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15
Jan-18
Monday

Luxury brands boom in Australia fuelled by Chinese shoppers

4
The South China Morning Post commented extensively about the luxury brands boom in Australia fuelled by Chinese shoppers, who account for about two thirds of all customers.  The brands, such as Louis Vuitton, Tiffany and Prada, are expanding their presence i.e. the half a billion dollar redevelopment of Chadstone in 2017 doubled its number of luxury brands to 38.  According to figures from IbisWorld, Australia’s luxury retail industry has grown at a rate of over 10 per cent per year from 2013.

Australian politicians encouraged to lower tax rates for large corporations

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Wesfarmers, the owners of Coles and Bunnings, encouraged Australian politicians to lower tax rates for large corporations, not just smaller enterprises.  Wesfarmers' CEO, Rob Scott, cited Walmart increasing minimum pay from $9 to $11 per hour (in response to the recent US tax cuts) as an example of how lower corporate taxes can benefit workers and boost international competitiveness.
12
Jan-18
Friday

Retailers should leave politics to the media

7
The NRF commented about recent research, which indicates that two-thirds of consumers want retail brands to influence debate around political and social issues.  In our view, this is a rare example of when listening to your customers and fulfilling their wishes could destroy your business.  If a retailer decides to take a political stance within a divided community such as the US or Australia, they will end up losing some customers.  Better to stick to merchandising and logistics, leaving politics to the media.

Print advertising remains strong in the US

5
The National Retail Federation in the US reported that print advertising (catalogues) remains strong, growing substantially over the last few years - still in favour with supermarkets and retail chains.  Over US$70 billion was spent last year in the US on catalogues and direct mail.

Nordstrom continues to perform well

7
According to the Wall Street Journal, Nordstrom continues to perform well, defying the pattern displayed by other department stores.  Speculations resurfaced about possible privatisation of the company, after a 20% rise in the retailer’s share price.  Nordstrom is an excellent example of a brick and mortar retailer who mastered the ‘digital path to purchase’ model.  Their online sales are growing, but so are their over the counter sales.

Are digitally native brands the future?

5
The US magazine, Fast Company recently published an interview with Walmart’s e-commerce CEO (Marc Lore), who expressed a view that ‘digitally native brands are the future’ because brands, by their nature, rely fully on a direct connection to customers.  We think that Mr Lore’s view is quite dangerous, as it seems to assume that Walmart’s existing business is obsolete.  The role of the e-commerce team in a modern retail enterprise must be to expand the existing brands into the digital space, so they remain relevant.  E-commerce must be about the ‘digital path to purchase’ (any purchase) rather than mere selling online.

2017 Christmas trade up 1.2%

5
More and more data keeps emerging confirming that 2017 Christmas trade was solid.  The AFR reported today that November sales were up 1.2%, driven by discounting and iPhone X sales.  Amazing what happens when retailers offer a product everyone wants…  Note that department stores did not disappoint – performing as expected – 1.1% down on the previous year.
11
Jan-18
Thursday

NAB: 7.7% of retail sales in Australia go through an online channel

7
NAB released statistics implying that 7.7% of retail sales in Australia go through the online channel, adding up to about $24 billion pa.  Homewares and appliances categories continue to grow rapidly (25% growth).  Other categories are more in line with brick and mortar sales growth, but still ahead (around 4%).

ASIC embarks on “a crackdown on company culture”

8
The AFR reported that ASIC is embarking on “a crackdown on company culture”.  AFR quotes a ‘governance firm’ Regnan, which worked with Griffith University to discover that companies with ‘high’ culture doubled in value over the last five years, while those with ‘low’ culture lost 50% of their value.  Just a reminder for those involved: W. Edwards Deming said 30 years ago that the most important things in business are unknown or unknowable.  And, in our experience, great performance doesn’t stem from ‘culture’ (i.e. sum total of behaviour) but from the thinking horizon.  Companies which operate with the long term in mind tend to do well, and the long term focus drives the right behaviour, aka culture.
10
Jan-18
Wednesday

Hard works pays off for Noni B

6
The AFR commented on Noni B’s results, which were 3% up on the previous year on a like-for-like basis.  The results reflect the hard work of the Noni B team and are 1% better than the underlying inflation rate.  So, overall the results are not overly material, but in comparison to many other retailers, Noni B owners and management have a good reason to be pleased.

NRF: retail uptick in the holiday season

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The National Retail Federation in the US reported that a number of retailers saw an uptick during the holiday season, including Kohl's, Macy's, J.C. Penney and Lululemon, which all reported sales increases for November and December. The retailers benefited from an improving economy and a surge in consumer confidence.