Myer unveils new store format to take on Amazon
Myer chief Richard Umbers. ‘We didn’t want to let on we were trying a new store format until we got it right’. Picture: Sam Rosewarne
Myer chief Richard Umbers. ‘We didn’t want to let on we were trying a new store format until we got it right’. Picture: Sam Rosewarne
Myer boss Richard Umbers walks the floor of his department store in Frankston, one of Melbourne’s most far flung suburbs nearly 50km from the flagship city store.
But it is here on the second level of Myer Frankston, that Mr Umbers is planning his fight against online giant Amazon with a new store format that has transformed the 4000sq m trading space into a specialised clearance and sale outlet.
Borrowing from US department store Nordstrom and its successful “Rack” branded clearance chain, as well as some of its own innovations, Myer Frankston is a pilot store for a new format that draws in unwanted and excess clothing, apparel and other stock from surrounding flagship stores and gives them a new lease of life.
A year in the planning and operating under the radar — not many stock analysts make the trek to Frankston — Mr Umbers plans to eventually roll out at least one in each state to act as each region’s central hub for clearance sales. “We didn’t want to let on we were trying a new store format until we got it right. It was done under the radar initially, having then got it right it now makes sense for us to test it here for a few months to see how it works,” he told
The Australian on a tour of the Myer Frankston store.
The concept, to lure more customers into the store, forms part of the defence strategy against Amazon, with the online heavyweight slated to roll out its retail offering locally in the next few years. “I think probably people have over-estimated Amazon’s short-term impact in the marketplace, but we have to be thinking far enough ahead as to how we are going to compete with them.
“I reckon that really dialling up the newness, the uniqueness of our range and in particular products that aren’t available on Amazon anyway … is the right way to defend ourselves against Amazon,” he said.
Myer has already identified its store at Roselands, in southwest Sydney, as the next site to take on a dedicated clearance outlet.
“In time we would see there would be seven or eight locations around the country which will be dedicated destinations for clearance merchandise that is supported by a network of premium and flagship stores, and as much as anything it is about lifting the standards in our premium and flagship stores as it is about creating the new format, they both work together,’’ Mr Umbers said.
Gone is the traditional black and white colourings of the Myer brand, and the Myer name is mostly absent. Instead the store is splashed with bright yellow signage and the staff wear a different uniform to Myer staff on the floors below and above them.
Central to the new store concept is that by shipping clearance stock to a dedicated store, for example, Myer’s flagship sites in the Melbourne CBD and Chadstone shopping centre dispatching excess clothing and apparel to Frankston, it then frees up space in the premium stores to bring in new, fresh stock.
“So that creates the space in the flagship store which means we can keep the ‘newness’ up and one of the most important things in terms of the Amazon defence side is keeping the ‘newness’, vitality and premium offer and experience of retail.”
But the new format is far from a dumping ground for clothing, fashion and apparel that the top line stores want to shed. The clearance store at Myer Frankston has its own merchandise purchasing executive who curates the collection, tailoring it to the needs of shoppers in the Frankston catchment area.
“It’s branded ‘Myer clearance’, because we understand the Myer brand stands for something and so we were determined this wasn’t going to be a down-market offer. In the way it is presented, it is still a quality retail offer so it is still merchandise with mannequins and the product is properly presented; it is not a junk shop it’s a well put-together offer because it has ‘Myer’ across the top.
“And the idea is when we reach a certain point in the merchandising cycle, at the flagship and premium stores the emphasis can be newness so we get aged stock out of that business, to a distribution centre, pull the product back, re-sort it, reconfigure it to get a depth of range and then push that to this store (Frankston) and sell it under a new price and banner.’’
So far at Myer Frankston it’s working: traffic is up — which the shopping centre landlord is happy about — and sales to 18 to 25-year-olds is up 40 per cent as they are drawn in by brands not typically available before at this particular Myer outlet.
Hence the confidence to push out the format to other states, as well as take on ideas from the pilot store in Frankston that might work at Myer’s flagship stores.
(20min delay)