Myer once stood for the aspirational middle class, but now it’s lost sight of who its customers are
In this crossposting from The Conversation, Swinburne University of Technology's Sean Sanda looks at how Myer’s brand identity has slowly chipped away over time.
A big part of retail group Myer’s problem is that it has tried to be all things, to all customers. Myer has tried to hang on to its high-end customers of old, while trying appeal to value-conscious, bargain oriented customers who only shop on sale.
Its place in the marketplace, and in the mind of the consumer, remains unclear. This week, after consecutive write-downs, the share price continues its downward plummet and sits around 54 cents (not far off a tenth of its original share float value of $4.10). The Myer board then dumped its chief executive this week, citing the need for urgent action to stop a fall in sales and earnings.
For centuries, department stores have ruled retail, and in Australia retail was ruled by Myer and David Jones. From the 1800s these stores linked Australians to the world, giving Australians a taste of high fashion and exposing shoppers to luxury brands not present on Australian shores.
At their height, department stores focused on the needs and desires of fashionable women. These stores offered female shoppers the freedom to browse and shop, safely and decorously, away from home and from the company of men. Department stores had a niche, a clear value proposition, and clearly knew who their customers were.
Fast forward to 2018, and department stores like Myer no longer reign supreme.
No doubt, the past few decades have been turbulent for the retail industry, with the growth of online retailing, the ability for consumers to comparison shop on their mobile while in-store, weak consumer sentiment, and the influx of international retailers. However, the same market conditions have been present for all retailers.
Myer’s brand identity has been slowly chipped away
For any brand, the unique place the brand occupies in the mind of the target consumer is its essential value. It reflects a unique selling proposition and defines exactly how the brand will compete in the marketplace (including all of its subsequent activities such as product range, pricing, marketing communications, desired experience and so on).
Historically, Myer (like many department stores in the western world, including Macy’s in the US, Marks and Spencer in the UK, and many others), was a middle class brand, located at a desirable address, and stood for the pinnacle of accessible quality on the high street.
With few competitors, in the past department stores competed on quality service, a broad range of well-regarded brands that appealed to the emerging middle class, standing for quality and a degree of fashion forwardness (without being so edgy as to turn off the mainstream). As such, the stores also represented a source of aspiration for working-class consumers, something to treat oneself to, to shop for special occasions, and to peruse when you wanted to signal a sense of achievement.
However, with greater market fragmentation, a wider range of needs to appeal to, and the emergence of large numbers of well positioned local (and global) brands, Myer has struggled for identity and business.
Myer’s lack of clarity in the brand’s unique selling point means it’s being attacked at the top and bottom end of the market. At the top end of the market, the expansion of entry levels products, such as perfumes and accessories, and extensions of French, Italian, UK, Japanese and American luxury brands means consumers wanting to signal their status have a lot of choice.
At the bottom end of the market, fast fashion brands such as H&M, Primark and Zara have strong identities, recognisable brand names and a clear sense of who they are selling to (younger consumers who wish to blend in by standing out). These brands do not appeal to everyone, and are even loathed by some, but therein lies their strength. In appealing to a narrowly defined set of needs and executing that position in everything they do, they build loyalty, resulting in ongoing sales.
Trying (and failing) to reach a target market
Myer’s lack of brand clarity is also reflected in its practice of relying on other brands to give it a sense of cool or iconicity. In 2015, Myer went through a transition, shedding several long standing management team members who had transformed, and floated, the iconic retailer. Myer stalwarts, including CEO Bernie Brookes and CFO Mark Ashby, passed the helm to a new generation of management, including Richard Umbers as CEO and Daniel Bracken as Deputy CEO. Hopes were high for the “New Myer” strategy.
The New Myer strategy focused on female shoppers, high-profile brands, improved service and in-store experiences, complemented by a strong online shopping platform. Investors were asked to place their faith in a A$600 million plan to save the retailer, including a deal with Topshop.
In August 2015, when the strategy was announced, Myer’s share price hovered around A$1.26. After taking a 20% stake in the Australian Topshop franchise in 2015, Myer’s aspirations for Topshop shattered in 2017. It closed 17 Topshop stores, writing off A$45 million. Myer shares subsequently closed at an all-time low of 82 cents.
This approach of using each season or new release to provide a positive spillover for the main brand is old-fashioned. It relegates the brand to lower status than the means of reinforcing its image. By comparison strong brands use their identity to drive every aspect of their business.
