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Big brands flock to Google Shopping Actions

Retail Dive reported that Google added Best Buy, Sephora and Nike to the list of retailers that now sell directly through Google's Shopping Actions service, a unified shopping cart capability integrating Google Assistant, Google Express and the internet giant's search capabilities. Shopping Actions enables shoppers using Google search and Assistant capabilities to buy products on Google Express without having to go to the retailer or brand website after the initial product discovery. While this sounds great, it's worth noting that it goes against the Digital Path to Purchase funnel - the focus is on ordering and not true experience, which means that the sale becomes transactional rather than a part of nurturing lifetime engagement.

US food supply jolt

The Wall Street Journal reported that more than a dozen companies have recalled millions of pounds of potentially contaminated food in recent days in a new challenge for food producers facing heightened scrutiny of the US food supply. This is one in a series of similar events as food companies grapple with costly recalls and an increase in multistate outbreaks of foodborne illness this year, due to advances in pathogen detection and new regulations that require US farmers and food processors to do more to prevent foodborne illness.    

Woolies staff approve new enterprise agreement

The AFR reported that Woolworths supermarket staff have overwhelmingly approved the company's new enterprise agreement, which restores full penalty rates for the first time in decades. The new deal increases weekend and evening rates to the award minimum. Under the agreement, casual loading will rise from 20% to 25%. The four-year arrangement is expected to significantly increase labour costs for the retail giant as, unlike previous agreements, it does not trade away penalty rates for higher base rates.

Spending in AU stalls as businesses turn cautious

Business Insider reported that spending levels across the Australian economy grew at the slowest pace in over a year in September, driven by a sharp reduction in expenditure among business. The Commonwealth Bank’s Business Sales Indicator (BSI) — a measure that uses the value of credit and debit card transactions processed through Commonwealth Bank merchant facilities to track economy-wide spending — grew by just 0.2% in trend terms last month, the weakest increase seen since May 2017. But, it's not all bad news: in trend terms, the BSI found retail stores increased by 1% in September, the largest increase in six months.

RD POS fully integrated with Adyen

Retail Directions announced that its store-level systems - POS and mobile POS - are now fully integrated with Adyen, a leading global payments platform. Adyen provides payment technology to the likes of Uber, Netflix, eBay, Spotify, LinkedIn, etc. Retail Directions’ clients with an international footprint now have the option to deploy a single, globally-unified payments platform.

Roger David enters voluntary administration

Business Insider Australia reported that Roger David, Australia’s third largest Australian menswear retailer, has succumbed to the retail crunch and increasing competition online and has gone into voluntary administration. The 76-year-old company says it couldn’t compete with global retailers operating in Australia and with digital sites. Its 57 stores, with 300 staff, will continue to trade under administrators for the time being. Combined with tough market conditions, this situation is yet another example of how out of control utility prices have hit discretionary spending hard with serious consequences for specialty retailers.  

Afterpay faces a bumpy three months

The AFR reported that Afterpay is in for a volatile three months as buy now, pay later schemes - which consumer groups say exploits a loophole in lending laws - will be put under the microscope as part of a new Senate inquiry into parts of the finance sector. Payday lenders and debt management firms will also come under scrutiny. Afterpay, not unlike Uber and other technology businesses, has been savvy enough to stay one step ahead of legislators until now, but a correction was imminent from the start. Lending laws aside, let's not forget that buy now, pay later offerings have also been great for retailers, attracting consumers back into stores.  

New Look to exit China, close 120 stores

Reuters reported that British fashion group New Look will exit China and close its remaining 120 stores in the region by the end of the year. The decision to exit China is part of an ongoing review of New Look’s international strategy. The retailer has been battling In March, New Look staved off a potential administration when British creditors and landlords backed a restructuring plan enabling it to close 60 UK stores. New Look has an impressive story of previous success and their current woes confirm how difficult it is to run a successful fashion business, especially in the current climate.

The Reject Shop hit hard by low spending

The AFR reported that discount retailer The Reject Shop has blamed stagnant wage growth and rising household costs for an alarming drop in sales. The retailer's shares plunged as much as 40% yesterday to 12-month lows after it slashed its December-half net profit guidance from $17.7 million to between $10 million and $11 million. The Reject Shop's CEO blamed, "the extremely weak retail environment". This story confirms what we've noted in today's post about retail challenges in Australia - soaring utility prices have hit discretionary spending hard with serious consequences for specialty retailers.

Retail challenges in Australia

We just attended a briefing by the Chief Economist from NAB. His data confirmed our long-held view that online sales are sucking profits out from many retail verticals. Consequently, retailers who can engage digitally to bring customers to their brick and mortar outlets should give preference to this model, rather than try to increase online sales. The Digital Path to Purchase needs to become the new paradigm for specialty retailers, replacing the current siloed arrangements, which encourage online and store teams to compete, to the detriment of the enterprise as a whole.  NAB’s CE also pointed out that recent, massive increases in utility prices (energy, rates etc. going up by 20%) have dampened discretionary spending, seriously impacting specialty retailers.

Kaufland ramps up for Aussie rollout

The AFR reported that German discount retailer Kaufland is stepping up its plans for expansion into Australia with an additional $60 million capital to assist in the roll-out of its stores and new headquarters. The chain which operates more than 1,250 stores across Europe is expected to open its first two hypermarkets in Australia in fiscal 2019 with plans to open 32 stores in Australia by 2023. Kaufland has been described as the German version of Costco, without the membership costs, and analysts believe that due to the vast range of products it offers, the “big two” won’t be the only ones to feel the heat from this new competitor - Kmart and Big W will likely also be hit.