What is the future of retailing in Australia?

Over the past few months, there are many different companies coming up with a number of different solutions for customers demands for lower prices. Everyone is searching for the "Future of Retailing in Australia". For example:


JB Hifi

• Problem: Increased pressure from oversea importer/suppliers, the "Grey Market"
• Solution: "If you can't beat 'em, join 'em." 
• As an Australian based retailer, there is a general expectation from the wholesalers and other retailers that "Good" corporate retail players will not import products themselves. Why? It impacts on the profits of the local importer/wholesaler who provides the product warranty. It has an aggressive under cutting of price for the other competitors. There are product variations including different power requirements and plug types. There are local jobs that are impacted by sending the profits and revenue overseas. So why do it? Simple, increasing sales. Customers want cheaper prices and the taxes and cost prices for many products are lower overseas than in Australia.

Goodman Fielder

• Problem: Increased competition from their own retailers ie Coles & Woolworths.
• Solution: Reduce the quality of your product to reduce the cost price to compete.
• It is a basic expectation of most Australian's that you can buy fresh bread every day. But this costs money. The largest cost is not the raw materials but rather the staff & logistics costs. Bakers, delivery drivers, staff in the supermarket to put the bread on the shelf, staff to get rid of the old stuff. If you bake the bread to last longer on the shelf then you can significantly reduce your costs and compete with the retailer acting as both the baker and retailer to compete at prices well below your existing cost price. The loser here is the consumer who now gets stale bread as a standard.

These are 2 recent examples of the huge change happening in the retail market place. In a market where all companies are driving for increased profits, while consumers demand cheaper prices the outcome is going to be significant shake ups across established markets. Everyone is looking for the Future of Retailing In Australia.

As consumers become more savvy with the final price they are paying for products in the market and   how to buy these products online, they need to be aware of what they are actually getting for their dollar or what the existing companies provide for them.

The Grey Electronics Market

• Positive: Lower prices at the cash register for the consumer
• Negative: No warranty or murky warranty coverage, no local manufacturer support, no assistance from local authorities if you are unhappy with the product you purchased, increased risk of damaged product on delivery, taxes & profits going overseas.

Increased "Home Brand" Products

• Positive: Short term lower prices
• Negative: Reduced product innovation as home brand are copiers not creators, reduced quality, reduced competition then higher prices as the brand names pull out, more overseas production and manufacturing.

These changes in the market will have significant impacts on the retailers, manufacturers and consumers. Only time will tell if they are positive or negative impacts. No one really knows what the Future of Retailing in Australia will be, but lets hope that the market and companies are developing plans to ensure that we remain a strong country for the benefit of the people who working and live in Australia as well as the companies who sell here.