With steady year-on-year growth, stretching across seven quarters, the $19 billion department store sector has plenty of cause for optimism. Emma data shows why the South African retailer Woolworths has put in a bid of $2 billion for David Jones.
One in two (49%) consumers say they love to shop, which represents a pool of 8.5 million eager customers. Most women love to shop (60%), but there is a substantial minority of men who love a dash of retail therapy (38%).
Department store patronage remains strong, with two-thirds of the population (10.5 million shoppers) walking through their doors every month.
Discount department stores dominate
According to emma, discount department stores dominate their high-end counterparts for market share.
Big W, Kmart and Target attract value conscious customers in big numbers. Big W is the category leader, luring through their doors 44 per cent of shoppers in the past four weeks. Kmart and Target are also performing well attracting 40 per cent and 37 per cent of shoppers in the same period.
David Jones and Myer lag behind their value-oriented rivals. Some 16 per cent of shoppers have visited Myer in the past four weeks with David Jones attracting 7 per cent.
The high-spending female 30-44 group are drawn more to the discount stores and are 34 per cent more likely to shop at Big W while nearly a quarter (24%) are more likely to shop at Myer.
Value-based department stores also have strong appeal outside of their traditional core market of mums with children. For example, 48 per cent of women in the fashion conscious 18–29 age group visited Big W in the past month.
Despite the gap in market share between the big two players and their discounter rivals, DJs’ prospective new buyer feels it can return the shopping icon to former glories.
It will undoubtedly enlist newspapers to reinvigorate the bricks and mortar stores.
Newspapers provide mass reach and drive shoppers in-store
With department stores appealing to most of the population, they need mass reach media to communicate their offers. This is why they have for many years been heavy users of print. Newspapers still perform this role effectively, reaching 83% of the population every month.
With regional and community newspapers having defined geographical footprints, department stores can localise their advertising, targeting consumers with offers in the stores that are close to where they live.
Newspapers in general are proven to be effective in driving a call to action for retailers.
Stronger domestic online shopping provides opportunity
Department store owners are looking beyond bricks and mortar to grow sales. Internationally, department stores have adopted a multi-platform strategy, using their physical and online stores to engage shoppers 24/7 and, ultimately, grow sales.
Recent online shopping figures highlight the opportunities available to domestic department stores.
Latest NAB Online Retail Sales Index shows that spending growth by Australians on international online stores has stalled on the back of a near-10 per cent drop drop in the currency against the US dollar, while local e-tailers have 74% of the market.
Emma supports this, showing more online shoppers bought from Australian sites in the past four weeks (71%) than an overseas site (62%).
Domestic department stores underperforming online
In light of the impressive growth in local online shopping, department stores have underperformed. emma shows just 2 per cent of shoppers have bought from department stores’ online platforms in the past four weeks.
Just one per cent have shopped online with either David Jones or Myer.
Department stores need to improve their online performance. A strong integrated, multichannel sales strategy improves the shopping experience, drives loyalty1 and will help win market share back from e-tailing pure players such as The Iconic and ASOS.
Newspaper media can be a powerful ally in attracting online shoppers.
Newspaper Readers Are Online Shoppers
A recent Google study found two in every five smartphone owners (41%) have used their phone to make purchase, and of these mobile shoppers, the majority (58%) buy something from their mobile at least once a month. Furthermore, a buyer’s effort to research a product on their smartphone often leads to purchases from a PC (41%) or at a store (39%).
Department stores should correspondingly make mobile an integral part of their online offer.
Smartphone owners who read newspapers on their devices are 22 per cent more likely than other smartphone owners to be online shoppers, according to emma. They are therefore a fertile audience for department stores to target.
When department stores are constructing their multi-channel strategy, newspapers should be built into the plan. Among PC and laptop web users, the newspaper reading component is 36% more likely to have shopped online than non-readers.