It's time to shine Indigenous design is hitting the runway for the first time ever at Mercedes-Benz Fashion Week Australia this year - Inside Retail
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Issue 2274
04 Mar 2020
RRP $14.95
insideretail.com.au
It’s time
to shine
Indigenous design is hitting
the runway for the first time
ever at Mercedes-Benz Fashion
Week Australia this year.
In this issue
News Opinion Feature
A look into the year ahead Fact or fear? West side Story
Australia Post outlines how e-commerce It might be time to dial down the panic Here’s why retail businesses are looking
has and will continue to change. p2 surrounding coronavirus. p9 west for new opportunities. p12
NEWS
Report: A peek into the
future of e-commerce
The latest data released by Australia Post gives us a glimpse into
what the industry will look like in the years ahead. By Dean Blake
W
hile retailers have been noticing a shift in the holiday however, as staying on top of every other trend in the industry
season over the last few years, data released by Australia requires capital to be spent.
Post on Friday gives shape to what the Christmas period This can be seen in the myriad retailers, such as Ziera, that
will look like in years to come. entered voluntary administration or liquidation after attempting
Online sales over the 2019 calendar year grew 17.2 per cent on the massive structural changes.
prior year, while Cyber Week was the busiest period “The sustainability of a business’s commercials is becoming just
for online shopping – 82 per cent up on an average week in the as important [as environmental sustainability],” said Franzi.
same year. Australia Post is not immune to these same pressures, with the
And despite all the talk of Black Friday and Cyber Monday’s business’s letter delivery revenue falling 9 per cent to $1.1 billion,
impact on Christmas, Australia Post’s head of e-commerce while its parcels and services division rose 13 per cent to $2.69
platforms and marketplace, Ben Franzi, told Inside Retail Weekly the billion in the half year to December 31.
impact was equivalent to only around 1 to 2 per cent of total This result ultimately led to a 46 per cent fall in group profit for the
Christmas sales. half to $83 million. IRW
“It hasn’t radically eaten into the season, but it did move some
shoppers. It delayed and softened the peak, but only ever so Online sales grew 17.2 per
slightly. It wasn’t dramatic,” Franzi said. cent year on year in 2019,
according to Australia Post.
“The difference [last year] was that it had become an industry
standard. Three years ago, it was hardly on the radar. Two years
ago, there were early adopters and it was an event, but [2019] was
like nothing we’ve seen.”
Retailers, both physical and online, were getting in on the Black
Friday and Cyber Monday action, while consumers were far more
interested in the sales event than in previous years. This ultimately
led to a 31.6 per cent growth for Black Friday year on year.
Compared with the 18 per cent growth Boxing Day saw,
down from 27.9 per cent the year prior, Black Friday’s growth is
“unprecedented”.
“Boxing Day will always have a place to play, and retailers will
always want to grow sales post-Christmas Day. But I think Black
Friday and Cyber Monday will continue to grow, cannibalise and
impact Boxing Day moving forward,” Franzi said.
Being prepared is key
Based on what Australia Post saw in 2019, Franzi explained, the
most important things retailers can do for the year ahead is to
ensure they have a solid plan and don’t underestimate the popularity
of sales events, and in control of their finances.
“Retailers got caught out by how big Cyber Week was – as did we.
It’s going to be really important that retailers don’t make mistakes
like they did in 2019,” Franzi said.
“Customers will be less forgiving this year with deliveries that are
sometimes two weeks’ late.”
The trends Franzi outlines include the ongoing growth of sales
events, speed of delivery and service, making an offer more
convenient, and a greater focus on the sustainability of a business’s
supply chain and products.
The financial sustainability of a business is equally important,
2 insideretail.com.au
NEWS
MBFWA fetes indigenous design
In an effort to showcase emerging indigenous talent,
Mercedes-Benz Fashion Week Australia will be hosting a
new runway event this year, specifically for talented designers
in the community. By Jo-Anne Hui-Miller
F
or the first time ever, indigenous designers will be in the designers is wide and varied. For some, they may be a 10-hour drive
spotlight during Mercedes-Benz Fashion Week Australia away from the nearest town over a bumpy road, so they may have
(MBFWA) on May 15 in Sydney. trouble accessing training. Or they may need help with printing or
“As we celebrate the 25th year of Mercedes-Benz Fashion Week when a machine breaks down. Other designers may show great
Australia, it is incredibly exciting to welcome this intersection of promise, but they’re trying to work out the right business model for
emerging and established designers who represent the vibrant them and access the right customer base, said Giles-Kaye.
and diverse fabric of our country during this significant moment for “One of the big differences [with indigenous designers] is the need
Australian fashion,” said Natalie Xenita, executive director of IMG’s to protect the culture that goes into the work. I think most, if not all,
fashion events group, Asia-Pacific region. designers have a strong cultural influence on their designs and how
The Australian Indigenous Fashion Showcase at MBFWA grew they protect that and how that’s valued is a really unique aspect to
out of the success of the Country to Couture event organised by them. There is still a big divide in our country between indigenous
the Darwin Aboriginal Art Fair Foundation (DAAFF) each year in and non-indigenous people; and the day-to-day challenges that all
August. David Giles-Kaye, head of indigenous fashion projects at indigenous people in Australia face mean pretty much everything
the DAAFF, believes the event will be a great opportunity for the they do is harder,” he explained.
