We’ve chronicled the ongoing (and at-times awkward) struggle by Australia’s traditional department stores against pureplay Ecommerce companies and foreign multichannel competitors.
This week upscale department store David Jones touted the launch of its website in November as a key growth opportunity in the medium to long term.
“We are working to become a multi-channel retailer with an integrated digital market plan.” said chief Paul Zahra in the company’s first-half trading update. “We will do this in a stepped and measured approach, ensuring we manage the risk and return of our investment in this area,” he said.
David Jones launched an online site in 2003 but abandoned the project because of the high cost and poor returns at the time reports the SMH.
Now the Jones find themselves under pressure from global online contenders as Australian shoppers embrace the value and selection they are finding online.
Australians’ growing appetite for Ecommerce is attracting new entrants to the local market such as UK retailer John Lewis, who is expanding its online channel to Australia this year and offering home delivery services.
Don’t Jones the International Opportunity
Is it possible that U.S. retailers are making the same mistake that David Jones is now trying to correct, only on a global scale? It is a bit early to say U.S. retailers are being late to the international game. But no one wants to be playing catch-up once the writing is on the wall.
We’re seeing more and more brands eyeing cross-border opportunities in markets where shoppers are voting for Ecommerce with their pocket books. This includes the U.S. where established domestic online brands can expect to see new online competition and new commerce models coming ashore.
This new domestic competition and the ensuing tendency to “protect their own turf” may distract U.S. retail brands from focusing on online expansion opportunities in other markets. This is a mistake, although an understandable one.
U.S. online brands see an opportunity at home, one with plenty of growth left to come. Perhaps not the hyper-growth of years past, but solid growth in a market they know well. So when they look to balance investment resources between domestic and international growth, they often favor the domestic side.
Short-term, a focus on the domestic opportunity can be hard to argue against. Longer-term, foregoing the international opportunity may be the difference in being a future global retail leader and an also-ran.
Australia is a great example of a market that has awoken (almost overnight some would argue) to the value and attractiveness of shopping online. As a result, sellers of all sizes and shapes are not just eyeing the opportunity down under, they are moving on it.
Generally-speaking, U.S. online retail brands lead the rest of the world. The window of opportunity for U.S. brands to grab international market share is still wide open.
At least it is now. But the rest of the world is catching up.
Balancing investments in domestic and international Ecommerce won’t be easy. For some, it means moving resources from stores to online/direct and then funding cross-border initiatives from within online. For others, it will require innovative thinking and creative ways to serve both international and domestic customers from the same pool of resources.
Yes, it is still smart to make sure e-verything is humming along on the home front. But foregoing the cross-border Ecommerce opportunity by simply dabbling, waiting and watching may one day be the difference between being a top tier global brand and being a fallen star.