More Australian retailers are set to fall unless they evolve
2020 has been a rocky start for retailers, with the industry describing the first weeks of January as a retail Armageddon.
The futures of Jeanswest, Australian Geographic's Curious Planet, Bardot, Harris Scarfe and EB Games all look grim after being forced to close stores across the country in recent weeks.
Sadly, this bloodletting across the retail sector looks set to continue in the short term with further announcements expected from other well-known brands including Katies, Noni B, Rockmans and Big W. The South African owned Woolworths Company is also reportedly looking to offload the Country Road Group, which could have serious ramifications.
I love retail, so it pains me to see one after another falling. And if stores continue on their current trajectory, we will only see more major brands either scale down or disappear from shopping centres forever.
From small independent brands through to major names, many retailers are struggling thanks to high rents, falling revenues and a sharp decline in consumer confidence.
Given the market conditions and the tightening of lending in the wake of the damning banking royal commission, calling the outlook bleak would almost seem optimistic.
The only hope for retailers is a pick-up in consumer spending, which despite record lows in interest rates, continues to be sluggish.
Thanks to major sale days like Black Friday, Cyber Monday and Boxing Day, consumers are being selective about when they open their wallets. But these days alone will not be enough to save retailers.
This means that retailers who continue to operate to the same formula that might have worked 20 years ago are sitting on the endangered list.
No brand can survive long-term without evolution, growth and investment. As anyone who has ever passed by a creek with a rotten odour can tell you, stagnation smells.
Retailers who have opted to not invest in their own stores for years on things like modern fit-outs, or failed to train their sales people to deliver the kind of customer service that creates a positive in-store environment, have literally been inviting their customers to walk out and shop online.
When the economy is booming it's hard to fail. But when belts tighten it is only those who innovate, adapt and provide a customer-centric experience who will earn the right to their customers money and survive. Some will even prosper.
It's a lesson that some companies have learned, with retailers like Aesop, Apple and JB HiFi defying trends and seeing increased sales in the tough market conditions. Through technology and innovation they are creating a richer customer experience - and the customers are responding.
For retailers who are struggling, it's time to read the room. And by that I mean stop blaming the changing market conditions and focus on changing your own behaviour. Take leads from businesses that are thriving. Understand who your customers are, how they perceive value, and what matters to them in their decision to buy. Use every resource you have to deliver an experience your customers want, and one that will see them return.
It may be hard to admit, but often it has been a lack of investment, training and cost cutting within businesses that has impacted profit, not external factors like a stagnant economy or a lack of wage growth.
Choosing to create a memorable customer experience over mundane discounted offers and focusing on delivering real customer service is the answer to turning things round.
Now that our collective backs are up against the wall, it's time to innovate to survive, and to allow that which is non-essential to fall away. Because without people, there is no business.
Ingrid Maynard is the founder of the Sales Doctor