New Retail requires consolidation, not fragmentation July 16, 2013 20:47

On the 2nd of July, in an interview in the Australian Financial Review, Bernie Brookes, CEO of Myer, bemoaned the fact that there are too many retail associations in Australia.

I agree with him.

I would argue though that the plethora of retail industry associations is a symptom. A symptom of a fragmented retail landscape in Australia. I would argue that the origins of the current situation lies in how Australian retail has responded to a sustained and challenging period of structural change and disruption.

Broadly, response to threats take two forms, one is unity (unity is strength) and the other is fragmentation (every man for himself). I’m afraid we have, for now, chosen the latter.

While I accept and respect that retail is fiercely competitive, and always has been, I’m less comfortable with the ‘turf wars’ that seem to have taken hold. The mudslinging between so called offline and online retailers, the predatory practices of restricting supply to certain channels, public lobbying to government on matters that deeply impact Australian shoppers but precludes them for the debate, have all served to amplify the divide in the Australian retail landscape.

Of most concern is that the divide between Australian shoppers and Australian retailers appears to have widened. The result? More Australians shopping from offshore global retailers than ever before. And yes, I have to acknowledge that all of this has converged in an increase – not a decrease – in industry associations representing the divided interest groups.

So why, you might reasonably ask, would I be a participant in yet another one – NORA, the National Online Retailers Association?

This question vexes me, especially given that NORA and its board has as a core aim for NORA, to serve as a catalyst for collaboration, not division, in the Australian retail landscape. The answer lies not in the retailer, but with the customer. We need a retail industry association, in fact we need all current retail industry associations, to be deeply customer centric. Without customers, there is no retail future. The customer, as always in retail, is not only always right, but should be front and centre of every focus and conversation.

We would all have to accept that the growth in so called domestic online retail by 23 percent year-on-year, versus a little over two percent in so called traditional retail, has one clear conclusion. The new (online) retail sector is simply providing a more customer-centric experience to shoppers.

But as the term ‘online’ is quickly ceded to irrelevance, and ‘retail’ becomes ‘retail’ once again, I’m also of the view that there will be consolidation amongst retail industry associations.

Frankly, I welcome this inevitable path; the sooner the better. I’m no stranger to the term ‘creative destruction’, having spent over a decade in online retail in Australia. (I would also, by the way, like to see more retail association heads with stronger hands-on retail experience). I embrace the creative destruction economic theory as a pivotal principle driving retail in the digital age. And in the true spirit of that, I believe I should apply this principal to my role as head of NORA.

Simply put, I’m working tirelessly and ferociously to do myself out of job.

When I wake up one morning and see a unified Australian retail tapestry, a retail that is technology-led, deeply customer-centric and increasingly global in its outlook, then my job here is done.

I welcome that day, and I respectfully challenge other retail industry association heads to adopt a similar view. After all, in the new retail you only get ‘control’ by giving it up.