historical Research in Marketing, [Online] 8(3), 416-433. Retrieved from:
https://search.proquest.com/business/docview/1827620670/fulltext/F77593A5E97841B5PQ/1?
accountid=30552 [Accessed 22 Sep. 2018]
Pan, Y., Nam, T., Ogara, S. and Lee, S. (2013). Adoption model of mobile-enabled systems in
supply chain. Industrial Management & Data Systems,[Online] 113(2), 171-189. Retrieved from:
doi: http://dx.doi.org/10.1108/02635571311303523 [Accessed 22 Sep. 2018]
Pawluczuk, A. (2017). INNOVATION IN THE SHOPPING PROCESS IN THE
HYPERMARKET. [Online] pp 731-737. Paper presented at the International SDcientific
7

FUTURE OF RETAIL STORES
Conference on Economic and Social Development- Building Resilient Society, Zagreb: Croatia.
Retrieved from https://search.proquest.com/docview/2070396356?accountid=30552 [Accessed
22 Sep. 2018]
Perlich, H. (2014). AUSTRALIA'S 'TWO-SPEED ECONOMY'. The Journal of Australian
Political Economy,[Online] (72), 106-126. Retrieved from
https://search.proquest.com/docview/1503534095?accountid=30552 [Accessed 22 Sep. 2018]
Veloso, C. M., Magueta, D. M., Fernandes, P. O. and Ribeiro, H. (2017). THE EFFECTS OF
CUSTOMER SATISFACTION, SERVICE QUALITY AND PERCEIVED VALUE ON
BEHAVIOURAL INTENTIONS IN RETAIL INDUSTRY. [Online] pp-330-342. Paper
presented at International Scientific Conference on Economic and Social Development, Madrid.
Retrieved from https://search.proquest.com/docview/2071305609?accountid=30552 [Accessed
22 Sep. 2018]
8

FUTURE OF RETAIL STORES
Appendices
Fig: Insights of Retail executive for future effectiveness
Source: ey.com (2018)
9

FUTURE OF RETAIL STORES
Fig: Steps to meet evolving customer expectations
Source: ey.com (2018)
10