Myer is one of the most recognized organizations present in Australia that is known for retailing huge range of products, including clothes and apparels, footwear as well as accessories, furniture, toys, and many more (“MYER”, 2016). Established in the year of 1900, the organization has come a long way in evolving itself to become one of Australia’s most popular department stores. Myer, headquartered at Melbourne, has gradually expanded itself, and has diversified its business as well, that in turn has fetched it huge organizational success. However, just like any other organization, Myer is also encountering a tough competition from other rival giant organizations, and hence it adopts as well as continually re-evaluates the effective strategies undertaken to survive in a competitive market ("MYER", 2016). It is needless to say that Myer has already succeeded in establishing itself as a renowned organization, yet it must be able to sustain itself in future. Myer already has got new competition knocking at its doorstep, and with Woolworths or David Jones, it is left with no option other than employing a market plan that will help it enhance its profit, and enjoy competitive advantage over other firms. As part of its marketing strategy, Myer has to create products that best suits their consumer demands, and at the same time has to promote its products, so as to enhance and further develop the brand reputation of the organization. The following report aims to discuss and critically analyze the marketing strategy as well as marketing issues adopted and encountered by Myer.Discussion:
Myer is a departmental store, and as such it offers a huge range of products and services to its consumers. However, as an organization it must be very careful of what is it producing, and how far the products offered, are being able to satiate the demand of the consumers.
Consumer Demand and Market Orientation of Myer:
Consumer satisfaction is one of the major determinants of the success of an organization, as only if an organization is capable of fulfilling the demands of the consumers, an organization will be able to flourish itself in future. With the growing trends, and the emergence of a variety of new departmental stores, an organization will necessarily need to identify its target market, understand the pattern of the consumer behavior, and improve its service accordingly. The major problem with Myer has been that in the recent years, the organization has miserably failed to critically respond to the consumer expectations (Kumar et al., 2013). The current CEO of Myer, Richard Umbers, was found to admit that the organization has failed to bring about a transformational change in the marketing experience. While most of the international brands, such as Macy’s and John Lewis, are smoothly conducting their business via virtual platforms, Myer has been a failure in embracing online shopping method in the accurate way. The organization, according to Umbers, has been slow and reluctant in adopting innovative changes in the virtual marketing strategy, because it believed that online sale accounts for only 10% of the total retail sale of an organization. However, this is a mere delusion, as it is worth-mentioning here, that John Lewis has already been selling 25% of its goods with the help of internet only. While most of the international counterparts of Myer have been successful in tempting the consumers to try out their exclusive stock via online platforms, the cyberspace of Myer has been warning the consumers that its online platform offers only a limited range of products. It is noteworthy that Macy’s has claimed that 89% of the growth in its sales has come from nowhere but its online sites only (Goodman & Remaud, 2015). The “clicking and collecting” strategy is not only very much in vogue, but is also highly useful and convenient a method, consumers are opting for. Although, Myers also offers goods via online stores, it is far from being convenient, as the Australian store usually offers ordered goods only after four to seven working days, and most shockingly, in case of the Western part of Australia, the goods cannot be delivered before 10 days. The delay in shipping can push a huge number of consumers away from the organization. Multinational organizations such as John Lewis are offering freight service to ensure comfortable, convenient shopping experience, and hence Myer also needs to make its online sites more effective.
Pricing Strategy of Myers
The importance of pricing strategy can never be overemphasized in business. It is pointless to state that if an organization like Myers is speeding towards enhancing its revenue, and regaining its position, it must be able to adopt an effective pricing strategy. The management authority of Myers has rightly realized that if it continues with higher price strategy, it may end up suffering from low sale rate. Hence, the organization has rightly adopted the competitive pricing policy (Kumar et al., 2013). As a result of this strategy, if an Australian rival organization is offering any product at a cheaper cost than its counterpart in Myers, and if the store member of Myers, is able to verify the fact, then Myer will Price Match it. The strategy has enabled the organization offer goods at a highly competitive price that in turn can help in enjoying competitive advantage over other organizations. Again, apart from selling its products at reasonable prices, this strategy is also helping Myers to gain recognition among the masses, as an organization that does not overcharge from the public (Abhayawansa & Guthrie, 2014).