wider community to better understand the breadth of indigenous “I think so many of us are very aware of those social issues
design and talent. In the coming weeks, the DAAFF will announce but have not had a connection [with the indigenous community].
the five designers who will be taking part in the MBFWA showcase, This is one of the great things about art and fashion – it can help
unveiling 10 different looks each for the runway. connect indigenous and non-indigenous Australians and I’ve seen
“I think people will be surprised about the incredible diversity. that in the last couple of years. This is where fashion shows are
Indigenous art is not just one thing. I think one of the most amazing really important – where non-indigenous people can interact with
things is their connection to stories. All fashion design should indigenous people and break down those barriers.” IRW
connect people to stories from the designer, and we don’t see
enough of that in the industry,” Giles-Kaye told Inside Retail Weekly.
Consumers are also looking for more meaning in the products
that they purchase and searching for a connection with brands and
designers, something which Giles-Kaye said indigenous fashion has
“in spades”.
“Every single indigenous designer is telling the stories of their
culture, communities and ancestors through their fashion. It’s
an amazing connection that you have when you engage with
indigenous designers – you’re connecting to an ancient culture.”
Country to Couture is held every August in Darwin, where artists
from remote communities work with a designer to create a collection
for the show. Other events on the DAAFF calendar this year include
the first National Indigenous Fashion Awards, which will follow the
music and art award programs that also take place that week.
Giles-Kaye was previously the CEO at the Australian Fashion
Council, where he was also working towards putting indigenous
artists in the spotlight and learning more about the community.
“I’m very keen to see what I can do to help in my very humble
‘white person’ way. The key part has been in listening and seeing
what people need,” said Giles-Kaye. “A really positive challenge
of that is to then try to build pathways for everyone, from people
in remote communities with little resources available to those
who are doing amazing things in cities. Then there are indigenous The piece is a collaboration
organisations that are growing to support designers, so we want to between Torres Strait Islander
help them as well.” artist Lisa Waup and fashion
designer Ingrid Verner.
Like all business owners, the support required for indigenous
3
NEWS
Retail Week shines a
light on local industry
From bushfires and floods to coronavirus, the local retail sector has
been hit with a series of distressing events. What better time to pick
ourselves up and get inspired for the future than Retail Week in
Melbourne? By Jo-Anne Hui-Miller, photography by Hannah Caldwell
D
uring Inside Retail Live last week, audiences were rolling
Shoes of Prey co-founder Michael
with laughter when comedian Tessa Waters transformed Fox shared the highs and lows of
into some of retail’s most amusing stereotypical customers, the business.
from Lauren, the millennial who’s “adulting for the first time ever,
lol” to Anne, the cheery widowed baby boomer who’s ready to
splash her cash.
The General Store’s chief strategy officer Matt Newell hosted
a fireside chat with buddy and Shoes of Prey co-founder,
Michael Fox, who opened up about where his business failed –
and where he’s next taking his career with new plant-based meat
startup Fable.
We celebrated the local online sector with Internet Retailing’s
annual Top 50 People in E-Commerce and on Thursday, keynote
speaker Danny Lattouf asked, ‘What the actual fuck is going on in
retail?’ then inspired attendees with the highlights of a recent trip
to the US, including Starbucks, Nike and Dolby. ►
QUT marketing
professor Dr Gary
Mortimer was a
fantastic MC during
Inside Retail Live.
Marketing expert
Amanda Stevens
discussed the changing
consumer at Live.
4 insideretail.com.au
NEWS
Domino’s group chief The General Store’s
digital and technology Danny Lattouf hit the
officer Michael Gillespie at stage during his keynote.
the Retailer Awards.
Dan Murphy’s head of
e-commerce Lynna Barrett at the
CEO dinner on Monday night.
Lush picked up the award for in-store
customer initiative at the Retailer Awards.
5
NEWS
Meanwhile in the afternoon streams, Domino’s group chief digital Adam Ioakim from Emarsys
and technology officer Michael Gillespie, Anna Samkova from the at the CEO Dinner.
PAS Group and Nathan Bush from agency 12High enjoyed such
a fascinating panel discussion that it actually ran overtime – and
no one in the audience actually left. Then Cameron Lawson and
Rachel Tigel (or JLo and Shakira, as they called themselves) took
the audience through the highs and lows of Forever New’s recent
e-commerce transformation.
And of course, after a two-day, jam-packed schedule, attendees
really let their hair down at the Retailer Awards at the Timber Yard,
where some of the industry’s best and brightest were recognised for
their great work across 11 different categories.
