subject: Australian Retail Under Attack From Two Fronts [print this page] Any military strategist will tell you that fighting a war on two fronts is a recipe for disaster and should be avoided. Had Germany not invaded Russia, World War 2 may have ended differently lucky for us the resource strain of multiple front fighting help weaken their defence and the rest is history.
Recently Australian online sales have been in the news for a variety of reasons one of which being the attack from overseas brands taking online retail share with numerous industry bodies venting their spleen in main stream media about the unfair nature of online and the advantage overseas sellers have over local based retailers. Online sellers such as ASOS for example have moved to directly attract Australian consumers; and the local retailers have expressed their disappointment at the lack of GST enforced on overseas sales under $1,000AUD this issue combined with a high AUD has ensured a perfect storm for overseas retailers to take advantage of online.
But the online sector isnt the only place retailers are fighting overseas based businesses and brands as more and more we have seen Top Shop, Zara, GAP and recently Pottery Barn announce they too would open physical stores on our shores. And hence we have Australian retailers fighting against overseas retailers on two fronts.
And this double fronted attack has prompted a change in the way retail acts and it be perfectly honest it might be the wake up call Australian retailers needed to move into the new way of thinking. Not only has delivery of sold items changed as consumers review and shop for products on mobile and tablets the whole sourcing and supply channels have had to change. No longer will retailers here go overseas and see what the labels are doing, and then get them copied in China those days are over.
The Australian retail sector has always been set up differently to overseas retailers for instance wages are higher here, as is rent per square metre and generally speaking utilities such as power is more expensive and will all these additional costs the retail value of items is higher as well. Hence as the world opens up through the Internet so to does access to cheaper prices and more variety.
As local retailers are becoming increasingly aware of overseas-based competitors using their pricing and supply advantages on Australian consumers their professionalism and connect with the consumer will also improve. The days of traditional shopping are gone so too are the days of traditional retailing.
The next year in Australian retail will be interesting more brands are expected to come to Australian shopping centres how will they find the audience, and how will they find Australian retail conditions and wages etc. If the dollar stays high then overseas sellers remain relevant and attractive for Australian consumers; again forcing local offerings to improve. Local sellers have brand recognition, trust and service in their arsenal it will be well advised to use these weapons wisely.
