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: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

Conversations over a cuppa with CMO: Microsoft's Pip Arthur

​In this latest episode of our conversations over a cuppa with CMO, we catch up with the delightful Pip Arthur, Microsoft Australia's chief marketing officer and communications director, to talk about thinking differently, delivering on B2B connection in the crisis, brand purpose and marketing transformation.

More Videos

We can deliver DIP N PAY JP54,JET A1,D2,FOB @Rotterdam CRUDE OIL CIF /DIP N PAY TANKFARM CHINA ,we have sellers that can work based on st...

JSafra Bank

Google+ and Blogger cozy up with new comment system

Read more

JP54,D2, D6, JetA1 EN590Dear Buyer/ Buyer mandate,We currently have Available FOB Rotterdam/Houston for JP54,D2, D6,JetA1 with good and w...

Collins Johnson

Oath to fully acquire Yahoo7 from Seven West Media

Read more

Great content and well explained. Everything you need to know about Digital Design, this article has got you covered. You may also check ...

Ryota Miyagi

Why the art of human-centred design has become a vital CX tool

Read more

Interested in virtual events? If you are looking for an amazing virtual booth, this is definitely worth checking https://virtualbooth.ad...

Cecille Pabon

Report: Covid effect sees digital events on the rise long-term

Read more

Thank you so much for sharing such an informative article. It’s really impressive.Click Here & Create Status and share with family

Sanwataram

Predictions: 14 digital marketing predictions for 2021

Read more

Blog Posts

A Brand for social justice

In 2020, brands did something they’d never done before: They spoke up about race.

Dipanjan Chatterjee and Xiaofeng Wang

VP and principal analyst and senior analyst, Forrester

Determining our Humanity

‘Business as unusual’ is a term my organisation has adopted to describe the professional aftermath of COVID-19 and the rest of the tragic events this year. Social distancing, perspex screens at counters and masks in all manner of situations have introduced us to a world we were never familiar with. But, as we keep being reminded, this is the new normal. This is the world we created. Yet we also have the opportunity to create something else.

Katja Forbes

Managing director of Designit, Australia and New Zealand

Should your business go back to the future?

In times of uncertainty, people gravitate towards the familiar. How can businesses capitalise on this to overcome the recessionary conditions brought on by COVID? Craig Flanders explains.

Craig Flanders

CEO, Spinach

Sign in