Thanks to everyone who came along with us to Retail Week in
Melbourne. We had a ball. See you again next year. IRW
PAS Group CEO Eric
Morris was a keynote
speaker at Live.
Booktopia’s Wayne Baskin and
Mark Teperson from The Accent
Group celebrated being in the Top
50 People in E-Commerce list.
6 insideretail.com.au
7
NEWS
Woolworths payroll error gets worse This week’s top 10
Our most read stories from the
The problem of staff underpayment, which has
past week at insideretail.com.au.
brought retailers large and small under investigation,
has once again hit Woolworths as its earlier
estimates of liability have blown out significantly.
The Sydney Morning Herald has reported that
investors are calling for resignations of senior
executives and board members due to the
magnitude of the error.
The grocery giant has increased its estimation of
staff underpayments by $15 million, with the total
figure now expected to be at least $315 million.
The AFR report that when $80 million in interest
payments and other costs are added, the total
expense of the underpayment scandal will touch
$400 million, with four years of payroll investigations 1 Taco Bell owner to expand after
solid first half
still to come.
To date, Woolworths says it has paid back $69
million to staff. 2 How not to be a boring retailer
The company made the announcement alongside
its half-year results, saying that despite a strong 3 It’s not a store, it’s a place of worship.
Meet the new brand experience
performance, it was “disappointed” to have let staff
down in relation to underpayments.
“The calculations of the salary payment shortfall
involve a substantial volume of data, a high degree
4 Q&A with Coles’ Steven Cain
of complexity, interpretation, estimations, and are
subject to further analysis of prior periods and the
5 Luxury Escapes opens experiential
pop-up in Melbourne
Fair Work Ombudsman’s ongoing investigation,” it
said in a statement to the ASX.
6 Harvey Norman H1 profit hit by
bushfires
Harvey Norman braces for corona hit 7 Kathmandu embraces solar power
to reach net zero target by 2025
Harvey Norman says it expects the coronavirus to
deliver a hit to its bottom line, as consumers – already
spooked by the bushfires and extreme weather –
8 Tax holiday for virus-hit traders in
Queensland
react to the new threat to stability.
9
The company refrained from solid guidance on P.E. Nation unveils 30-piece
the matter, preferring to wait until the threat is collection for H&M
better understood.
10
The furniture and electronics firm posted a
Caltex rejects EG Group’s
subdued Christmas period and the retailer’s first-half
acquisition offer
profit slipped by 4 per cent. Some stores in regional
areas closed temporarily due to the bushfire crisis.
Harvey Norman reported a net profit of $213.59
million for the six months to December 31, with its
overseas ventures outperforming local operations.
Revenue from local franchisees, which include the Comment of the week
Domayne and Joyce Mayne stores, was down 4.2 per
cent to $497.84 million.
The group has 544 franchisees in Australia, and
194 franchised complexes. “Retailers haven’t evolved, kept stores
However, company-operated sales revenue, which open that are unprofitable just so the
includes 95 overseas stores was up 5.4 per cent to name is out there and no one else
$1.24 billion, and five new stores were opened in can compete.”
Malaysia during the first half.
Sales rose in all regions, but the biggest
Ram - How not to be a boring retailer.
improvement came from the 15 stores in Ireland and
Northern Ireland, where sales rose by 12 per cent to
$249.08 million. IRW
8 insideretail.com.au
OPINION
Let’s dial down the
coronavirus scaremongering
First it was bushfires, then it was floods, and now Australia is
being impacted by coronavirus. But is the outbreak really worth
all the panic and fear? By Jared Dickson
T
he coronavirus could not have struck at a worse time for
Australian retailers still reeling from the impact of bushfires
and floods, particularly in NSW and Victoria.
The coronavirus has shuttered restaurants and other independent
businesses in popular Asian shopping and hospitality precincts and
The real danger of
has reduced foot traffic in shopping centres.
The panic around the outbreak is testing already fragile consumer
coronavirus is not the
confidence, but it also looks set to disrupt supply chains in a double
whammy for retailers.
disease itself but the panic
It also hit at the worst time in China with millions of people in
transit for the country’s New Year holidays.
it has created.
According to the Australian government’s Health Department
website, global travel has carried the virus to 60 countries but the
death rate from coronavirus is less than 4 per cent of those infected conventional media and inaccurate theories and rumours on social
and most of those deaths have been attributable to poor or late media are all further denting consumer and business confidence
access to medical attention. levels.
It is worth comparing the fewer than 3000 coronavirus deaths A mooted further interest rate cut by the Reserve Bank will do
reported so far by the World Health Organisation with the more than nothing to boost confidence and counter the negative impact of the
16,000 influenza deaths in the same period in the US alone, says the coronavirus scare, falling job numbers and higher prices for many
US Centers for Disease Control and Prevention. retail products, including food.
The US alone has had three times the number of influenza What is required to address falling consumer confidence is some
infections compared with coronavirus in the same period. rational political and medical messaging and reassurance.
