As some Australian retailers are finding the internet and online trading as a direct threat to their business, information analyst IbisWorld has highlighted that there are some sectors that have instead adapted and prospered.
IbisWorld Australia general manager Robert Bryant said reinvention and innovation is the key to maintain relevance in the marketplace.
“While many prophesied the death of cinema, human resources, travel agencies, postal services, and even department stores in the face of increased online competition — what we have actually seen is resourceful operators repositioning their offering in order to compete and flourish,” he said.
Department stores were tipped to suffer in the face of online retailing but IbisWorld research shows that their revenue is expected to increase by 1 per cent in 2010-11, reaching $20.66 billion. IbisWorld is also forecasting a 1.6 per cent average annual growth for the next five years.
“The past five years has been difficult for many retailers, with the struggles faced by Coles Group in relation to Myer in 2006 seen as a sign of the times; retail pegged to migrate more towards discounters, specialists and the internet; and the reverberating effects of the global financial crisis,” Bryant said.
“Big W – which accounts for over 20 per cent of industry revenue – commenced online retailing during 2010, and other industry participants are expected to follow. The buying power and reputation of the companies in this industry will enable them to resonate online, while the recent $300 million investment by Myer into its flagship Melbourne CBD store is a vote of confidence in the ongoing relevance of the luxury in-store experience.”
Forecast to disappear with the rise of VHS a quarter century ago, cinemas has continued to defy the odds, including threats from the internet.
“Despite digital piracy, Blu-ray Discs and the size of the average Australian’s TV screen, which is approaching that of an IMAX, revenue for Australia’s cinema industry has increased at an average 3.8 per cent per annum in the five years to 2010-11 (to reach $1.90 billion),” Bryant said.
And while technological innovations, such as 3D movies have played a role, Bryant suggested a greater story was at play.
“Cinemas are no longer viewed by consumers as solely a way to view a movie, but as a social destination. An emphasis on customer service, through methods such as gold class seating, online booking and merchandising has enabled cinemas to offer an experience that is difficult to achieve at home – thereby underpinning their relevance in the 21st century,” he said.
Additionally, while the internet has offered free and instant email and online billing and banking options, it is actually proving valuable for the industry.
“Although repositioning the industry has had its challenges – reflected by Australia Post’s rationalisation of its post offices and increase of stamp prices to 60 cents – IbisWorld expects industry revenue to increase by 2.0 per cent in 2010-11 to reach $11.99 billion and forecasts revenue to continue rising by an average annualised 2.1 per cent over the coming five-year period,” Bryant said.