The impact of international retailers on the Australian retail landscape has well and truly made its mark. The fall of so many (Marcs, David Lawrence, Herringbone, Rhodes & Beckett, Payless Shoes, Pumpkin Patch, Howards Storage, Allphones and Masters) and some near misses (Australian Geographic, & Laura Ashley) has shown the weakness in the Australian retail landscape.
So what’s happening to our fashion industry, to which the majority of the fallen belong? We’ve been watching closely and talking to those involved, here are three issues affecting Australian fashion retailers.
Lack of confidence.
Apologies to the creative directors out there doing their best. But really it’s not hard to look around the middle of Australian fashion retail and be underwhelmed. There’s a lack of differentiation, with everyone trying to appeal to everyone, or trying to look like everyone else.
The numbers seem to be driving the creative direction of our brands to the point of everyone morphing into the same beast with very little differentiation. The drive to return margin seems a stronger force than creating or sticking to brand identify. There’s a lack of confidence in the creative director, with retailers underinvesting in design teams, or overriding the creative for the safety in numbers approach. But consumers aren’t inspired by the same offer repeated in the very sightly different fixtures of each store in the mall. And when this happens the only comparison becomes price, which is a slippery slope we’re all too familiar with.
Retailers haven’t moved with the consumer, a look at the womenswear brands that have folded all sit mainly in the work wear sector. But when was the last time you wore a suit to work? Casualization has had a huge impact on our wardrobes, but the retailers haven’t evolved in time because taking leaps takes confidence, while following the numbers does not.
Lack of investment in talent.
Speaking to insiders at Webster holdings, there’s a very large proportion of the creative/design/marketing team that have been imported. While sponsoring and recruiting from overseas makes sense to bring in talent with experience in the mega markets of the UK and US. When half of your team is not familiar with the local market how confident can you be in connecting with your consumer?
The Australian fashion industry has long benefited form importing top quality candidates from overseas, and I’ve personally gained a wealth of knowledge from mentors and colleagues from distant shores. But the question needs to be asked:
why we can’t grow and nurture the talent that’s here?
It takes time and money to train people up, and with short sighted goals of GP dollars driving most retail decisions and the aforementioned lack of confidence in our creative direction, the easy answer becomes, lets bring someone in that must know more than we do. But do they? There were almost 5000 retail industry primary 457 visas as at the end of June 2016, the average salary for the group in total sitting at 86K. Not surprisingly the majority of these roles are in NSW with 2,140 positions, and VIC coming in at 1,230. The numbers are big.
Cotton On have learned that importing talent can get you only so far. They’ve set up a graduate program to train and develop merchandise planners who after a 15month development period have the desired skills and can be hand picked to become permanent team members. A pretty impressive investment which shows confidence and a clear investment in the future.
Lack of sustainability.
The minimalists are here. Not the Jil Sander kind, but the “consume less, save the world and find inner peace” kind. And hurrah for that, if you haven’t already read this you should. But what does this mean for our retailers?
In a recent post by the ABC Australians generate 6000 kgs of fashion waste every 10 minutes. We’re all feeling the need to consume less, the mantra seems to be everywhere and the big guys are all doing their part in adopting some kind of sustainable stance whether authentic or just for window dressing.
H&M’s strategy has now moved away from expanding its footprint to working on its online offer and existing stores as well as a reported 2 new brands in the making. Interesting analysis here by Katie Smith, shows H&M’s fast fashion to be slowing while the more minimalist basics of COS are selling through more newness. So people are investing in their wardrobes for seemingly more forever pieces than before. H&M are planning for a change in the fast fashion market then what does that mean for Australian retailers?
It’s a visibly tough retail market with strong international and online competition. Similarly there has been no real visible turn around or gain in positive sentiment from our local retailers since the Rana Plaza collapse in Bangladesh in 2013. Sure some retailers have disclosed their supply chain, but not all, and without true sustainability programs the consumer hasn’t felt the need to buy back into our local fashion market over the internationals.
While the three issues outlined don’t explain the whole or detailed truth behind each business and its demise, they are all clear and present dangers currently facing the retail market in Australia.
All three factors point to one single truth for the future of Australian fashion retail.
Innovate, differentiate or die.