Retail Management Report: Australian Retail Store Evolution Analysis

This report provides a comprehensive overview of retail management in Australia, focusing on the evolution of retail stores. It begins by defining the retailing system and highlighting the prevalence of department and discount stores. The report then analyzes key modifications in the retail system, including the impact of mergers, diversification, downsizing, and technological advancements. It explores future trends, such as changes in customer behavior and the growth of online sales. Furthermore, it identifies alternative retail outlets like 7 Eleven, ALDI, and COSTCO. Finally, the report offers practical recommendations for the retail industry, emphasizing the development of artificial intelligence, brand marketing, smaller store footprints, and diverse store presentations to align with the evolving retail landscape. The report aims to provide valuable insights for students studying retail management, offering a detailed analysis of the Australian retail sector and its future trajectory.

RUNNING HEAD: EVOLUTION OF RETAIL STORES
Retail Management

EVOLUTION OF RETAIL STORES 1
Executive summary
The report summarizes on the title ‘Retail Management’. The retail system pours lights
on the key elements of Department and discount stores prevalent as major retail stores
in Australia. It is analyzed that Merger, Diversification, Downsizing and technology are
some of the key elements of retail change. From the future face element, it is analyzed
that there will a subsequent change in customer behavior, enhancement in online sales,
technological up-gradation in respect of the retail industry. It is assessed that ‘7 Eleven’,
‘ALDI’ and ‘COSTCO’ are the crucial alternate retail outlets for Australians. Lastly, to
align with the retail industry future, various practical applicable suggestions based on
developing artificial intelligence, brand marketing, smaller footprints stores and diverse
store are given.

EVOLUTION OF RETAIL STORES 2
Contents
Introduction.........................................................................................................................3
Retailing system.................................................................................................................3
Modifications in retailing system.........................................................................................4
Key forces of the retail format change................................................................................5
Future face..........................................................................................................................7
Alternate retail stores......................................................................................................7
Conclusion..........................................................................................................................8
Recommendations..............................................................................................................9
Bibliography......................................................................................................................10

EVOLUTION OF RETAIL STORES 3
Introduction
The research report is prepared on the title ‘Retail Management ’. It is a process that
assists the customers in acquiring the desired merchandised from the retail stores for
day-to-day operations. It emphasizes the elements of retail sales to generate customer
satisfaction (Varley, 2014). The report provides significant information on the retailing
system and its emergence. The next section focuses on the major modifications and
improvements occurred in the retailing system. It also comprises of elements
responsible for the change in retail. It also provides a future face of retailing in Australia.
Lastly, it provides recommendations in favor of retailing system to foster high growth in
the future. The key purpose of the report is to pour light on the evolution of the retailing
system in Australia. It provides an opportunity to upgrade the knowledge based on retail
management.
Retailing system
Retailing is a process in which retailers directly sells the products to the customers in
fewer quantities for their personal consumption (Dunne, 2013). Australia is not a hub of
largest retailer industries but it has specific globally recognized top retailers including
Woolworths. Its high population provides a great market for multinational retail
companies to establish their stores in Australia. This, in turn, leads to the establishment
of ‘ALDI’ and ‘COSTCO’ in the Australian market. Kogan, Booktopia are some of the top
retailers on the digital channels that add up value to the retailing system of Australia.
Retailing generates higher annual revenue with the fine growth rate. Thus, its fine
retailing system has helped the country in achieving a significant position in the global
world (Farfan, 2018).
Department store, Discount stores Warehouse stores and Speciality store are several
types of retailing. Following are the retail stores prevalent in Australia:
1. Department store
2. Discount stores

