Retail Reboot: How Are Shops Changing To Survive?

Some retailers (yes, we're looking at you Gerry Harvey) love to complain about how online shopping is destroying their business. But change is a continuous force in retail, and constant reinvention has been a requirement long before building a web site become important as well. Just how well do some recent shop revamps stack up, and will they seduce you into spending more money?

Evidence abounds that online shopping is becoming more important to Australians. The ABS says local stores managed to flog $143 billion in goods in a year (though that figure includes wholesale and manufacturing, not just sales to consumers). We're also getting keener on shopping via our mobile phones, and in recent times we've got keen on buying from overseas to take advantage of the strong Australian dollar (though that hasn't worked quite as well recently). Heck, even Mr Harvey is having a go.

But no matter how important online shopping becomes, very few of us are going to do absolutely all our purchasing online any time soon. Some goods we want to see before we buy them, and some can be more expensive if we get them delivered (fruit and vegetables come to mind). Some stuff we want straight away, without waiting; some items are far too expensive to have delivered (think heavy items of hardware), and US stores still make an annoying habit of refusing to deliver overseas.

So it seems there will be a place for conventional retailers for some time yet, and they'll have to battle with each other as well as with the mysterious unspecified web-connected masses. One of their key competitive strategies is to redesign and relaunch their stores, creating a point of difference from rivals.

Retailing in Australia is increasingly dominated by large chains rather than individual outlets, but that doesn't mean the large chains can rest on their laurels. Whether launching into new markets or redesigning existing stores, there's a constant cycle of reinvention going in, and quite possibly in a suburb near you. With $20 billion in retail turnover in Australia in a month (according to the ABS), there's a lot at stake.

Over this Retail Reboot mini-series, I'll be looking at three recent examples of how retailers have taken a different approach to building and managing new stores. I'll be assessing what appeals in those stores (based on a personal visit, not as a member of the media, but as an ordinary shopper), and what is essentially designed to get you spending more money without necessarily getting better value. Obviously, that's only going to represent one person's view, so comments from readers will be welcome, as always. We'll kick off tomorrow by checking out Masters, the new Woolworths-backed hardware chain that recently opened its first outlet in Melbourne and is launching a bunch more branches in Queensland this week. See you then!

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Comments

    Where they're failing is service.
    There are exceptions of course, but it annoys me that many employees clearly have no training (or interest) in the product they're paid to sell.
    Anyone can read a list of features off the side of the box, and more importantly, anyone can read the feature list off a website.
    But the side of the box doesn't tell you it's good for your unique circumstances.
    The few good salespeople I've interacted with asked me the right questions and fed me the right information. In those situations, I've been more than happy to buy from them even knowing the price was somewhat inflated. The advice was worth the extra money!

      Yes, this is what bugs me. People like Gerry Harvey love to constantly tell us that we should be happy to pay more for shopping offline, since we're getting better customer service, but in reality, that level of service is rare.

      Last time I went to Harvey Norman I stood in front of the tablet accessories section.
      I looked around for someone to help. No one acknowledged me.
      I went over to a counter and stood there staring at this guy. He was going through a box of stock. Finally after waiting he said "you better find someone else I am going to be a long time". No help at all. Just basically telling me to go away.
      I walked out and purchased the accessory I was after online for $20 inc postage. The ones I was looking at in Harvey Norman were about $50.

        They're bad enough in small cities like Toowoomba, I shudder to think what they're like in Capital Cities? #}

      I'd actually work in an electronics shop if I got to help the customers out like this.
      I think it'd actually be fun. People might actually treat me like a tech guru.

      Unfortunately, I work in a call centre for electronics tech support. Not a day goes by where I don't feel like stabbing a pen through my hand as an excuse to go home.

      This!

      While researching a GOOD photo editing PC (working with large Photoshop files etc.) I went to HN. I smiled and nodded as the guy read out the specs (which was suited for anything BUT photoshop, then tried to get me to flexirent it ("Comes with a free camera! As a photographer you know how good the Canon 550D is!") while saying he would flexirent $1,600 worth of goods just for a $1,000 camera (Yeah, if you like buying a new car for the air freshener)

      I told him thank you and took my business online.

    I work for a certain electronic chain that 'does deals'.
    And I'm finding the current problem is lack of training for staff, and constantlly being punished for spending too much time with a customer trying to do what StevoTheDevo mentioned - trying to explain the product and will it work for you

    We've been very limited in how we can serve customers now. Unless your going to buy that item, the extended warranty and fifty other attachments you're not supposed to be worth my time. I have five minutes at best t talk to you, then I have to move on :/

      I was in your chain of stores looking for some UHF radios.

      The staff didn't have a clue about the differences in the models. But were "willing" to take out the 4 boxes from the sealed glass cabinet so that I could look at them myself.

      They didn't want to discuss anything to do with them, basically wanted me to buy it or leave.

      I left.

        Dont get me started on things like that, more than half the staff in the store i work in are like that. They're basically checkout operators and get so pissy when a customer asks them for help.

          I'd have had not problem if they just said "we actually don't know anything about these" etc. I'm not expecting every employee to know the minor details and differences with every product they sell.

          But acting like it was a chore to serve me, and acting like they were doing me a favour by taking items out of the display cabinet is what crossed the line.

    You would think companies like 'Harvey Norman et al' would be able to make the connection between their grossly overpriced product and a product on line that can be delivered to the customers door often up to 50% cheaper? But unfortunately they are too reluctant to give up that super profit and just simply make a profit! I realise that they have a greater overhead, but the biggest part of that is often the Share Holders, and they are all that matters! The only thing good about their shopping experience is checking out the product so you can get the details and then buy it on line cheaper! #{

      These places rely on people who are afraid of or can't do online shopping (as well as those concerned with quality).

