Time to re-shape retail

I lead an exciting life at times – and a rather less exciting one at others. Yet I am always surprised by the way some things appear to be exciting, until you get closer and find out that they aren’t – and of course, vice versa.

I spent most of last week wading through all 461 pages (including appendices) of the Productivity Commission’s Economic Structure and Performance of the Australian Retail Industry report.

To my great surprise, it was a seriously good read, which was put together by seriously bright men and women, with a very dry sense of humour.

We know they are bright because they have an equation (that’s the very long one we did in maths classes that made our brains hurt) with four variables, which models the change in retail sales. That’s clever stuff.

Funny? Well, buried deep in the appendices they gave the example of price differentials between online and bricks and mortar shopping for high volume and high profile items such as Harry Potter DVDs, Lady Gaga CDs, PS3 games. And tucked away amongst theses international blockbusters was John Howard’s autobiography, Lazarus Rising. Oh, and it’s cheaper on an international website than on an Australian store website, by $2.78 per copy including shipping. Perhaps this proves that the laws of supply and demand do work.

Gary Banks, AO is the Chairman of the Productivity Commission, and does an outstanding job of gently and subtly providing our Federal and state political leaders with bipartisan advice and recommendations to improve the quality of our lives. And I’m not being flippant in that statement.

Banks looks as though he could be related to Merlin, the Welsh Wizard; a heroic character, that one might assume is close to our Prime Minister’s heart. He has been working his magic for 21 years and consistently supplying our governing leaders, irrespective of the political party in power, with very sensible and very pertinent advice to improve the overall quality of life of all Australians.

Sadly, our political leaders don’t always act on his advice, which is to the cost of all Australians. The recommendations made by the commission in 2008 and 2009 have had to be re-stated in the 2011 report, as they still have not been adopted. That’s three years of Australia falling behind other countries’ productivity improvements and three years of unnecessary price increases for all Australian shoppers.

To simply edit the recommendations into a short blog wouldn’t do justice to this work. I am however facilitating a working session with some of our nation’s top retail executives at a conference this week, where many of the issues raised by small and large retailers alike will be discussed in detail, and compared with US and European retailers.

The simplest distillation of the work completed by banks and his team is this: Should our political leaders, union leaders and business leaders not find a collaborative way to re-shape the way our shops are zoned, our retail staff are paid, and both are integrated into the online world, our cost of living will rise, creation of jobs in our huge retail industry will fall, and when the mining boom ends, we will have a recession not seen by this nation since the 1930s.

The contents of this large document are actually a big deal.

In his role as CEO of CROSSMARK, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia, NZ, the US and Europe. His international career in sales and marketing has seen him responsible for business in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands. CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.