Newcastle Now


22 September 2017

Opinion: Aces in specialty retail's pack

You’ve got to know when to hold ‘em/Know when to fold ‘em/Know when to walk away/Know when to run.” - Some wisdom from Kenny Rogers’ The Gambler.

Australians are great gamblers. So, when it comes to retail futures, maybe we should crunch the numbers and decide not to panic just yet.

(On the other hand, did you see those half-naked Florida idiots on CNN – roaming around a rooftop carpark, stripped to the waist in howling wind and rain, chest-thumping and doing the alpha-male thing? Let’s hope they got their gamble right and aren’t still swimming the Caribbean)

There is an air of slight panic around the news that Amazon will start trading in Australia. Working from what what one national newspaper termed a ‘maiden fulfillment centre’, for crying out loud. What’s wrong with a warehouse? Apparently, we’re all excited: 75 per cent of us are interested with 56 per cent likely to buy from them. (

They are big. They own more than 250 trademarks and have delivered a major whack to some iconic US retailers. They are expected to hit the profit of big Australian retailers by as much as 20 per cent, particularly in electronics, electronic media, toys and books with fashion bringing up the rear. Morgan Stanley (, estimates that department stores look more exposed than specialty retailers because they have long leases and weak on-line offers and generate a large percentage of sales from clothing where Amazon is successful. They also suggest the impact could be as much as 15 per cent or $12 billion by 2026, but that the knock-on effect of damage to eBay will absorb most of the early impact. Given that much of the direct impact will be absorbed by big retailers, the short-term impact on specialty stores is likely to be minimal – maybe 2 per cent (August, Financial Review).

So, what does Amazon say? Inside Retail says Amazon sees its priority as ‘providing the best shopping experience we can for customers all over Australia.’

Isn’t that what ALL retailers aim to do? And aren’t specialty retailers somewhat special?

Aren’t these the stores where we get to meet the business owner? Where we find goods you can’t find in mass retail outlets? Where you can actually look at things in three dimensions instead of a tiny photo?

Where you can try something on knowing the people behind the counter will be there next week if you need to chat? Or when you want to know who made some beautiful thing and what their story is?

So, retail is changing. Everything does. So, customers are changing. Everyone does.

We might have to review our pricing expectations, find faster and better delivery options and make it easy to buy. We might have to understand our customers better, upskill in digital marketing and analytics and start using newer technologies. We need to delight our customers through superior service, great products, and by telling the story of ‘why’ those products are worth buying and why we are the people to go to. It does seem retailers are fighting back already because online growth is slowing according to NAB’s online retail sales index.

So, going back to Kenny’s view of the world. It isn’t time for specialty retailers to fold, walk away or run in fear of this retail giant. It’s a time to hold and a time to show to our customers that staying with us will bring something different and better.

Edward Duc is Chair of Newcastle Now

This Opinion Editorial appeared in the Newcastle Herald on Thursday 22nd September 2017.

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