      I know some people who would accidentally wind up on the FBI watchlist for buying plutonium while trying to order greeting cards online ("Oh god, I'm.. wait, what is this? I'm not good with computers") so strolling into a store and buying what they need ("$100 for a HDMI cable? THAT CHEAP?! GIVE ME TWELVE!") is a good thing for a lot of people

        Rrriight! so the shareholders aren't the reason prices are so high?? #]

    Yes, its really hard to feel sorry for most retailers. They're reaping what they've sown.

    In the old days you went to a shoe shop and were served by someone who had been learning and working with shoes for years - possibly from a family who had passed down their knowledge for generations.

    Now the norm is to be served by some kid who, at absolute best, has had basic sales training.

    10 years ago when sales records were broken every Christmas, the big retailers decimated their staff. Now Australia simply doesn't have the skilled people that it needs to work through the tough times and so they're getting trumped by online stores that can provide quality products without the lame sales pitch.

    Regarding new approches to retail, Coles have been launching some new stores lately that have to be seen to be believed.

    These stores are just huge! Imagine a supermarket that would fill a large Bunnings. Then imagine that it has half a K-Mart in there as well.

    They have a mobile phone shop in there (you can even buy an iPhone), a clothing section (complete with fitting rooms), and a huge variety of manchester, household and electrical goods.

    The staff are incredibly helpful too. When I asked where the panadol was I was escorted to the right place, not just told "aisle 6" as happens usually. And this is essential because the place is so huge I wouldn't like my chances of finding it on my own.

    When the honey I wanted that was on special wasn't on the shelf I was given a rain-check on the spot by the staff member I spoke to in the aisle. (Previous raincheck requests at any supermarket have sent me to the front desk, where I then have to wait while it is approved by some manager). And the staff member pointed out that the rain check is valid for 12 months! (only ever seen 4 weeks in other stores)

    I don't want to advertise any particular store, so I'll just say that the store I visited really seemed to be getting it right, going the extra mile, and doing it with well trained staff. I hope this wasn't a one-off.

    I hope I don't sound like an evangelist for Coles, I'm really not. But this level of service was outstanding and I hope it spreads!

    i love when they complain that we dodge tax online... but id be happy to pay 10% gst since im usually saving far more buying online.

    A few billionaires seriously overestimated how much the public gave a crap about them. Is this what the big retailers do to get their way...found this buried article - http://liveoncampus.com/wire/show/3114455?utm_source=Blog&utm_medium=Seeding&utm_campaign=Ritu

    Most small retailers are just making a sustainable profit.
    If you take a small shop rental $55,000 PA double that for over heads then add wages
    That’s about $200,000 profit just to pay the bills.
    at 10% margin that’s $2 Million turnover to keep the doors open.
    The Billionaires Club don’t make their profit selling stuff they make it charging the suppliers to range stuff. EG A major supermarket charges $5,000 per supermarket per line item to range a product, then $15,000 location fee if they want it at eye level.
    This is why many local suppliers cant afford to sell into the big supermarkets and are selling out to the big overseas firms and why the product are dear in Australia where the wholesalers have to bump up the price so they can afford to pay the sell in fees demanded by the national retailers.

    I went into the Harvery Norman store in Gordon, NSW on Sunday. I wanted to buy a PS3 (for my birthday) and also a pre-paid Optus SIM for my iPad. I had $500 in my pocket to spend. Did I spend it there? Did I f*ck. I have never been faced with such crap service. Out of the 5 staff working, 3 had their heads in a broken Photo printing machine (no customers waiting to use it, and 5 or 6 other working machines) and the 2 other staff were un-interested. When I finally got the attention of one of the staff he said "yeah, you get a PS3 and a choice of any 3 games" Great I said, where are the games..."over there in the discount bin" After 2 minutes of rummaging through crap old games that were not displayed and imposible to see clearly I gave up. And the iPad SIM? Optus do a free SIM for new customers - they had it on the shelf clearly priced on the packet at $0.00. When I took it to the till he sacanned it and said $2.00 please. Cue 5 minute arguement that he cannot charge me for something that is free and carries a $0.00 sticker on it. In the end he took $2 out of his own pocket to pay for it.

    Gerry Harvey - if you are reading this you, and your stores are a complete joke. Get with the times and stop forcing people to spend money with your stupid company.

    It's funny reading this. While I agree service is terrible in most stores. I wouldn't blame the "kids".

    I myself am only 18 however when I worked in retail in a computer store. Yes we had our bad days. But I can assure you I sold computers with the trust that I knew what I was talking about. Customers don't always need to know if it has more ram etc.

    They need to be able to trust you and you have less then 30 seconds to build that trust up. As soon as the trust is there. They need to know what they are buying will do what it needs for THEM. Not for the business. I frequently got in trouble for spending to much time with customers. Creating a customer relationship is fantastic.

    As the saying goes. Word of mouth is the best advertising. Now though... I refuse to buy from certain stores due to poor customer service. Especially HN. They will not get my business nor will any of my friends or family get pay $100 for a DIGITAL hdmi cable that does the same thing as the $10 from woolworths. Eh ranting.

      Reece - I can definitely relate. I used to work in sales at a major electonics retailer and I was constantly just making budget while my colleagues were getting big sales and earning good commission. I cared for the customers' needs, they used underhanded tactics to sell big-margin items.

      I'm glad I got out when I did though, as I saw a growing trend of customers asking for my (expert, if I do say so myself) advice, holding and testing the product (I always kept batteries charged and on hand), satisfying themselves that it was right for them, then leaving and buying it online.

      When service is not valued, I'm not surprised that it's not generally a focus in electronics sales. It wasn't long before I sought greener pastures, as my dedication to customer service was going unrewarded.

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