The Department of Health site states that Australia has identified Restoring business and investor confidence is arguably a much
fewer than 30 cases of coronavirus, at least 15 of which have tougher proposition, with the looming prospect of supply chain
fully recovered. One person in Perth died earlier this week. disruption and higher costs for imported products, as well as lower
In comparison, 50,000 Australians suffer a stroke each year, says demand for exports for as long as the coronavirus scare captures
the Stroke Foundation. global headlines.
The real danger of coronavirus is not the disease itself but the However, like government, retailers and other businesses need
panic it has created, the rumours and speculation that are fanning to play a part in building consumer and investor confidence and
fear and a disproportionate reaction notwithstanding the infection encouraging staff in stores to be positive and buoyant.
rate would be expected to rise. The first half of the 2020 financial year was relatively weak
Australia has certainly introduced stringent entry requirements on in terms of sales growth and earnings despite the fillip of the
all international travellers, including quarantine periods for citizens November Black Friday and Cyber Monday sales events.
returning from places that have reported coronavirus infections. For some retailers, including Bardot, Harris Scarfe, Colette,
It also has the medical facilities to provide treatment for any Jeanswest, Curious Planet and Ishka, dismal first-half trading has
people who have been infected and some pretty basic personal forced them into administration.
hygiene measures significantly reduce the chance of infection. While most, if not all, of those retailers are expected to be
Yet the hysteria around the outbreak has savaged the rescued, albeit scaled down, the recovery for them and an upturn
sharemarket and the Australian dollar, which will increase the cost in the fortunes of other chains will require effective, confident and
of goods sourced overseas. It has created yet another challenge for positive customer engagement strategies.
retailers as tourism numbers plummet, international students are Most publicly listed retailers have warned investors that
blocked from entry to Australia and some consumers curb the time profitability for the full financial year will be influenced by the
they spend in public settings. bushfire, flood and coronavirus events.
Government budgets are being eroded and economic forecasts The warnings are prudent; but rather than accept an inevitable
trashed by the financial impacts of the bushfires and floods over jolt to sales and earnings, retailers need to provide consumers
summer and the compounding shock of the coronavirus. with reassurance and relief from the doom and gloom and
The global reaction to coronavirus, the crisis reporting of crisis mindset. IRW
9
NEWS
Around the globe
BB&B to cut 500 management jobs which enables a customer to buy from an online retailer and
pay for their goods in four payments, is backed by the
US home-furnishings company Bed Bath and Beyond is to cut
Commonwealth Bank.
about 500 jobs in response to a net sales drop of 9 per cent last
This is the first year in which Klarna has posted a loss since it
quarter and a further drop of 5.4 per cent in the first two months
was set up in 2005, making it, according to Reuters, an outlier
of the current quarter.
among tech companies which often lose money for years.
The company said it would focus on management positions
Klarna’s 2019 operating loss was 1.1 billion Swedish kronor ($117
that were redundant or not essential rather than those which are
million), against a 160 million kronor profit for 2018. The company
customer-facing.
said it was not worried by the results, which were due entirely to
“We are announcing extensive changes today to right-size our
investment and had been flagged earlier to investors.
organisation as part of our efforts to reconstruct a modern, durable
business model,” CEO Mark Tritton said in a statement. “We do
not take this action lightly but, while difficult, these measured and
Walmart eyes Asda sell-off
Walmart is attempting to unload a stake in British grocery chain
purposeful steps are necessary.’”
Asda, which failed last year to merge with Sainsbury’s. Walmart
USA Today reports that the company expects the cuts and other
bought Asda in 1999 for £8.7 billion.
efficiency measures will save several hundred million dollars.
Asda, like most traditional food retailers, has been losing market
The paper also reported that previously announced closures of up
share to German discounters Aldi and Lidl, and its Christmas sales
to 60 stores were still planned, but that 20 of the closures would be
were down.
delayed pending the results of other cost-cutting measures.
Reuters reports that private equity firms were most likely to be
Amazon cracks down on corona cons interested in taking a stake in Asda, and that analysts expected
Walmart to retain a stake in the company. IRW
As fears and rumours about the coronavirus spread, Amazon has
been forced to withdraw more than a million products that made
false claims to be cures or defences for the deadly disease.
The giant online retailer has also responded to apparent gouging,
as prices for such ordinary items as sanitising gels and facemasks
soared, warning sellers that inflated prices would not be tolerated.
Reuters reports that one merchant, for example, offered a 10-pack
of N95 masks for $128, up from a recent average price of $41.24.
The company said it has monitored for price spikes and false
claims through a mix of automated and manual review of listings.
Ikea cuts greenhouse gases
Ikea has reached another milestone in its quest to become cleaner
and greener, as carbon emissions across the chain fell for the
first time last year, according to a sustainability report released
last week.
The world’s biggest furniture brand attributed the positive
numbers to its investment in renewable energy plus significant
increases in energy efficiency of the lighting and appliances range.
