Ex-Myer boss Bernie Brookes: ‘Tyranny of distance’ slowed Aussie etail adoption

bernie brookes optus conferenceFormer Myer chief executive Bernie Brookes has told retailers their businesses challenges are “enormous” as he suggested Australian retailers have been slow to react to move into the online arena.

Brookes told a conference this morning that retailers are operating in a disrupted marketplace but said the smart ones, who are adopting an omni-channel approach, will emerge stronger.

An increasingly knowledgeable customer, online sales and emergence in Australia of overseas brands were some of  the key issues impacting the retail market.

A more careful and cautious customer who is reluctant to overspend their budget or rack up credit card debts, has also impacted the industry, Brookes told the Optus Vision conference in Sydney.

Brookes, who left Myer in March after a tough period for the department store, said the ever increasing desire of consumers to research and purchase online was impacting bricks and mortar sales.

“The customer is in control and they are very savvy,” he said. “And they are at the forefront of fashion. Years ago Australian retailers used to be able to bring the Paris and London or New York fashion the following season, but not now. It has to come the same season.

“Interestingly too, they are shopping by category. No longer are they coming in and saying I want this brand. They are coming in and saying I need this and then they say what are the resumes of brands they you have.”

He said consumers now love the idea of gifts and to be rewarded, and see retail “as an opportunity to enrich their lives”.

“So the challenges facing retailers are enormous. Firstly omni channel, there are a large number of competitors around with the ability to shop something out of the UK or US at a moment’s notice.

“In Sydney with the number of international competitors you could be anywhere in the world now.”

Brookes said 15 of the top 20 retailers in the US have bricks and mortar locations, meaning the “pure play” model is not as significant as it sounds.

“The ability to integrate bricks and mortar combined with online is very significant,” he said. “The other interesting part us that everyone says the internet is about price, and whoever has got the cheapest prices is going to win.

“Yes it is one common denominator for success but range is also important, as is the ability to get the product when you want it, and the ability to get it delivered in good order.

“So we are now seeing a move away from the price orientation of online towards a similarity of what occurs when you go into any supermarket or department store.”

He said it will see the continued decline of the traditional bricks and mortar sales around the world. But he added that companies are now investing more in social and e-commerce than there retail networks and that will “eventually” compensate for that decline.

“But there will be a transition period that we are in at the moment where people have got the infrastructure and stores that they may not need going forward.”

But he said retailers in Australia are playing catch up and have been slow to get into the retail space.

Brookes blamed the “tyranny of distance” and said it took Australia a long time to become confident about online transactions with fraud “always top of mind”.

But he added there was now “big investment” which could give Australian an opportunity to “piggy back off the learnings of the past and perhaps ever overtake those learnings”.

Brookes also produced figures which predicted online sales in Australia would represent just 2.9 per cent of overall retail sales by 2017 compared with the global figure of more than 10 per cent.

Steve Jones


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