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‘Virtual Revolution’: Oz Retail Under Siege By Global Players

‘Virtual Revolution’: Oz Retail Under Siege By Global Players

The top 250 retailers globally have been revealed in Deloitte’s “Global Powers of Retail 2013”, and Australia features twice in the top 20, with Woolworths and Wesfarmers, the owners of Coles supermarkets, Officeworks and Bunnings.

Revenues in 2011 for the two Aussie giants were $54.6 bn and $52.2bn respectively, although Wesfarmer was shown to be the bigger in terms of growth, enjoying an almost 60% jump in retail revenue since 2006.

However, there were no signs of other Aussie retailers in the top 250, of which US owned Wal-Mart topped the list, with France’s Carrefour, UK’s Tesco and Costco all making it into the top 10.

US electronics retail giant Best Buy made it to No. 20, Amazon (No. 23), China’s Gome Home Appliance Group (No. 65),  Apple (No. 72), UK retailer Dixons (No,. 81) and Dell (No. 85) were all in the top 100 ranking.

The report also alluded to the “customer revolution” now underway in the retail sector globally, with mobile consumers now demanding seamless shopping experience whether it is instore, mobile or online stores.

“Traditional retailers must find opportunities to seamlessly embed the virtual world into their retail strategies by developing instore and online technologies” the Deloitte report warns.

Deloitte’s local retail industry leader, David White, also warned of the threat Aussie retailers are now under following the arrival of major high street giants like Topshop and Zara, saying 2013 will continue to be a “challenging” trading environment for retailers locally.

“Established overseas players already in Australia are planning to expand and there are a number of new entrants planning to launch in the coming year. I have no doubt that competition is going to be fierce, which will drive innovation and increase consumer choice,” says White.

“Undoubtedly, the recent arrival of sophisticated global retailers like Zara and Topshop into Australia… is increasing competition, however, we shouldn’t forget that Australian retailers still have a number of advantages including a greater knowledge of the local market, customers and seasons; an established customer base; and prime store locations.”

But even more global brands are heading our way, with US “retail heavyweights” Williams Sonoma (Pottery Barn) and Abercrombie & Fitch (Hollister), he warned, adding: “across all segments, local retailers need a response to this increased competition, developed around a well thought out customer focused strategy.”

The Australian Retail Association said the global retailers highlighted a paradigm shift in Aussie retail in a global context amid today’s challenging economic conditions, along with overseas entrants to the Australian retail market place introducing “slick international distribution networks and methods “

“The report shows Australian retail is experiencing a paradigm shift and the future consumer is here,” said ARA Executive Director Russell Zimmerman .

“Conducting business seamlessly across both physical and virtual channels has exposed Australian retail not just to competition from overseas but also to overseas entrants marketing their offers directly via new, Australian- based brand outlets.”