Treble sales, classifications ads, SKUs galore: the sky is the limit for Myer.com, says boss Bernie Brooks.
Click to enlarge
Bullish Brookes is predicting online sales to treble exponentially to 10-15% of total sales – up from 1% – in 3-5 years, he told Alan Kohler’s Inside Business programme on the ABC yesterday.
Myer’s boss is predicting explosive growth in its ‘omni’ or multi channel future, as he paints a changing picture of the future environment for the retail giant.
“Oh, I think what we’ll see is an omni channel environment. So what we’ll see is a combination of bricks and mortar and clicks. If it moves more to clicks, we’ll be there. If it stays more in bricks and mortar, we’re there as well,” Myer CEO said.
And not to be left behind the pack, Myer is “having a bet each way and we’re playing in both spaces and starting to play more competently than we have before.”
Brookes has big plans for Myer.com and even conceded the site, which has enjoyed 14 million unique visits, saying the retailer “might well” take on the guise of a media company and take online classification ads from traditional outlets like Fairfax, as web players Carsales and Seek have done.
Last week, Myer announced a disappointing 14% slump in net profit for FY12 to $139.3 million.
Sales growth was still in negative territory for the most part, with slight growth in Q4, however, the green shoot was online sales more than doubled over the financial year, with Myer telling shareholders the web was “a significant opportunity”.
“So, the scenario is that we’re into that game in a big way,” Brookes added.
However, he also admitted he was playing “a little bit of catch up” compared to some retailers who have had their fingers in the online pulse for several years now.
“I think most retailers in Australia were caught a little bit by the speed at which the internet took off” Brookes admitted, blaming the Aussie dollar, in part.
But Myer is fast making up for lost time, he told Alan Kohler, referring to the near two fold increase in the number of SKUs or unique products identifiers online, which will soon jump to 50,000 from current 30,000 products available online.
Myer recently revamped its online site, launched some weeks ago to the public, with key improvements including a new homepage, improved search functionality, one-page check out and enhanced conversion tactics.
“That’s seen a significant step up in everything from ratings, 50,000 SKUs over the next few months, we got 30,000-odd today, starting to get more fair dinkum into the game.”
“We’ve doubled the sales over the last 12 months and it’s growing at an exponential rate. We’ll be into this space in a big way and we’ll still maintain a competitive advantage over those pure players because you can buy it in store, pick it up in store, try it on in store. You’ve got the range that’s exclusive to us and we’ve got both a combination of bricks and mortar and clicks, which does give us a competitive advantage.”
However, web sales still account for less than 1 per cent of Myer’s total trading at the moment, just slightly less than retailer JB Hi-Fi, Harvey Norman, but Brookes says his e-store will catch up to his counterparts in the UK and US as more consumers hit the Internet.
But as online rises, bricks and mortar will decline indicating “maybe” even four “non-performing” stores will be shut down in the next five years, but eight or nine will open in new locations.