Competitive Forces Challenging the Position of Myers
It has to be remembered that Myer operates in a highly competitive retail market in Australia, and if the organization fails to adopt the effective strategies, it can get negatively impacted by some of the most powerful domestic as well as international entrants of the market (Hingley et al., 2015). Myer has gained considerable popularity in market, especially because of its wide range of clothing and apparel collection, and hence the organization should be more focused to boost the sale of its clothes and dress products. The organization has recently adopted a strategy whereby Myer is able to offer highly fashionable, well-designed clothes at highly affordable rates. These clothes fall under a mid-market banner, and as a result, although the clothes are highly fashionable, these are surely affordable to a majority of the consumers. However, it is to be noted that despite the desperate efforts of Myer to regain its position, the organization is suffering from flat sales, ultimately leading the organization lose its market value before the shareholders (Goodman & Remaud, 2015).
Figure 1: Myer’s Share Price Going Down
Source: ("MYER", 2016)
As it can be understood from the above graph, the value of the organization has been continually going down, as Myers, at present, is finding it tough to survive in the retail market of Australia. One of the major reasons why the organization is suffering from challenges in the retail market of Australia is that it is failing to establish its own identity, by selling its own brand. The very reason why organizations, such as Hennes &Mauritz or Aldi are swiftly flourishing is because these organizations are selling home brands (Andrews, 2014). Myer is required to build its own brand, and it needs to sell its own products. Myer is assuming the role of a landlord whereby it is renting out space to other brands, and in the process it is more likely to end up as a shopping mall inside a shopping mall. It should start manufacturing its own products only, and it should sell the same in its departmental stores, as it will help it in building a stronger brand image and reputation.
Major Competitive Issues Faced by Myer
However, the organization at present is all set to boost its sales, as the CEO Umbers claimed that the organization is all set to boost its sale growth greater than 3% between the period of 2016 to 2020 ("MYER", 2016). Hence, for this reason, the organization has adopted an effective strategy that can help them offer better consumer satisfaction. Keeping this in consideration, the organization has not only invested a lump sum amount for Omni channel, but it has also started investing for providing the consumers with free Wi Fi and digital hubs in many of its stores. The organization needs to improve the consumer experience, and for that, it is not sufficient for Myer to open up a virtual selling platform (Armstrong et al., 2013). The organization needs to offer a highly integrated, multi-channel service to the consumers, so that the consumers can easily enjoy the re-development of the digital as well as online offers via its e-commerce site. The organization, keeping in mind the recent drop in sales, also needs to create consumer loyalty programs that will help the company retain its old consumers, while drawing the attention of the new ones. Providing free delivery to the consumers, on online purchase of products can be a discreet way of increasing consumer loyalty (Westcott & Pendleton, 2013).
Segmenting and Targeting Issues Faced by Myer
Besides, in order to survive in the highly competitive market of today’s world, an organization has to improve the quality of its service. However, Myer is one important example of a traditional Australian retailer that has failed to adopt innovation. As a result, it is terribly failing to provide high quality service or product information to the consumers (Cumming & Johan, 2016). A major problem here is that Myer has failed to divide the consumer market according to demographic, psychographic or product use (Cross et al., 2015). The organization comes up as just another departmental store, which does not target or segment the market according to the demographic or lifestyle lines. For example, Zara has a definite targeted consumer market, and it produces most of its products targeting the 20 to 35 year old people. In absence of any such specific target market, Myer is losing out as it is not capable of enticing a particular section of consumers (Azizul Islam & Jain, 2013). It has to be remembered that targeting and positioning plays an extremely an important role. In case Myers fails to know what their consumers want, and when, the organization soon will be replaced by the emerging international retailers.
