RetailBiz for Friday 2 May 2014

Self-serve online sales and ‘Omni Mirrors’ feature at new Next Gen David Jones Indooroopilly

David Jones this week opened a new store in Indooroopilly, Queensland, that merges bricks and mortar with online selling to such an extent that the company has labeled it a “next generation” department store.

CEO Paul Zahra cut the ribbon to officially open the new DJs yesterday. It is the first store opening for David Jones since the proposed takeover by South African Woolworths was announced and it represents a new era in department stores tackling the challenges encountered by the digital economy. Both DJs and its arch rival Myer have previously been criticised for lacklustre attempts to harness online, multichannel and omnichannel strategies.

“The David Jones Indooroopilly store incorporates all of the features of the company’s “Next Generation” store concept, including new features such as complimentary customer Wi-Fi, digital charging stations, an interactive Omni Mirror, customer seating areas along with dedicated in-store areas to purchase merchandise online and to collect online purchases,” a spokesperson said.

David Jones said an Omni Mirror is a “life size mirror that allows customers to try on outfits and take photos (via the mirror) and email them to friends for their opinion, or Instagram the images”.

The introduction of self-serve online terminals so customers can complete their own transaction is a revelation for David Jones, which has previously required customers to queue at centrally located POS areas. While customer service levels at department stores have often been questioned, DJs today said the experience at the Indooroopilly store would be “excellent” and that 120 staff would be employed.

“We are delighted to be establishing a presence at Indooroopilly Shopping Centre,” Zahra said. “This new David Jones store will bring a unique and exciting shopping experience to the people of Indooroopilly, with customer service excellence, good value and quality brands across our most popular categories in a contemporary environment.”

A company statement said this store would stock 170 homewares brands, including small appliance names “at no other department store”.

Store closures and refurbishments lead to dip in quarterly sales at Myer

Sales at Myer declined almost 1 per cent in the department store’s third quarter (13 weeks to 26 April 2014) compared to the previous corresponding period, to $646.5 million, due to ongoing refurbishments at major stores interrupting trading, according to CEO Bernie Brookes.

Although total sales were down, comparable sales increased 0.24 per cent during the period, due to the closure of the Dandenong (VIC) and Elizabeth (SA) stores between these reporting periods.

“It was encouraging to achieve another quarter of comparable store sales growth, which has now been achieved in seven of the last eight quarters,” Brookes said.

Brookes further reported that since the closure of the Elizabeth store, there has been an increase in sales at the company’s nearby Tea Tree Plaza outlet, which has benefited economies of scale. There has also been a sales lift at the flagship Melbourne CBD store, which Brookes attributes to renewed interest in the area since the arrivals of a number of new retailers. Swedish retailer H&M and Japanese company Uniqlo have recently opened Melbourne stores.

Myer further reported that small appliances was among the best performing categories during the quarter, along with cosmetics, fashion, youth and toys. There was also strong growth in online sales during the quarter; Myer reported 9 million visits to its website across the 13 weeks, where it now sells 119,000 SKUs.

“We have experienced growth with all our key [small appliance] brands,” a spokesperson said. “Food preparation is still doing well, driven by the trend in personal and super blending and mixers.”

When asked why consumers might prefer shopping for appliances at Myer, instead of a dedicated appliance retailer, the spokesperson replied, “Our Myerone loyalty program remains a strong competitive advantage for us.  This combined with our wide network of stores across Australia means that our customers can shop with confidence.”

“The marginal decline in total sales reflected the continued significant sales impact of the refurbishment of 3 of our top 20 stores and the commencement of a refurbishment at the Macquarie (NSW) store in February.”

Harvey Norman delivers positive third quarter results with the help of strong foreign currencies

Harvey Norman has posted strong third quarter results, driven by an increase in global sales and helped by an appreciation in foreign currencies.

Sales from franchised Harvey Norman complexes, commercial divisions and other sales outlets in Australia, New Zealand, Slovenia, Croatia, the Republic of Ireland and Northern Ireland (UK), but excluding Singapore, totaled $4.33 billion for the nine months ended 31 March 2014, up 4 per cent when compared to the same period in 2013.

On a like-for-like basis global sales were up 5.2 per cent over the 9-month period from the previous year.

Stronger local currencies helped increase the value of global sales, with the euro appreciating 19.2 per cent, 15.5 per cent appreciation on the pound sterling and the New Zealand dollar appreciating 13.4 per cent from the same period last year.

Over the 9-month period, Ireland was the top performing country, with global sales increasing 23.2 per cent on the previous year, when measured in Australian dollars.

By comparison, Australian global sales increased just 1.5 per cent. So far this financial year, five Harvey Norman franchised complexes and one Joyce Mayne store in Australia have closed. In the same period Australian sales increased 3.4 per cent on a like-for-like basis.

Northern Ireland was the only region where sales are decreasing, down 6.3 per cent in comparison to the same nine months the year before. Two company stores in Northern Ireland have stopped selling electrical and computer goods and have been converted to only sell furniture and bedding.

On a like-for-like basis, Northern Ireland’s results paint a more positive picture, with sales up 38.9 per cent over the nine months when measured in Australian dollars.

Across the pond, two new company operated stores were opened in New Zealand where global sales were up 12.3 per cent for the nine month period when measured in Australian dollars.