Jude: Tips on fighting AmazonKeynoter for the Australian Sporting Goods Association annual event was top retailer Gareth Jude, reports Sportslink's editor Maggie Coleman.
He caught members’ attention immediately with the assertion that he had started in retail when 70's personality Gary Glitter was a pop star!
“Retail is as different as night and day now,” he said, describing today’s major impacts as having come from digital, mostly smartphones, and Amazon, including its imminent arrival in Australia.
Jude certainly knows his retail stuff – now with Telstra, he began in a UK hardware store at the age of 14 and his CV includes working with leading brands in Australia including Video Ezy, 3mobile, Woolworths and two years as chief executive of Paul's Warehouse.
Competition is the big disrupter for the industry, he said. “It is essential we make connections with the customers,” and his five years with Telstra have re-inforced that belief!
Australia has one of the highest penetration of mobile phone usage by those aged 14 plus in the world, with 80 percent ownership, he said.
Channels are irrelevant now. Retailers need to be in all channels and constant research by all is vital.
“When I started selling lathes after school and in school holidays at the age of 14, I knew more than the tradies I was selling to because I had the catalogue and they did not.
“Now we have the empowered consumer who is likely to know more than your staffer.
Competition is here now – digital has brought the world to Australia, along with an avalanche of global retailers. Smartphones give access to the world instantly.
Jude told his enthralled audience that he loves the honesty of retail. "You can't hide from the till."
In 2015, Amazon took 50 percent of online sales in the US , he said. And bricks-and-mortar traffic is down in the US for the past three years.
Omnichannel retailers are suffering from disruption by Amazon – we are all looking at what we are doing well in retail and what we are not.
If we are the cheapest, then we will always get sales but is that where you want to be?
“It certainly is true that if you have something people want, they will shop there” – Jude gave the example of The Grove in LA which is a very popular and much lauded retail destination.
Jude also used the example of Starbucks in the US, to illustrate his point about the effectiveness of what he describes as “the Retail Campfire” – they are not in the business of selling coffee but in the business of selling a digital destination, time and space for consumers to relax in, catch up on their email and check the latest on Facebook.
“A retail space must be where consumers want to be!”
He gave the UK’s popular John Lewis as a great example of a retail business which has met the current challenges. Click and collect is huge, the store is used for research before consumers buy online, as well as consumers researching online before purchase.
Jude said, “The Omnichannel customer at John Lewis spends 3.5 time more than the customer who buys in one channel, such as in store or online, according to research done by IDC
“Omni-channel is having more doors, several entrances for your customers and this may be the best way to fight Amazon as the giant cannot do this.
Years ago when Walmart was king, their chief executive was asked ‘how do we compete with you?’
He said, ‘find something we cannot do’ – this is the secret of competing with Amazon too, said Jude.
Try collaborating with your consumer like Dominos with their pizza tracker and now pizza moguls programme which is “outstandingly successful,” said Jude.
As a retailer, it is vital that we realise just how much the world has changed -traditional retail things don't work so well any more.
“You have to innovate and you have to be prepared to fail -Telstra uses a small store in Melbourne city as a sandbox store, to innovate and see what works before we roll it out across more stores or the complete network, Jude told the ASGA gathering.
• Pictured: With keynote speaker Gareth Jude (second left) are ASGA board members Shannon Walker (executive director), Julie Stevanja, Andrew Reed and Guy Tuthill