Articles

Get Out of The Way And Let The Renaissance Begin.

The pace of retail failures in Australia appears to have picked up of late and there are increasing whispers around the market of countless retail businesses (covering hundreds of retail stores) that are privately ‘on the market for sale’ – many with unreal expectations of their worth. Still others are very publicly waiting for the right time to either trade sell or sell by public offering. This is a huge demonstration of a watershed moment in Australian retail. A strategic inflection point signifying the old way of thinking having come to an end as far as extricating profit growth is concerned.

It’s not necessarily that the businesses themselves have matured, but more that the current leadership or ownership has peaked in their ability to grow the business beyond its already achieved performance levels. Or worse, they are in decline.

For most of these retail businesses a big dose of fresh thinking and fresh passion is required and an entrepreneurial approach more akin to how these businesses began. Unfortunately the sad truth of many Australian businesses is that they are poor imitations of international concepts and brands that were allowed to become more successful than they deserved because the originator of the model did not operate here.

Online began to expose them but international brands opening stores here eroded the surface appearance of superiority and revealed them for what they really were. Copy-cats who had none of the deep understanding of the DNA of the models, products and services they cynically ripped off.

These businesses – now quietly looking for buyers – have one asset worth exploiting. They are trading retailers with footprint, consumer awareness and a working infrastructure. That is their only value. Beyond that many of them need their brand purpose, their DNA and their customer value proposition completely reimagined. They need vision, passion, fresh ideas and new products that can stand up to the best in the world with a point of difference that can compete beyond a race to the bottom on price.

Australian consumers are poorly served by many Australian retail brands – with some notable exceptions. The Australian economy is poorly served by Australian retail brand exports, yet ‘brand Australia’ has a very magnetic international appeal. We have the unique talent, unique raw materials and unique lens that can create international brands equal to the best in the world. In the past this has been hamstrung by the ease of making money from copying. But that doesn’t work anymore.

Now we will be forced to be ‘better and different’ or perish. That is what will fuel the renaissance of Australian retail and make us one of the leading sources of international goods. There is a wealth of talented people just waiting to step forward. And as the old ways of doing things become increasingly indefensible, those who have stood in the way will be forced to step aside and let the renaissance begin. A time when we can compete on value-adding not commodities. That will be the coming of age of Australian retail and the true end of fortress Australia.