Report: Australian retail lifts its marketing game

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

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

Blog Posts

Why are we dubious about deep learning?

The prospect of deep learning gives those of us in the industry something to get really excited about, and something to be nervous about, at the same time.

Katja Forbes

Founder and chief, sfyte

Why you can’t afford to fail at CX in 2019

In 1976 Apple launched. The business would go on to change the game, setting the bar for customer experience (CX). Seamless customer experience and intuitive designs gave customers exactly what they wanted, making other service experiences pale in comparison.

Damian Kernahan

Founder and CEO, Proto Partners

Natural born leaders

Many business and marketing managers progressing to leadership positions face evolving their focus from operational matters to strategic decision making and planning.

Jean-Luc Ambrosi

Author, marketer

Interesting article but what about the employees? There needs to be access to quick cash for everyone involved lest we have yet another '...

Joel Pencer

Suncorp outlines customer investments, digitisation as key to business improvement

Read more

Just printed out this Brad Howarth screed to read tomorrow. I need a good laugh once in a while. Or maybe shed some manly-man tears at th...

Larry A Singleton

What a diversity agenda has done for Kellogg's staff and innovation engagement

Read more

Morons. PC Nazis infiltrating and subverting every level in our lives.These scum have destroyed our education system.Read FrontPage Magaz...

Larry A Singleton

What a diversity agenda has done for Kellogg's staff and innovation engagement

Read more

It is an accepted fact that in the present times the mass makes use of digital marketing more often and are more and more enlightened wit...

Digital Marketing Course in Ja

Why RMIT is partnering with Adobe for digital marketing learning

Read more

If men were really the dominating brutes that feminist make them out to be ,then women really would be second class citizens. Without th...

aaron

Analysis: Gillette's latest ad only proves why brands standing for positive change is vital

Read more

Latest Podcast

More podcasts

Sign in