EVOLUTION OF RETAIL STORES 4
A department store is a retail establishment offering a wide variety of consumer goods in
different product categories known as a department. All its sub-departments are
organized under one roof supervised by diverse authorities. They usually sell ready to
use products including furniture, electric appliances accessories, cosmetics, books,
stationary and processed food items. Some of the popular department stores in Australia
are Kmart, Terry White, and Myer. In order to enhance sell, department stores rely on
advertising, creative display to attract customers (Jefferys, 2011).
A discount store generally offers its products at a price lower than the retail stores. It is
assessed that large discount stores are generally operated in the form of chain stores.
Walmart and Target are popular discount stores in Australia. A discount store offers a
variety of products including apparel and cosmetics. There are also certain discount
stores specialized in specific mechanized like sporting goods. These stores generally
keep on adding more products. These stores apply ‘high volume, low-profit margin’
strategy. Thus, it allows them to offer products at a relatively low price than the
department stores. However, department stores and discounted stores are closely
similar. Additionally, it is examined that discounted stores are becoming more prevalent
than department stores (Gottschalk, 2013).
Modifications in retailing system
‘Wheel of retailing’ and ‘Retail lifecycle’ are the two managerial concepts that assist in
determining the changes and developments in the retail industry.
Wheel of retailing
Wheel of retailing focuses on the pattern of retail development. It states that retailers
enter the market with low margin, low priced and low status and gradually attain a higher
position in the market (Akehurst, 2013).
Example: ALDI was founded in the year 1946. It had initiated its operations by selling
low priced products in the Australian market. At present, it is one of the recognized retail
stores among Australians. Additionally, it is also challenging the Woolworths in terms of
market share in Australia (Owler , 2019).

EVOLUTION OF RETAIL STORES 5
Retail life cycle
Retail life cycle states the various stages that a retail stores experience. It has four
stages:
1. Introduction phase
2. Growth phase
3. Maturity phase
4. Decline (Monash , 2019)
Example: Woolworths is an Australia based retail company introduced in the year 1962.
It has a high number of a supermarket chain in Australia. It is examined that at present
Woolworths is at the growth stage of the product life cycle as it is experiencing a growth
of 4.3% in its sale and profit (Pash , 2018).
Key forces of the retail format change
Merger
It is growth strategy of combination of two companies into a single entity (Ray, 2010).
One of the fine examples of the merger in the retail industry in Australia is between
Woolworth's drink and retail business. It is analyzed that merged business will be
operated in the name of ‘Endeavour Group’. It has adopted the merger process to
simplify its organization structure (Masige , 2019).
Diversification
Diversification is a growth strategy in which the company diversifies its activities or
products to expand its operations (Johnson, 2011). Woolworths is a fine example of a
recognized retail industry that has adopted diversification by expanding in the
international market as well as by launching new lines of services. It had expanded its
market in 11 countries including New Zealand, Asia, Europe and Africa (Khumalo ,

EVOLUTION OF RETAIL STORES 6
2016). Besides diversifying its market, it has also expanded its operations by initiating
petroleum industry and food restaurants (Woolworths, 2018).
Downsizing
It refers to the reduction in size of the company to foster organizational growth (Judd,
2014). MYER is an Australia based company. It operates in the form of department
stores selling a variety of products including homewares, clothing and fashion
accessories. It is analyzed that it is shrinking its operations as it is facing a challenge in
raising sufficient profits (Hall, 2014). It was facing a challenge from its rival ‘David Jones’
and other international brands and it resulted in a fall in profit by 80% (Boyd, 2017).
Thus, it has downsized its market by closing its stores in Melbourne and Sydney
(Gettler, 2019).
There are also several other modifications that are examined in respect of the retail
industry in Australia. These are in the form of operations, technology, marketing and
physical store.
Operations
To fulfill the demand of the rising population in Australia, the retail industry is expanding
its services by diverting its operations by launching new lines of products and by
entering a new market. Additionally, it has also altered its channels of conducting
operations. At present, it operates through physical as well as through digital channels
(McArthur, 2016).
Technology
With the rise in technology up-gradation, the retail industry has also altered some of its
activities to remain updated and enable cost saving. The retail industry is launching
convenient stores and offering its services to the global world through digital channels.

