Myer CEO: Omni-channel and close customer connection keys to competing with Amazon

ASX-listed department store presents its latest first-half results, citing dip in sales but increase in online spending

Myer store
Myer store

It is up to traditional department stores like Myer to keep proving their relevance to consumers as omni-channel players as global giants like Amazon come to shake up Australia’s retail market, Myer’s CEO claims.

Myer CEO and managing director, Richard Umbers, was asked to respond to questions about the forthcoming launch of Amazon in the Australian market and its impact on local department stores, during the group’s first-half financial result briefing.

While suggesting Amazon will face significant challenges bringing its Prime model to Australia geographically, Umbers said it’s “very likely” the whole retail pie will grow thanks to its market debut locally.

“Those retailers that have strong online operations in their own right, are likely, even if they lose some marketshare, to grow in that context,” he said. “We believe the most important strategy to ensure we can compete… is to make sure we put omni-channel investment right at the forefront of our investment model.

“It’s not a foregone conclusion yet what will happen if Amazon comes, that it’s the discussion topic in the industry right now. I think we are as well position as anybody.”

Umbers said Myer’s strong, long-term connection with customers would count, and noted the group’s Myer One loyalty program as an example.

“As an established brand with loyalty built up over generations, this is our game to lose,” he continued. “A lot of the stuff we sell, particularly in the fashion market, lends itself to a high-touch, service-driven environment. The fact that we can link our stores to our online environment and drive omni-channel outcomes means the customers get the best of the best from us.

“Using data and good, targeted marketing, we can maintain a strong, emotional connection with customers, which we think puts us in a good position to compete.”

The ASX-listed department store giant reported a 0.6 per cent dip in half-year revenues to 28 January to $1.78 billion, but a comparable store sales increase of 0.3 per cent. Q2 sales were down 1.3 per cent to $1.06bn, or 0.5 per cent on a comparable store basis, figures Umbers attributed to difficult trading conditions during January.

Net profit after tax rose by 5.3 per cent to $62.8 million, and EBITDA also increased by 2.7 per cent to $142.2m. Umbers saw this as a particularly good result given aggressive competition with heavy discounting before and after Christmas, along with patchy consumer confidence. He noted the shift away from discounting as a group.

Another highlight over the first half was a 48 per cent increase in online sales, which Umbers attributed to improve online customer experience. The top performing category was homewares, which lifted by 65 per cent and now represent 10 per cent of total sales online.

“This was built on traffic and conversion rate increases of over 20 per cent, and a 6 per cent increase in basket sales,” Umbers said. “Click-and-collect now represents 12 per cent of those sales.

“We have created smoother user experience online, and partnerships with Google and eBay have helped increase our online sales.”

Myer has also just struck a new partnership with Afterpay, providing customers the opportunity to buy now but pay later.

Myer is 18 months into a five-year, $600m transformation program aimed at repositioning the business. The ‘New Myer’ proposition consists of four key pillars: Customer-led offers, wonderful experiences, omni-channel shopping and a productivity step change.

As part of this revamp, Myer has introduced a raft of new premium brands and more experiential in-store into the mix. Over the past six months, nearly 700 new or upgraded brand installations have been rolled out across the network, and new brands introduced over the period include Oroton, Saba, Jak + Jones Premium, Radley and John Lewis.

“As we enter the next phase of transformation, we are delivering on a number of longer-term initiatives to support New Myer, including an improved omni-channel offer and a productivity step change,” Umbers said, adding a number of the significant initiatives to come are less visible, such as back-end systems, plus the online Myer Academy learning offering for staff.

“To support the business into the future, we are also focused on ensuring we have an efficient and sustainable operating model in place.”

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

Latest Videos

Launch marketing council Episode 5: Retailer and supplier

In our fifth and final episode, we delve into the relationship between retailer and supplier and how it drives and influences launch marketing strategies and success. To do that, we’re joined by Campbell Davies, group general manager of Associated Retailers Limited, and Kristin Viccars, marketing director A/NZ, Apex Tool Group. Also featured are Five by Five Global managing director, Matt Lawton, and CMO’s Nadia Cameron.

More Videos

Great read. I agree that it should be a perfect balance between interacting with your customers and knowing your brand. As a business, yo...

Caroline Scott

7 ways CMOs can improve their customer engagement game

Read more

Very true. Team development helps improve collaboration among the team members. I was able to improve my team's collaboration skills by t...

Quent Sinder

Why empowering others can help make you a great leader

Read more

CRM is a very good software that can help you succeed in your business. In my company, this system has allowed me to improve customer rel...

Anna Janicka

Sensis rebrands to Thryv and brings business software to Australian SMBs

Read more

AI Leasing Assistants have finally arrived for the multifamily industry. With so many to choose from it can be hard to figure out which i...

Alice Labs Pte. Ltd.

CMO's top 8 martech stories for the week - 6 May 2021

Read more

Nowadays, when everything is being done online, it is good to know that someone is trying to make an improvement. As a company, you are o...

Marcus

10 lessons Telstra has learnt through its T22 transformation

Read more

Blog Posts

Why if marketing is all you do, you’ll never be very good at it

OK, so you’re probably thinking: “Here comes another article to badger me about living in my bubble.” And also, “I bet this bubble-bashing piece will go on to explain how I can achieve better results through some heady dose of new life experiences, new routines and annoyingly different opinions on social media.”

Dane Smith

Behavioural science lead and regional consulting partner, Ogilvy

A leader’s role in rebuilding a culture of confidence

Every day, there are new predictions and studies on the future of work, the state of the economy and the unfolding global pandemic. All of which creates uncertainty and heightens the imperative of effective leadership.

Michelle Gibbings

Workplace expert, author

Confused About Your Customers?​

​I've worked in brand and marketing for more than 20 years. But there’s one area where I’ve found myself going around in circles and I must admit I'm becoming increasingly confused.

Rich Curtis

CEO, FutureBrand A/NZ

Sign in