Ikea maintained steady sales growth of 6.5 per cent while its
footprint decreased by 4.3 per cent to 24.9 million tonnes, or FY16
levels, Ecotextile News reports.
Late last year Ikea announced plans to invest €200 million ($370
million) to both increase renewable energy within its supply chain
and to offset CO2 emissions via better forest management.
Ikea is aiming for its chain to be climate positive – where it cuts
more greenhouse gas emissions than it emits – by 2030.
Klarna posts loss after expansion
Swedish online buy now pay later service Klarna has reported its
first annual loss after a year of vigorous expansion in the US,
Europe and Australia.
The company links up customers with retailers like H&M, ASOS,
Boohoo and Ticketmaster through its online lending platform, and Private equity firms are
says it now adds a new merchant every seven minutes. most likely to want a stake
in Walmart’s Asda.
Klarna launched in Australia at the end of January. The service,
10 insideretail.com.austop, collaborate
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11FEATURE
For retailers, it pays to look west
While NSW and Victoria remain the jewels in the Aussie
property market, out west, entrepreneurs are getting more
bang for their buck. By Nick Hall
F
rom the golden beaches of Perth’s northern shore, where “There is a lot of economic activity currently happening across
surf breaks rival those seen anywhere in the world, to the WA,” Ibrahimi continues.
vast Outback expanses that dazzle tourists and natives “Perth CBD leads this progress with several major refurbishments
alike, Western Australia is the state that offers a slice of everything and redevelopments by key landlords, including the redevelopment
Australia has to offer. of Carillon City and Piccadilly Arcade and the completion of work
And for the first time in a long time, buyers and renters are cashing in Enex 100, Raine Square and, more recently, Forrest Chase in the
in on Australia’s not-so-hidden gem. heart of the city.”
Lending restrictions have loosened, in line with a falling interest
rate that has given way to an emerging middle-class economy. It’s New developments
a trend that all major cities across Australia are experiencing, but In Sydney and Melbourne, the infrastructure race seems to
in Western Australia, where commercial interest has traditionally be slowing, however, across the Perth CBD, construction and
waned, things are heating up. development are underway. In fact, the city’s newest developments
“The current market is ripe for investment opportunities,” says have an underlying value of just below $12 billion, making Perth one
Ahmad Ibrahimi, head of retail leasing for the Perth arm of property of the fastest growing regions in Australia.
firm Colliers International. Ibrahimi says residential interest has expanded the city scope,
“Interest rates are at an all-time low, while spending per capita in giving birth to a number of as-yet-untapped areas.
WA continues to outpace the national average. As retail footprints “Historically, Perth has had limited retail options between the CBD
reach saturation and in some cases are cannibalising one another and a few established regional shopping centres. That has changed
in other parts of Australia, in WA, landlords are still responding to significantly during the last decade as the housing market expanded
growing demand from retailers looking to come west.” north towards Alkimos, south towards Mandurah and east along
Take a look at the breadth of international chains that have made major growth corridors.”
their way to the state over the past few years and it’s easy to see Southeast of the state’s capital, the population growth impact
that interest is swelling out west. Big-name brands such as Uniqlo, is plain to see, as highlighted by the recent $350 million Westfield
Zara and H&M now call WA home, with international giant Costco’s Carousel redevelopment.
first of two confirmed stores set to open next year. Located just 12 kilometres from the Perth CBD, the retail
“Retailers, especially those who are gearing up to enter the precinct has a total trade area population of 640,000, buoyed by its
west, stand to benefit the most from this as landlords look to host proximity to both Curtin University’s Bentley Campus and Murdoch
brands and concepts that help to differentiate them from others,” University’s South Street Campus.
Ibrahimi suggests. The 2018 redevelopment saw an additional 70 specialty retailers
So, with construction on the horizon and a wave of new brands, added to the mix, taking the total number of offerings to 350 across
both international and domestic set to make WA the next big retail the fashion, food, lifestyle, dining and entertainment verticals.
market, where can eagle-eyed franchisees look for a bargain The redevelopment – alongside the launch of fellow retail
business opportunity? precincts Yagan Square and Raine Square – has helped to extend
the Perth CBD outside its traditional town borders.
Perth CBD “The combined investment of over $2 billion has resulted in world-
Similar to its east coast counterparts, WA’s capital presents the class retail offering across the state that has injected billions of
strongest opportunity for prospective small business owners. dollars into the local economy, creating jobs and helping to improve
However, unlike Sydney and Melbourne, an oversaturation of the retail sector,” Ibrahimi says.
offerings has yet to dwindle profitability for tenants. While the Westfield Carousel project has captured much of the
“The CBD provides a great platform to target an ongoing rotation state’s attention, a number of other inner-city developments are also
of visitors and white-collar workers, with footfalls throughout the presenting value-for-money opportunities.
year remaining strong and conversion rates following closely,”
Ibrahimi says. Yagan Square
The resulting spark in retail interest has seen a number of Located in the heart of Perth’s CBD within the reach of the heritage-
prominent landlords invest heavily in restructuring processes – with listed Horseshoe Bridge, Yagan Square is the flagship public space
the aim of making their locations more appealing to prospective of the Perth Council’s new City Link.
business tenants, particularly as new developments spring up The diverse, multi-use region celebrates Western Australia’s
across Perth. cultural heritage and landscape through a series of art spaces, retail
12 insideretail.com.auFEATURE
“As construction and development progress over coming years,
we will see retail, hospitality and hotel operations continue to boost
the state’s economy.”