Myer’s branding challenge is also its reactive stance. Its focus as part of its New Myer strategy has been on “an intuitive omnichannel Myer, easy to choose, and easy to use, delivered in-store and online”.
But this “seamless integration” between digital and in-store is an example of trying to fend off the threat of online retail, rather than being on the front foot. While there is nothing wrong per se with trying to integrate channels, placing this aim at the heart of one’s strategy leaves us questioning: where is Myer’s brand?
Ironically, much of the problem stems from looking outward too much – looking for something to entice consumers, speak to the latest trends, adopt the latest technology, or respond to the latest competitive threat. While there is nothing wrong with any of these strategies, they must be framed through the lens of the brand.
What is lacking is Myer’s heritage, and the need for this to be carefully reframed and updated for the present day. If the brand once stood for middle class aspiration, Myer needs to now consider how the middle class has changed, and identify where there is a a role for an iconic Australian brand to service a new set of needs, for a new generation of consumers.
Consumers have changed, and so too has aspiration. The question leaders of a department store like Myer need to ask themselves is how can a retail brand like Myer be as desirable today, as it was in the past?
Sean Sanda is associate professor of marketing at Swinburne University of Technology, and Michael Beverland, Professor of Fashion Enterprise, RMIT University. This article was originally published on The Conversation. Read the original article.
Great article. Myer’s lack of clarity is also highlighted by its incredibly bland advertising. There is no point of difference highlighting, incredibly flatlined media presence and a descent into “Sale,Sale” desperation. As rightly pointed out, Myer as a brand fails to exist. The tragic fallout to the Advertising industry is enormous. The huge and vigorous in-house retail advertising department provided a training ground for generations of Australians. In turn, they took a high standard into other retail arenas and helped maintain retail Advertising with substance. Agencies were able to rely on steady budgets from incorporated brands. And major agencies with a large and solid Myer media spend could hire well. In a small country, Myer was a backbone to many copywriters, artists and brand managers training. Small brands could grow and provide constant work for likewise smaller agencies. The arrogance of the Myer board in ignoring the widespread effect Myer has on many sectors of Australia’s economy shows inward vision indeed.
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There is something wrong with Myer’s strategies if they alienate the Myer customer. The company is following in the footsteps of Gowings, which tried to broaden its appeal and only succeeded in alienating its traditional customers. Today its sign is still there in George Street but the business is long gone. I can date my disaffection from seeing a large display of music in the City store under the heading “Urban”, which proved to be exclusively from black ghettos in the United States. The classical music I had bought from Myer when it was Grace Bros was on the outer, if it was there at all. I haven’t been back for years.
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If Mark Ritson was advising would love to hear his thoughts.
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Myer’s problems go much, much deeper than brand and marketing.
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You cannot pin this entirely on marketing. The Myer, and DJ’s shopping experience just doesn’t deliver satisfaction anymore. The stores are tired from years of wear and tear without any serious investment in renovation, apart from co-op funding by cosmetics.
25 years ago a trip to Myer or DJ’s was an outing that was full spectacle, glamour and desire from the bottom floor to the top. Perfectly groomed shop assistants eager to help and talk with wonderful visual merchandising throughout the store enticing customers. Now, unfortunately the exact same racks barely stand upright in large rooms void of any real personality, lined around the edges with tired shelving. The staff which one can only describe now as pedestrian are scattered thinly, looking like they are dressed for the Woolworths checkout, and have no interest other than take your card and shove your purchase into a bag. It’s a sad display overall.
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There problem is also that there is no longer an aspirational middle class. Squeezed by the government, this audience is now seeking value more than ever, and has realised that you can buy the same for less, from other places, be that bricks and mortar or online.
With no customer base, who’s marketing supposed to win over?
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Understanding your customer and their experience and aligning your brand to your customer and ensuring all parts of your business do so too is now the key strategy for successful retailers.
Take a look at Karen Millen in the UK and see how they have moved from traditional season launches to aligning their brand and proposition intimately with their customers. They are not trying to be everything to everyone but being laser focused on their customer and their needs.
For more insight
http://www.thedrum.com/news/20.....l-strategy
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Well not really. Myer and DJs appealed principally to young, high spending women, usually of a working class income, who were looking for stuff like perfume, make up, fashion and homewares.
Myer has been going backwards steadily since they decided to become a stuffy frock salon for north shore matrons.
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