Recent figures released by BDO revealed Australian retailers have boosted marketing spend particularly in digital marketing, to help increase market share
Australian retailers lifted their market share game and helped leverage consumer confidence by boosting their marketing spend by over 35 per cent, including investment in digital marketing, over the last financial year.
The BDO’s 2015 Spend Trend report showed Australian retail sales lifted again in FY15, despite some high-profile losses, as the sector gets ready to leverage ideal consumer conditions in 2016 by increasing marketing investment.
Analysing key 2014-15 financial ratios and indicators for 18 ASX-listed retailers, including Wesfarmers (WES) and Woolworths (WLW) and 13 US and UK-based retailers, the report showed Australian specialty retailers increased sales revenue by 5.3 per cent, or approximately $1 billion, from 2014-15. This contrasted with a 9.4 per cent increase across the international retailers.
BDO partner and retail specialist, John Bresolin, claimed this year’s report revealed positive signs for Australian retailers and shareholders, as last week’s hold in interest rates and the lower Australian dollar combine to make shopping locally more attractive to consumers.
He said a social media surge among Australian retailers has coincided with some encouraging growth in online sales, with many recording significant double-digit growth in relative terms.
“Many retailers now employ dedicated social media staff or have appointed a digital marketing department to coordinate these efforts, with tools like Facebook, Instagram and YouTube being used heavily in key sales periods such as the lead-up to Christmas,” he said.
LUSH Cosmetics brand communications manager, Natasha Ritz, said the beauty brand uses social media to drive engagement, provide fantastic customer care, discuss topical issues, drive brand loyalty and build trust.
“We are moving towards a more omni-channel approach by connecting messaging digitally and in stores, and we are always looking at opportunities to use technology to better serve our customers in whichever way they’d like to engage with us as a brand,” Ritz said. “Social media allows LUSH to tell our story, share content and encourage conversation, not just about our brand or products but topical issues and deeper messages, to help build trust and relationships with our customers.”
Despite crucial business KPIs such as sales revenue, net profit margin, gross margin and gearing improving or remaining stable for Australian retailers, the larger international retailers are still outperforming Australian companies in key areas of revenue growth and net profit margin.
While Australian specialty retailers recorded an 18.7 per cent increase in average net profit margins to 4.3 per cent, boosted largely by Billabong’s write-downs in 2014-15, the international retailers still maintained a higher average rate of 5.3 per cent.
Stock is also moving more slowly for Australian retailers, and the report noted a slowdown of 4.8 per cent to 55.5 days for the speciality retail group sector, and a 4.3 per cent drop to 31.9 days for the broader group. Bucking this trend slightly were the international retailers, increasing 0.4 per cent to 45 days in FY15.
“Australian retailers still have a long way to go if they are to match their international counterparts, whose online sales represent well in excess of 10 per cent of their total revenue,” Bresolin added.
Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+: google.com/+CmoAu
In the third and final episode of our 3-part CMO50 video series exploring modern marketing and why it’s become a matter of trust, we’re delighted to be joined by Telstra’s former CMO and now digital services and sales executive, Jeremy Nicholas, and Adobe VP Marketing Asia-Pacific and Japan, Duncan Egan.
Flash back to the classic film, Willy Wonka and the Chocolate Factory. Television-obsessed Mike insists on becoming the first person to be ‘sent by Wonkavision’, dematerialising on one end, pixel by pixel, and materialising in another space. His cinematic dreams are realised thanks to rash decisions as he is shrunken down to fit the digital universe, followed by a trip to the taffy puller to return to normal size.
Why is it there is no shortage of leadership development materials, yet outstanding leadership is so rare? Despite having access to so many leadership principles, tools, systems and processes, why is it so hard to develop and improve as a leader?
As a nation united by sport, brands are beginning to learn money alone won’t talk without aligned values and action. If recent events with major leagues and their players have shown us anything, it’s the next generation of athletes are standing by what they believe in – and they won’t let their values be superseded by money.
