Department store giant Myer’s decision to cull over 100 of its popular brands today sends a strong message to rivals that it’s back in the game, while any simmering retail war with competitors should result in a positive uplift for agencies.
Myer today announced that it had followed David Jones’ lead and culled a large number of brands primarily in the fashion, footwear and homewares space.
Reports say the struggling retailer wants more mid-range brands at the expense of the cheap or the expensive and will favour the likes of Country Road, Marcs, Calvin Klein and FCUK.
The move is largely seen as an attempt to re-establish its core market and compete against its more up-market rival DJs and the plethora of overseas players – H&M, Zara and Uniqlo – that have arrived recently to grab a large piece of the local retail pie.
A criticism of both department stores is that they carry far too great a range for the foot traffic their stores receive. It’s also doubtful that brands that have been punted from the department stores and don’t have their own retail networks will find a home anywhere else.
One agency boss who spoke to B&T on the guarantee of anonymity (one of the players is a major client) agreed Myer had to do something. “You just get no confidence from what Myer is trying to do in the market at the moment,” he said.
“DJs appears to have a better vision where the market is at. Myer have been beaten into the middle-ground and that can be no-man’s land. You’re not budget or not upmarket and you don’t have a very clear positioning. David Jones has always had a more premium approach and that’s starting to show some green shoots for them and they have their digital game face on, and it feels like they’re doing a better job.”
And could any pending war in the retail space translate to added spend for media agencies?
“The two majors will continue to spend money… they’ll continue to go head to head,” he said “How that plays out exactly for agencies remains to be seen. Will it increase spends? It could do, yes.
“The said, fashion brands in Australia have never been great spenders. It’s certainly not like the FMCG brands that are just a much bigger business than fashion ever has been. Fashion brands typically use design companies over ad agencies in any case.
“I don’t think this will have the impact (on Adland) that the supermarkets screwing their FMCG clients on price has had on their marketing spends.”
But is a tit-for-tat war between DJs and Myer a misguided one when the real enemy appears to be these new budget-priced interlopers that have arrived on Australian shores recently? It’s much like the Coles and Woolies stoush in recent years where the two have only recently woken-up to the fact the real enemy has been ALDI all along?
“Wars between whoever aside, I think the two should just deliver what their customers want. I think you’re in trouble when your decision making is based on what your competitors are doing.
“There’s been some great retailers who’ve been able to transform themselves. Think John Lewis in the UK or any number of retailers who’ve managed to remain relevant despite all the changes in technology and different brands and different models coming into their space. There’s still a role for these big department stores, they just need to have an experience that’s worth going into the store for.
“But I’d be more fearful for where Myer is going than DJs. DJs just seems to have a better grasp on where it wants to go strategically than Myer. You just don’t get that sort of confidence from what Myer is trying to do in the market at the moment. David Jones just seems a bit more buoyant,” he said.