Do Department Stores Have A Future In Australia?

In this analysis piece, Australasian Catalogue Association CEO Kellie Northwood (pictured below) does some crystal-balling on the survival of department stores, and explains why one media and marketing channel could save their bacon.

With digital giant Amazon having just touched down in Australia and marking its territory within the retail space, how will local department stores compete?

Looking to the US, where Amazon and other online retailers are in full swing, the April 2016 retail figures saw department store sales decline by 5.6 per cent, while online retailers increase by 10.7 per cent in the same period.

A year later, online retailers gained even more momentum growing a further 15 per cent, while department stores declined 0.2 per cent.

Retail figures in Australia are telling a different story across the same period, seeing a 2.5 per cent lift in department stores.

The interesting piece in this puzzle is every one to two months prior to a retail lift is a catalogue distribution lift. Is that why catalogue marketing remains a key retailer tool?

While Amazon will undoubtedly shake things up in Australia, one thing is for sure when it comes to Aussie and retailers – we love catalogues.

Catalogues have a strong reach of 20.1 million and readership at 69 per cent. Readership for discount department stores sits at a high number of around three million, and brands are using this strong readership to create engaging catalogues that appeal to, and remain in, the minds of customers.

‘Lookbooks’

David Jones introduced a seasonal publication showcasing the latest trends of the season through the eyes of stylists, making its traditional catalogue emulate a ‘lookbook’.

The brand books are a clever way to promote high street fashion and accessories, while reinforcing premium brand positioning.

The publication allows David Jones to place a piece of its brand in the lives of consumers, acting as an effective disrupter to establish it as the go-to luxury fashion chain.

Along with increasing brand awareness among consumers, David Jones’ brand books were recognised by industry peers for excellence at the annual Australasian Catalogue Awards this year, taking home three gongs for its strong brand messaging saturating every page.

Personalisation

At Myer, the ‘one size fits all’ approach isn’t cutting it anymore, with the 2016 MYER Giftorium Christmas catalogue offering MYER One members an individual experience with their names featuring on the front, back and throughout the catalogue.

This direct mail approach saw a 3.4 per cent increase in sales, and demonstrated that catalogues resonate well with consumers when they target specific audience groups.

Frequency

For budget retailers, the only way to stand out from the rest is to promote their steep markdown on prices.

Kmart is infamous for its low prices on sought-after products, contributing to its transformation from bargain basement to success story.

Kmart customers need regular reminding of its ‘low prices, everyday’ in-store bargains, and its fortnightly catalogue showcases an extensive range of ‘must have’ products, with the reward of great value attracting consumers in store.

Kmart’s Play Your Way catalogue delivered strong results, according to its brand tracker for ad engagement, with 75 per cent of respondents indicating that they loved reading the catalogue, and 71 per cent indicating it made them think Kmart has the latest on trend products.

Seasonal sales

Target uses catalogue marketing to establish its brand positioning by promoting seasonal sales.

By promoting sales around holidays such as Christmas, Easter and Mother’s Day through catalogue, it enables Target to entice consumers instore at precious purchase months.

Consumers are made aware of the ‘value’ available, and from this, appealing to their intent to purchase.

Product range

Specialty department stores such as Harris Scarfe engage readers with products on offer through a tabloid-style catalogue.

No space is spared as product range and sales hit you in the face from the time you pick it up, to when you put it down – there is no doubt – you will have access to a wide range of products and great value.

These catalogues act as a platform to hold longer conversations allowing the brand to remain in the mind of consumers.

Despite the advancements in online shopping, Australian department stores are still able to establish brand presence through catalogues.

They are the direct gateway into consumers’ lives, providing insight into what’s instore, and are proving to be a success for retailers capturing consumers’ attention and launching them into action.

Department stores: take note of this strength to increase store sales and respond to the rise of online shopping. Similarly, online retailers are also becoming savvy catalogue marketers.

The battle lines are drawn. Watching the retail space in the coming months will be interesting indeed.

This article is part of a content collaboration between B&T and the Australasian Catalogue Association.