Historically, Perth has But while Yagan Square remains the jewel in the Perth City Link
crown, it isn’t the only major development generating interest in
had limited retail options the city.
between the CBD and a Elizabeth Quay
Elizabeth Quay, the $2.6 billion landmark waterfront development
few established regional designed to reconnect Perth city with the Swan River, is yet another
shopping centres.
initiative turning heads.
The ambitious project was named best of the best by the Urban
Development Institute of Australia, thanks to its transformative
approach to retail innovation and growth.
“Elizabeth Quay has restored a valuable physical and cultural
offerings and digital implementations. Bearing a price tag of over connection between Perth’s city centre and the Swan River, a
$73 million, the much anticipated area opened to the public in March connection that had previously been cut by roads and decades of
last year, after more than 10 years of planning. development,” Metropolitan Redevelopment Authority CEO Sean
Encased within the 1.1 hectare site is the booming William Street Henriques says.
Mall, a lively pedestrian thoroughfare lined with shops and alfresco “People come out of the high-rise buildings to enjoy lunch by
dining, linking the Perth CBD with Northbridge. the water. They are returning to the city on the weekend, or staying
It was a significant development for the city, which had longer after work to attend shows and events with their families and
traditionally offered little pre- and post-match entertainment for they are forging new connections and ways of engaging with the city
its AFL-mad inhabitants. Yagan Square’s introduction provided an and its river.”
additional nightlife boost, attracting a number of micro-breweries Bolstering the new region is the development of global business
and millennial-themed offerings. Chevron’s Australian headquarters. The new 29-storey, mixed-use
“Local, interstate and international visitors have Perth Arena and Chevron tower has added more than 54,000 sqm of office space,
Yagan Square at their feet with the added bonus of direct train however the big boom for prospective tenants comes in the wealth
services to key destinations,” Planning Minister Rita Saffioti reveals. of expected foot traffic. ►
Yagan Square offers a series of art spaces, retail
offerings and digital implementations.
13FEATURE
“Chevron’s new headquarters will contribute to delivering a largest state by area is largely rural, and while population numbers in
vibrant, activated Elizabeth Quay, which is ultimately expected to be these towns pale in comparison to the Perth and Fremantle regions,
home to 1400 people and 10,000 workers,” Saffioti says. they shouldn’t be ignored.
The unique mix of commercial, dining, entertainment, retail and Significant government investment is slowly building infrastructure
community uses have seen the region grow in stature, not only in and appeal in the state’s more rural town centres, with areas such
Perth but across the state. as Geraldton, Bunbury and Albany emerging from the post-mining-
“Elizabeth Quay will continue to be an exciting place to live, work boom slumber, repositioned as thriving regional tourist spots.
and visit and will generate essential economic activity for many “With tourism investments picking up and more airline
years to come,” Henriques says. connections to Perth, including the recent introduction of direct
flights between Perth and Tokyo, we expect a surge of interest for
Sub-regional opportunities places like Margaret River, Bunbury and Albany to the south and
Since the collapse of the state’s mining industry, regional and sub- tourist hotspots in Geraldton, Exmouth and Broome to the north,”
regional areas in Western Australia have struggled to stay relevant, Ibrahimi explains.
with little to draw new entrants to the town centres. However, a “These regional centres already enjoy substantial interest from
strong state government approach to infrastructure and education is intrastate travellers and will continue to receive more visitors from
slowly helping to build back appeal. other parts of Australia and overseas tourists, leading to strong
“While we obviously had an inflated figure during the mining demand for retail operators.”
boom, which included interstate workers who settled in the regional Primarily driven by pad sites for Quick Service Restaurant options,
areas, today, the steady and organic population growth is evident medical and childcare centres, pharmacies and most recently
across the state, with key indicators recording a 0.93 per cent entertainment, interest is slowly rising.
growth between 2017 and 2018,” Ibrihimi reveals. But a new industry discovery looks certain to accelerate that
“And while the larger shopping destinations such as Westfield growth. As the dust settles on the state’s iron ore, gold and copper
Carousel, Morley Galleria and Garden City offer very competitive mining sectors, exploration in lithium hydroxide is revitalising the
retail opportunities, smaller neighbourhood centres continue to draw prospect of a secondary resource-driven boom.
the most interest from retail operators due to their relevance to the Several regional sites across Western Australia have been
residents in nearby communities.” bolstered to address the growing demand for the material, which will
fuel the next generation of car and smartphone batteries.
