In this guest column, behavioural analyst and group CEO of The Brand Institute of Australia, Karl Treacher (pictured below), runs his expert eye over beleaguered retailer Myer and, he says, if things don’t change and fast, it’ll be epitaphs next…
Without knowing it, humans default to replicating behaviour that served us in the past. It’s like a built-in safety device that works in so many cases. Myer, and the way it needs to be led is not one of those cases. In fact, by looking back to move forward, Myer will come to a complete stop.
Myer has struggled for a long time to find a brand position that is worthy, and that marries with the established brand image of yesteryear. And that’s just it, we’re not in yesteryear (somewhat obviously), we’re in an age that swiftly and often publicly executes brands that fail to remain relevant day in day out. With the latest high-profile media spat involving major shareholder Solomon Lew having its way with Myer’s faltering reputation, the business and brand are approaching a crucial fork in the road.
The upcoming strategy update address by CEO Richard Umbers needs to be something straight out of Steve Jobs’ magic bag. The approach to date, as part of Myer’s five-year strategy is far too conventional, relying on proven, conventional retailing practices that worked…in the past. Proven in the past. The genius of Jobs or any visionary leader is in building strategy that speaks to future needs, not stated observed needs of today – as these all too quickly become hygiene tickets to play.
When it comes to Myer’s reputation, things aren’t great. So many attributes of their reputation are currently in question – not the least being their financial performance, as highlighted by their major shareholder demanding Q1 reporting immediately.
Of the many roads facing the Myer board, there is only one that will begin to rescue the brand and make in-roads into repairing its reputation. Forget the past. There is nothing that we’ve researched across the Australian retail landscape that suggests Myer can continue to operate using existing business and customer experience principles. That includes directional assets used over the past two years, which have shown Myer’s hand regarding it’s lack lustre penchant for disruptive innovation…and disruptive innovation is exactly what it needs.
However before Myer begins engaging in demonstrative change, it needs to do one thing first. The thing it’s needed to do for over 15 years – find a position and own it. We audited Myer in 2003 and the issues it had then remain today. Australian retail doesn’t have room for two large department stores occupying the same (or very similar) market position.
At least not enough room for them both to do well, and satisfy shareholder expectations. Before the internet sure, now – no way and we all know this. However Myer’s behaviour and actions suggest it’s a slow learner. DJ’s has won that battle; it owns it. Interestingly (and importantly for the Myer board), there is a market position for Myer that will work. A position that would rescue them, but from what we see at present it may never be realised.
The writing is clearly on the wall for Myer should it remain committed to it’s current strategy and rate of change. What happens with regard to the ongoing feud with Solomon Lew and Premier, Myer’s major investor will be interesting to watch but not the main event.
The main event will be one of two things : (i) the extraordinary story of Myer and how it evolved into the hearts and minds of its diverse customer base (and Australians in general) or (ii) the great disappearing act of one of Australia’s iconic retail brands and a story of risk-led transformation that failed to move this iconic brand into the current day success it could and needs to be.