How happy staff and online deliver retail growth

The Australian Financial Review‘s Sue Mitchell reported David Jones’s results last week. Not a huge surprise, given some retailers are reflecting the impact of the Reserve Bank of Australia’s high interest rates forcing us all towards an increased disposition to save, rather than spend.

Perhaps the RBA, having done a great job through the GFC, is losing the balance necessary to keep the many and varied parts of our economy in harmony. Not to be confused, it is a seriously challenging balancing act and one that very few of us have the intellectual capacity to fully understand, let alone, effect. That aside, Australian shoppers are living in great times and should be positive and confident about the future. However, they are actually frightened of the present, so aren’t spending. An unusual set of circumstances to say the least.

Which is why, buried in the DJ’s report, was a phrase along the lines of: The number of shoppers still visiting our stores hasn’t fallen, they are buying as frequently, but the transactions are lower value so our sales revenue is down. I paraphrase for clarity. The important element is this: shoppers haven’t stopped visiting the stores; they are still making as many purchases and the till is still ringing as often as before, but they are spending less each time the till rings.

Many years ago when I was on the board of Royal Doulton Canada, the vice president of the retail division installed electronic counters in stores to count the number of shoppers visiting each day. Some stores still use them today, and although it’s an inexact science, it is indicative of footfall into stores. It lets you, at the very least, have a sense of whether the advertising and awareness campaigns you run are creating enough attention, interest and desire to stimulate and create action, and attract shoppers into your stores to buy, and allowing you to measure footfall. And all things being equal, if you have high footfall, and the staff and stock being offered in store are working well together, you get sales.

But my time with Royal Doulton was pre-internet. Settle down now kids, there was time when we were not all connected together on our little planet 24/7 by our phone. So when David Jones says that footfall and transaction volumes are good, but overall sales are down, it says to me two things.

Number one, the fun has gone out of the stores, so the staff and the stock aren’t working in harmony to create a great shopping experience. If staff were engaging with shoppers surrounded by great stock they would be selling more in each transaction.

Number two, the online shopping option isn’t being taken up. Remember, Nordstrom’s online sales value grew by over 20% this year. If stores sale were flat year-on-year, online sales would be delivering the growth as loyal DJ’s shoppers move between the store and online channels.

The good thing about retailing is that it’s an everyday process. So David Jones can turn both those issues around in time for the June mid-year sale season.

In his role as CEO of CROSSMARK, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia, NZ, the US and Europe. His international career in sales and marketing has seen him responsible for business in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands. CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.