Regional opportunities Ibrahimi reveals that the state’s resource-driven economy is set to
From a geographical perspective, however, Western Australia offers thrive as result, turning Western Australia into a major global player
more than just CBD and sub-regional opportunities. The nation’s and immigration hotspot.
Across the Perth CBD, construction
and development are underway.
14 insideretail.com.auFEATURE
“The world’s largest lithium hydroxide processing plant outside be any truer than today. In addition to international challenges
of China opened in Kwinana, just south of Perth earlier this year,” he with global trade wars and regional instabilities, consumer habits
explains. continue to drift away from the conventional ‘customer’ that the
“The $400 million facility looks set to be joined by a $1 billion plant industry was all too comfortable with,” he says.
in Bunbury. In total, WA is expected to produce more than a third of “Throw in online shopping growth trends across the country
the world’s demand for lithium. Its significance to the local economy, and we find ourselves in unconventional territory that demands
job creation and state budgets cannot be stressed enough.” the best of our attention and effort. WA is not immune to any of
As new developments take shape across rural Western Australia, these challenges, and retailers are expected to do everything they
towns that have previously suffered in the fallout of the mining can to provide a level of ‘future-proofing’ as we move through this
collapse look set to be revamped, with entrepreneurs ready to uncharted route.”
capitalise. The retail leasing expert advocates strong due diligence on the
Ibrahimi suggests a driving demand for workers is a sure-fire sign part of the prospective franchisee, offering two pieces of advice:
of sector on the precipice of a great revival. know your customers and know your lease.
“Job creation industries will continue to drive interest in the south “It is vital to know as much as possible about your customer
of the state, especially in regions like Bunbury. We are confident base, their demographics, shopping habits and spending power.
regional towns will continue to be a powerhouse for the state’s This will allow you to best judge a location and its suitability for your
economy and will, in turn, continue to benefit the retail sector.” business,” he explains.
“After this stage, get to know your lease. This is not just a review
Future-proofing of the document but more importantly understanding its human
As population growth continues across Western Australia, new retail components. Know your landlord, the leasing agent, your future
precincts are certain to present value-for-money opportunities, property manager, your adjacent neighbours. If you are part of a
particularly for those operators willing to commit early. retail precinct or shopping centre, get to the nitty-gritty details of the
Despite the upside, however, Ibrahimi suggests the state is not marketing budget and plan. Today, it is more about interacting with
without its challenges. the customer in all aspects of their lives, and data and research is
“Retail has always been an evolving industry and that couldn’t key to this.” IRW
Xxx
Elizabeth Quay, the $2.6 billion landmark
waterfront development reconnecting
Perth city with the Swan River.
15FIGURES 28% $50 billion Australians that shop The amount the ASX fell on online once a week. Monday due to coronavirus fears. Source: Klarna Source: AAP $32 million $3.9 billion Mosaic Brands 1H 2020 EG Group’s rejected bid for EBITDA up by 36 per cent. Caltex Australia’s business. Source: Mosaic Source: Caltex 7 92,000 kWh Taco Bell stores to open in The amount to be generated at Kathmandu’s Australia this year. first solar-powered store in Victoria. Source: Restaurant Brands Source: Kathmandu Retales For those of us who love greenery in our homes but haven’t got the green thumbs to make it happen, Bunnings has a wonderful policy. It seems that if a plant you bought from a Bunnings Warehouse dies, you can bring it back to them (preferably in the same pot) and get a new healthy one or your money back. They call it the “perfect plant promise”. And all plants – though not seedlings – are covered by it for a 12-month period. The policy has actually been around for a while now, but it was flying under the radar until a grateful customer posted about it on Facebook. All you need is your receipt, although like most refunds, the plant needs to be examined by a Bunnings employee and refunds will be at his or her discretion. It seems simple, but as news.com.au reports, the shame factor keeps many brown-thumbed customers quietly burying their mistakes. 16 insideretail.com.au
PROPERTY
Retailers must invest
in the future, says CBRE
Changing consumer habits are impacting all bricks-and-mortar The company anticipates the transformation of some redundant
retailers, and those that fail to innovate and respond to these retail space into other uses, such as childcare centres, education
changing patterns will be left behind, CBRE reports in its 2020 real and entertainment centres, medical centres and residential
estate market outlook. developments.
CBRE estimates that online sales will reach 11 per cent of total CBRE forecasts that retail yields will remain relatively flat, with
sales in 2020 in Australia, compared with 3.3 per cent of total sales super-prime CBD location and regional shopping centre returns
in 2011. Technological advances are expected to transform the hovering at or below 5 per cent for the next two years. Prime large-
entire retail sector, but these will require significant investment. format returns are expected to remain at around 6.7 per cent until at
Mid-range clothing retailers have been hurt the most by least 2022.
e-commerce – CBRE says that 41 per cent of all insolvencies in Large format retailers are tipped to show growth in rentals due
the past five years have been in this sector. The food and beverage to recovery in the residential sector, CBRE says, although it places
trade, however, continues to expand. pressure on mid-range clothing retailers and department stores will
A number of global retailers are entering or expanding in Australia put downward pressure on rents.
in 2020. Retailers as varied as Alexander McQueen, Tory Burch and Los Angeles-based CBRE is the largest commercial real estate
Yves Saint Laurent – even Taco Bell – are expected to transform the services company in the world.
local shopping experience.
