Articles

Analogue Still Rocks Human Beings.

According to Nielsen data released in the United States at the end of 2017, vinyl record stores have achieved more than 1000% growth in the last decade. Furthermore, where digital music downloads peaked in 2012, sales of the physical versions of music are continuing to grow. The same thing has occurred with sales of books where downloads peaked in 2014 and sales from bookshops are growing. In the USA physical media is now outselling digital downloads.

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The Problem With Franchising.

In the last twelve months the noises emerging from and concerning the franchising sector have been getting more and more negative. From media attention grabbing franchisee failures to bordering on criminal franchisor operating models to systemic failures, much of the sensationalist nature of the coverage has distracted attention away from the core issues facing franchise systems.

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The Real Ramification Of Online Takes Hold.

The latest sales numbers for online retail confirm that its rate of growth (from a low base) is high at 18.7 per cent but at $21 billion in total it still accounts for less than 10 per cent of the entire retail market – as it does in most major economies in the world. However, the critical number is actually where the dominant growth for online is coming from and that is in the area of ‘marketplaces’ such as eBay which grew at 74.8 per cent last year according to Australia Post. These ‘marketplace’ online catalogue re-sellers rely on one key input. Branded goods from multiple third party vendors all vying to catch the consumer’s wallet with increasing levels of discounts on desired goods.

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What’s The Big Idea?

John F. Kennedy famously committed the United States of America to a big idea – landing on the moon. Martin Luther King dreamt his big idea of every person be treated equally, regardless of the colour of their skin or the religion they chose to follow. In the marketing world – while arguably a little less lofty – Apple’s big idea was to use technology to enrich people’s lives.

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What Are We Doing To Our People?

The sixth President of the United States of America – John Quincy Adams – once famously said, “If your actions inspire others to dream more, learn more, do more and become more, you are a leader.” Contemporary retail leadership teams talk a good game around these kinds of sentiments. But some of my recent encounters with big and small retailers make these claims sound increasingly hollow, resulting in three types of employee reactions.

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The Banking Royal Commission Will Let Us Vent But Has Little Chance Of Fixing The Problem.

The Royal Commission into financial services – the inquiry that was resisted but is now acknowledged as ‘long overdue’ – has been exposing issue after issue in the most important sector of our economy. By my simple reckoning its cost won’t be the estimated $80 million often quoted but more likely will top $500 million after submission preparation, legal advice, management time and organisational drain are factored in for all the various companies, organisations and individuals that have been swept up into its net.

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Closing Stores Is Often Treating The Symptoms, Not The Disease.

If media reports are to be believed, there is an apparent rush right now for underperforming retailers to close stores. Blaming high rents as a major cause of their problems, they radically prune their distribution capabilities as if relegating shop space to a cost centre rather than a profit centre. At one time these retailers were happy to sign the very same leases they now refer to as onerous. So what changed? Don’t get me wrong, there are legitimate (although rare) reasons why closing a store and exiting a catchment area makes sense and often this is down to admitting a mistake in entering that specific location in the first place.

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How Does The Facebook Inquiry Relate To Retail?

In the latest example of the United States Democratic political machine’s inability to accept losing the ‘unlosable election’, Facebook has become the next scapegoat for failure. The spectacle of one small geeky guy being bullied by 20 senators and the might of the ‘political inquisition’ is absurd theatre that may provide some people with an avenue to exorcise their frustration but will change little.

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Who Gains From “Fake News” About A Bid For Myer?

Last week the retail news cycle went into frenzy mode on rumours that David Jones parent company Woolworths SA were looking into acquiring their department store rival. Complete bollocks according to Woolworths SA who were forced into making a denial to the market. However, in the meantime, Myer share price soared more than 8 per cent on the “fake news”. So who started the rumour and why? Who gained from it?

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So What’s The Game Plan Now For Myer?

The latest moves from within the Myer camp have indicated they are retreating to their historically preferred defensive ground of ‘glorified K-Mart’ – a reflex operating mode that has always emerged out of a position of fear and deeply entrenches the very problems that are killing them. In particular, margins declining faster than they can cut the cost base and customers deserting them in droves because, lets face it, K-Mart does a better job at being K-Mart.

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