Does Myer have all the spokes in its retail wheel?

By Peter Sheppard
Head of Implementation, Retail Doctor Group

The wheel has long been a symbol of efficiency and a measure of how well things are going – for as long as it has been around. Statements like ‘a well-oiled machine’ are commonly used to describe a good business that is running well. But no matter how much oil is poured onto the wheel, if the spokes are not aligned or are missing, no amount of oil will get the most efficient result.

Department stores around the world are struggling to find the right formula for sales growth, without too much discounting being employed. In Australia, Myer recently flagged that it will be reducing the ‘price off’ tool that is such an easy short-term sales fix, and that comes with ongoing brand and margin implications.

It is very difficult for retailers to stay out of the discounting game, especially when sales are not up to expectation, stock levels are building and when competitors are on the price bandwagon. Despite management’s best intentions, there are little perceived short-term alternatives.

In the longer term and as part of an overall successful strategy, the wheels need to turn smoothly with all the spokes being well balanced. Only then can the discounting abate and make way for more rewarding retail.

What are some of the spokes required to get the retail wheel running well at Myer?

In my opinion, (and based on recent personal observation) three of the spokes that are evidently missing or need improvement are: product detail, customer connection and merchandising principals.

Offering the right product

So often, even large retailers do not get the product mix right. Nor do they get right the breadth versus depth equation. It is worth noting that Big W recently attributed its same store sales growth, the first positive growth it has seen in nine years, to adjusting its product mix. So, what should be done to assist in getting this right? Not only should retailers analyse what their customers are saying through their purchases, but also what they were looking for and did not find. If the product is not managed down to the size and colour level, retailers are not meeting their customers’ expectations.

Last week, in three different Myer stores, I could not buy a pair of chosen business shoes in a size 10. In each case, I selected two different styles and so in six separate cases, they did not have a popular men’s shoe size. How many footwear and other sales are lost due to being out of stock in core sizes?

Having the right personnel

Having the right personnel is just as important. If one reads Myer’s Facebook posts, it is obvious that there are far more dissatisfied customers than satisfied ones. Looking at the online reviews of similarly large retailers, the content is far more favourable. In fact, some large retailers, such as Super Retail Group and Kmart have made raving fans out of their customers. The new Myer CEO, John King, said the company is going to put the customer first, and that is great to hear. What would also be meaningful is staffing the stores at a level where one can actually get served by people who know the art of selling and also have detailed product knowledge.

Knowing the merchandising principles

The merchandising principles at Myer appear to be brand first. As a customer looking for an item, such as a men’s shirt, it is very frustrating to have to visit any number of in-store brand concessions to find that elusive shirt, especially when there is no one to assist. Reverting to a men’s shirt department would make finding what you are looking for much easier. It would be interesting to find out how many customers actually know what brand they are looking for in their purchasing process. My guess is that the average Australian shops in this order: type, size, fit, colour and lastly, if at all, brand. If Myer’s target market is the average Australian, as it has announced, it would seem to me that brand is less important than category.

These are just three spokes in the Myer wheel that I believe are out of balance. It is no surprise that they are based on product and people.

The new team has about 800 days until the banks and shareholders will judge their turnaround strategy. Can these three spokes, and maybe a couple of others, be fixed in that time frame?


First published on October 9 2018 on InsideRetail

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