Importance of Market Research to Prosper in Future:
The major problem that Myers is facing is that it is gradually losing its relevance in the present market, and hence it is required to update itself according to the choice and expectations of the consumers (Vernon, 2012). The management authority, for this reason, must undertake market research, in order to understand its target market. In this context, it is noteworthy that the organization has already undertaken a few market research programs, with the purpose of identifying its key consumers (Czinkota & Ronkainen, 2013). According to the Roy Morgan Data, the Australia retail market has mainly three kinds of consumers- high value consumers, who are very much brand conscious, fashion forward consumers who are known for leading the fashion pack, and those consumers who are willing to buy products at a highly affordable rate. Myers needs to produce its products, especially the garments, keeping in mind the needs of the three classes of consumers. The organization, at present is primarily focused on selling branded products, the price of which is relatively higher (Chimhundu et al., 2015). Instead of promoting and selling other brands, the organization should focus on manufacturing and selling its own brands. It has to be remembered that due to high unemployment rate in Australia the country is facing an economic downturn that in turn has led to weak consumer sentiment (Andrew, 2015). The Australian retail landscape has undoubtedly changed in the recent few years. At present, the number of impulsive consumers has disastrously gone down, as nowadays, the consumers take time, compare prices, and then choose. The economic downturn and high rate of unemployment have greatly influenced the purchasing decision of the consumers, and hence the retail business of Myers will face a miserable end, if it does not engage in multichannel marketing, and invent new business models (Cleaver et al., 2015).
As it is known, the target market of Myers has always been middle and upper middle class consumers of Australia, however if the organization is willing to flourish in future, it must learn how to expand and develop in other countries as well. Global presence is very important, as it will not only increase the scope of serving greater number of consumers, but will also help the organization in enhancing the brand recognition of the company as well (Tung & Carlson, 2015). There is a variety of foreign retail stores in Australia which are dominating the retail sector, and since Myers is encountering much competition from them, it will be a discreet decision for the organization to merge with them. This tie up will not only help the organization in retaining its position in the retail market, but it will also need to establish its identity in foreign locations as well (Sutton-Brady et al., 2015). There is a variety of restrictions and government regimes that act as a strong impediment for the swift growth of Myers. For example, one major impediment is faced by Myers, because of the regulations on trading hours it is practically impossible for the organization to serve the consumers as per their convenience (Adhikari et al., 2016). Hence, the organization is likely to lose its position to the online retailers, until and unless it ensures digital success in its retail activities. Myers will be required to adopt a more consumer-oriented approach, whereby it would be able to serve the consumers via online as well as mobile channels. Again, in order to serve the consumers in a satisfactory way, the organization needs to challenge the traditional concept of digital market, and must introduce the idea of “channel hopping”, whereby a consumer can buy online, but at the same time he can be offered the option of trying out the product in the offline store, before making the payment (Shafritz et al., 2015). Myers is definitely making a huge progress with the introduction of several attractive features to its online stores, such as gift voucher and wish list for the consumers. However, the organization should focus more on the problem of the underdeveloped distribution channel, as the organization serves only a few locations in Australia. Geographic expansion is much needed, if Myer wants to emerge as one of the most recognized departmental stores of Australia (Lessard et al., 2013).
Myers has a huge prospect to flourish in future, and yet the organization must be very aware of the threats that may impede its growth. First of all, the entrance of a few reputed retail stores in Australia, is posing a serious threat to the existence of the organization. Hence, the organization must geographically expand itself, and enter into partnership with the recognized foreign retail brands, if it is willing to retain its position in near future. Amidst the economic slowdown and high unemployment rate, the organization will need to diversify its products and services, instead of sticking to the common retail products. Online and offline stores should be well-integrated, and the organization must move from a channel choice to a channel co-ordination strategy. It is needless to mention that Myers is already enjoying a strong brand presence and reputation in the Australian retail market, and hence with the help of innovative business model, and consumer-focused service, the organization can regain its position in no time.
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