Woolworths plans Brisbane DC
Woolworths has taken another step in its ongoing technological facility will be key to supporting future growth in Queensland.
revamp, as it gets ready to open a $184 million state-of the-art “We’re pleased to be investing in our Queensland supply chain
distribution centre in the Brisbane suburb of Heathwood. network for the benefit of our customers,” Graham said.
Subject to approval from Brisbane City Council, the 42,000sqm “This development will help us deliver fresher food to customers,
temperature-controlled facility will house frozen and long-life chilled take trucks off Brisbane’s roads, and create new career opportunities
products for distribution to around 260 stores. for hundreds of Queenslanders.”
At full capacity, more than two million cartons will move through the Woolworths’ meat supplier Hilton Meats will also have a production
centre each week from more than 400 suppliers. facility on the site, which will help reduce truck movements.
Woolworths’ chief supply chain officer, Paul Graham, said the Woolworths will sign an initial 15-year lease on the site. IRW
The Heathwood DC will house frozen
and long-life chilled products for
distribution to around 260 stores.
17PEOPLE
Appointments Contact us
EDITOR
Jo-Anne Hui-Miller
jo-anne.h@octomedia.com.au
T2 boss to lead Unilever Australasia
Unilever has appointed T2 CEO Nicole Sparshott (pictured) ONLINE EDITOR
to head up the consumer goods giant’s Australia and New Heather McIlvaine
Zealand business following Clive Stiff’s retirement. heather.m@octomedia.com.au
Sparshott, who has 24 years’ experience leading within
global corporations, will take up the role in April, reporting to JOURNALIST
Unilever’s global COO Nitin Paranjpe; she will also keep her Dean Blake
CEO position with T2. dean.blake@octomedia.com.au
Sparshott joined Unilever ANZ in 2006 as marketing
director for foods, ice cream and beverages, before moving CONTRIBUTORS
to Singapore to take up leadership positions in the Asia Joyce Abaño, Jared Dickson,
business. She was appointed CEO of T2 when Unilever Norrelle Goldring
acquired the tea business in 2016 and has previously had
roles at Procter and Gamble and Coca-Cola. SUB-EDITOR
Margaret MacNabb
She holds a Masters in International Business from
University of Technology Sydney, and is a board director of GRAPHIC DESIGN
the World Wildlife Fund. Pablo Colombi
Stiff is retiring from the business after eight years in the
role and 34 years in FMCG; he will stay with the business ADVERTISING
until March 31 to help with the transition. Jeff Purser
ads@octomedia.com.au
0408 401 076
Current team steps up for Caltex
Caltex Australia has been unable to appoint a replacement Suite 3, Ground Floor.
for retiring CEO Julian Segal so its CFO, Matthew Halliday 131 Clarence Street
(pictured), will fill the position on an interim basis. Sydney NSW 2000
“Given our recent announcements regarding the receipt
of revised and new proposals to acquire Caltex, it is not PO Box R217
possible for us to complete this search at this time,” Royal Exchange NSW 1225
chairman Steven Greg said.
Telephone: (02) 9901 1800
Segal announced his retirement plans in August and was
to have left the role on March 2.
SUBSCRIPTIONS
Louise Warner, the executive general manager of fuels and
subs@octomedia.com.au
infrastructure, has been appointed as interim COO, while
current deputy CFO, Jeff Etherington, has been appointed
ISSN 1448-1642
interim CFO. A.B.N. 98 090 664 305
“The interim appointments we announce today will
ensure we can continue to engage with interested parties
on a potential transaction, while continuing to execute our FOLLOW US @INSIDERETAIL
strategy,” Greg added.
Lawson exits Forever New
Cameron Lawson (pictured), the head of digital marketing, Copyright notice:
retail marketing and loyalty for Forever New, has announced
Readers are reminded that the content of this
his departure from the company on LinkedIn, saying that he publication is subject to copyright, vested in
is “moving on to the world of dogs and cats”. Octomedia Pty Ltd. Readers and subscribers are
Forever New, a fashion clothing and accessories brand expressly forbidden from copying and re-posting
the contents of this publication or republishing all
founded in Melbourne, is one of the fastest growing or any part of it without the express permission
Australian brands. It emerged in late 2006 as a startup of the publisher or group editor. Octomedia Pty Ltd
reserves all of its rights against any pirating or
retailer and now trades over 250 stores across seven unauthorised use of such materials and publication
countries. without its prior written permission.
It took home the Best Omnichannel Retailer of the
year as well as Best Online Store at last week’s Retailer
Awards. IRW
18 insideretail.com.auOPENING MAY 2020
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