Myer admits struggle to meet omni-channel customer expectations

Retail giant sees strong sales growth including online, but net profit is down by 23.1 per cent

Myer’s new CEO has admitted the retailer has struggled to meet the modern and omni-channel expectations of its customers after announcing a 23 per cent drop in net profits in its first half.

According to its half-yearly report to 24 January, Myer saw total sales rise by 1.5 per cent to $1.76 billion, with second quarter sales up 2.5 per cent to $1.07bn. The retailer also posted strong online sales growth, with an operating gross profit up 0.9 per cent to $714.9 million.

However, sales are still below expectations, and EBIDA fell 15.6 per cent to $145.3m. Net profit after tax was also down 23.1 per cent to $62.2 million.

Myer’s new CEO, Richard Umbers, said digitisation had changed the way consumers shop, altering their expectations of retailers significantly. While Myer has been working through a strategic review to better address these modern demands, he conceded the retailer had not yet done enough to meet these higher expectations.

“Some elements of the existing strategy represent solid retail fundamentals. Overall, however, it did not deliver a business model able to respond to this new retail environment and we have lost relevance with some customers,” Umbers said.

“There is strong evidence that department stores can transform and be inspirational to customers. Our international peers have responded to disruption by leading in omni-channel, by reinventing the in-store experience, overhauling the range, and by differentiating through innovation.”

Umber said Myer’s new strategy is aimed at bringing “the love of shopping to life” and will be focused on winning back market share, responding faster to change, and delivering a sustainable recovery in earnings.

Key pillars will be customer-driven decision making, building data and digital capability off the back of the Myer One loyalty program to accelerate omni-channel, improving in-store experiences through new ranges and stronger brand emphasis, and improving productivity.

Umbers also said a recent customer research project using internal and external data sources had provided the retailer with much-needed intelligence on the current and future Myer customer, including the merchandise and services it should be placing more emphasis on.

According to the ASX, Myer trading conditions during the second quarter were challenging, only improving in late December. The Stocktake sale was ahead of last year on a total and comparable store sales basis, however this was not sufficient to make up for the shortfall in sales earlier in the half. The highly competitive environment, together with the overall effect of a weaker Australian dollar, saw gross profit margins deteriorate by 24 basis points.

One positive note was the launch of the unique Christmas ‘Giftorium’ concept across all stores, which Myer said helped deliver an enhanced customer experience and generated positive feedback from customers and suppliers.

The company now anticipates operating gross profit margin pressure to continue during the second half of 2015.

CMO Australia conversation on LinkedIn: CMO Australia, join us on Facebook:, or check us out on Google+:

Join the CMO newsletter!

Error: Please check your email address.
Show Comments

Supporting Association

Blog Posts

People in vegan houses shouldn't throw bacon

Picture this. You’re at a Gourmerican burger joint chomping a cheeseburger, when an outspoken vegan friend starts preaching that you’re killing the planet. Last week, that same vegan downed a pricey glass of pinot before their flight to a far-flung destination, armed with their strongest mossie repellant and first aid kit. Anything amiss?

Abbie Love

Strategist, Ikon Communications

The role of the CMO is evolving: Are you keeping up?

My (amazing) vacation in the Galapagos Islands earlier in the year got me thinking about Charles Darwin and his theory of evolution. What does this have to do with the role of today’s CMO, you ask? Plenty.

Sheryl Pattek

Vice-president, executive partner

Getting your business ready for the Entrepreneurial Consumer

We all know the digital revolution has completely transformed the way consumers are interacting with brands, and that a lot of businesses are finding it hard to catch up. One way to closing this brand gap is to understand consumer behaviour and build a brand experience that meets these new needs.

Pip Stocks

CEO and founder, BrandHook


Kerry Edwards

Open Colleges taps into social for better student interaction

Read more

Or just go to sites like www.shopsthatshiptoaustralia.c... and others and be sure that the stores will send to where you live :-)


Why online shopping is like dating – RedBalloon CEO

Read more

Personalisation is the key. Customers demand a very relatable and well defined CX where the sincerity and understanding of their disposit...

Hitesh Parekh

In pictures: Improving cutomer experiences through smart personalisation

Read more

Thanks for this. The key for me is the effective of governance where it dictates and sets the proactive policy when it comes to CX. Tech ...

Hitesh Parekh

6 lessons in modern marketing from a customer experience chief

Read more

Very well said “With today’s consumers more demanding of the brands and merchants they shop, it’s imperative for merchants to not just co...


CMO's top 10 martech stories for this week - 29 September

Read more

Latest Podcast

More podcasts

Sign in