EVOLUTION OF RETAIL STORES 7
Thus, technology has assisted the retail industry to expand its market (Heinemann,
2010).
Marketing
With the growing number of retail industries, marketing has become a mandatory
function for the retail industries like Woolworths, Coles and Target. It is analyzed that
retail industries are facing tough competition and thus they rely on social media
marketing, digital marketing, ad campaign and advertising (Layton, 2015).
Physical stores
It is examined there is a high variation in the current retail industry outlets. To cut cost
and to deliver unique customer experience, retail companies are reducing the manual
need by developing digital and self-service in the physical stores. It will provide its
customers with more freedom in their shopping (McArthur, 2016).
Future face
It is examined that gradually customers are becoming more prosperous, busier and
developing the ability to make good judgments. Due to technological advancement, their
expectations are also changing with the retail industry. There will be a subsequent
increase in Chatbots to solve the queries of customers instantly regarding their purchase
in retail stores (Walker , 2018).
It is assessed that within the next five years, the 35% of sales will be conducted through
digital channels and only 65% of sales will be operated through the physical channels
via retail outlets (Walker , 2018). With the coming years, retail store focus will be more
on enhancing the shopper’s experience (Moore , 2019).
It is analyzed that there will be an emergence of new online technologies for the retail
industry that will prove much beneficial in enhancing customer confidence over the

EVOLUTION OF RETAIL STORES 8
product. It is analyzed that customer will experience improved retailing service as there
will be up-gradation in the delivery of goods via online channels. Lastly, it is predicted
that online retailing will provide a high opportunity to enter the global market (Kimmorley,
2015).
Alternate retail stores
Following is the list of Retail Companies that provides alternative retail options for the
Australians in the upcoming years:
1. 7 Eleven
2. ALDI
3. COSTCO
‘7 Eleven’ is an American multination retail chain that provides convenient stores to the
consumers. Recently, it had launched a checkout-free store in Australia that eliminates
the troublesomeness of lining in queues (Sparks, 2013). It had launched a ‘cardless and
cashless’ concept. It allows its customers to pair their payment card with a smartphone
app, scan items with their cameras and walk out. It is also working to remove the
concept of a counter, to provide its customers with better and spacious retail store
experience (Elmas , 2019).
‘ALDI’ is a Germany based multinational supermarket availing higher profits in the
Australian market. It is experiencing a steady growth in the Australian market because of
its high reputation and trust among the buyers (Herbrik, 2019). It is capturing the market
share of its competitors including Woolworths. Thus, it acts as an alternative retail store
for Australians in the near future (Thomsen , 2017).
‘COSTCO’ is an American multinational company that offers merchandise. It offers only
high-quality products with low price guaranteed products on a steady basis (Minahan,
2012). It also provides the facility of free sampling and easy refunds. These factors add
up to the customer’s enjoyments level. COSTCO, as one of the discount stores, is
leading in the Australian market because its customers are highly satisfied (Herbrik,
2019).

EVOLUTION OF RETAIL STORES 9
Conclusion
The research report summarizes on the title ‘Retail Management’. The above discussion
suggests that the retail industry is highly responsible for Australia’s economic growth.
Additionally, the retailing future face suggests that it can offer several opportunities to
the retailors if it aligns as per given recommendations. Thus, it concludes that Australia
retail industry is evolving at an advanced rate with higher competition.
Recommendations
1. In order to match the customer’s expectations, it is recommended that the retail
industry should develop more cleverness and quickness in their activities. It also
needed a host of platforms to serve better to the growing population and rising
demand in Australia. Additionally, it should alter the manual requirements with
artificial intelligence, as it will suit the upcoming busy lifestyle of customers.
2. As mentioned above, there will be a rise in sale through digital channels. Thus,
retail stores should opt for a store with a specific size, as it will prevent the high
cost. It should emphasis in opening ‘smaller footprints stores’ with a shorter lease.
3. In order to enhance the customer’s experience, retail stores should focus on
designing diverse store presentations from their current stores. It should engage
staff with high product knowledge and prioritize sales training. Additionally, it
must pay prior attention to personalization, home delivery service and online
selling. They must adopt technology that would require less staff involvement to
support customer self-service in the department stores.
4. As stated previously, that online retail will provide a chance to the retail industry
to emerge as a major exporter. Thus, to avail the future opportunity, it is
suggested that retail stores should initiate their brand marketing at the global
level. This activity would provide ease in establishing footprints in the international
market.

EVOLUTION OF RETAIL STORES 10
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