Department stores should ask suppliers for rent to sell products: Retail expert

Myer and David Jones should seek a marketing fee from suppliers in response to people using their stores as a changing room, a retail expert says.

A study by retail consultants Eloquence Group has found that many items advertised by department stores as “exclusive” are in fact available online through the supplier’s own website or rival fashion sites.

And contrary to expectations that department stores charge much more for identical products sold online, the study found that there is little difference between the Myer and David Jones pricing and online offerings.

Jeff Sher, Eloquence Group managing director, says department stores need to manage their relationship with suppliers better, and in some ways crack the whip.

“Be strategic,” Sher says. “Say, we’re putting these products on our shop floor, what rent are you going to pay for that?”

He also advises they look for private label opportunities and tighten up deals with suppliers so their products are truly exclusive.

“I’d hate to think as a retailer that I’m putting a product in my catalogue as an exclusive, and people can buy it elsewhere.”

“Say, these are the ranges I’m buying from you exclusively for in stores so you can’t sell them elsewhere online.”

The study found that 43% of the 176 major items featured in DJ’s August new season fashion catalogue were available online. Of the 77 available online, just nine were cheaper.

Myer, which has a higher proportion of private labels and has brought a number of labels in-house such as jeans group sass & bide, had a much lower percentage of products from its summer catalogue sold elsewhere. Of the 12 of 128 sold elsewhere, none were cheaper, the report says.

But this could change, Sher says, as suppliers boost online volumes and therefore reduce their reliance on the stores.