Big shops planning Aussie invasion

IT’S been a big few years for international retailers invading Australia, and the global takeover is far from over, with some exciting openings ahead in 2016.

Rosie Huntington-Whiteley poses for photographers as she promotes her first fragrance, Rosie for Autograph, at the Marks & Spencer store on Oxford Street, London.. Picture date: Thursday January 29, 2015. Photo credit should read: John Stillwell/PA Wire

IT’S been a big few years for international retailers in Australia, with global heavyweights from Sephora to Muji to Aldi spreading across the country.

The great Aussie invasion is far from over, however, with overseas brands increasingly attracted to our sunny shores and secure economy. This year will see a string of fresh arrivals and the expansion of new favourites from the US, Europe and Asia.

Just 39 of the world’s top 250 retailers are open for business in Australia, according to a recent Deloitte report, so there’s plenty of room for more. Here’s what’s in store for 2016.

FASHION

Homegrown department stores will be sweating over the impending arrival of British stalwart Marks & Spencer, a one-stop shop for fashion, food and homewares, and its UK competitor Debenhams, which struck a deal in October to sell its private label through Harris Scarfe.

“Myer and Big W don’t have that identity,” Geoff Dart, director at DGC Advisory, told news.com.au. “(Myer and Big W) lack an understanding of consumer buying behaviour and how to develop a value proposition.”

Banana Republic, J Crew and Under Armour will open stores while French makeup game-changer Sephora is expanding, as is UK high street fashion leader Topshop/Topman.

Swedish H&M announced Australia was its strongest market worldwide in July, with its sophisticated older sister COS recently opening in Sydney and Melbourne.

South African value chain Mr Price opened its first Australian stores in October, presenting serious competition for Target and Kmart’s fast-fashion offerings.

European affordable sportswear retailer Decathlon has also seen room for entry in Australia and super-cheap US fashion brand Forever 21 launched in Brisbane in November 2014.

Japan’s unisex fashion retailer Uniqlo added two Queensland stores to its Victoria and NSW offerings. “We are buying global as fashion goes global,” said Mr Dart, while big brands are getting their heads around seasonality so clothing lines don’t feel six months old.

COS, H&M’s sophisticated older sister, recently hit Sydney. Picture: Craig Greenhill

FURNISHINGS

Ikea and Harvey Norman face competition on the homewares front from Spanish style behemoth Zara, which hit Australia in 2011 and has been one of our top 10 clothing brands ever since.

It launched Zara Home in Sydney in December and is expected to open in more locations this year. H&M is expected to bring over its homeware line, too.

Minimalist Japanese homewares brand Muji opened in Sydney this year after hitting Melbourne in November 2013. US homewares giant Williams Sonoma, owner of Pottery Barn and West Elm, announced its expansion to Queensland this year. American brand Ashley Furniture has also been expanding in Australia since 2014.

US retailers dominate the Australian retail market, accounting for 46 per cent of the world’s top 250 operating here.

LUXURY

Luxury lifestyle brands see wealthy, English-speaking Australia as an attractive market. Gourmet food retailers Eataly and Dean & Deluca as well as aspirational Harvey Nichols and Hamley’s Toys are all rumoured to be eyeing a move.

Leif Olson, from commercial real estate company CBRE, told news.com.au that labels previously sold through outlets — Tom Ford, Givenchy — are opening their own stores so customers can enjoy the full experience through staff who know the product and the way it’s displayed and styled.

Up-market brands including Hugo Boss, Emporio Armani, Gucci, Stuart Weitzman, Ted Baker, Coach and Furla are looking at opening second stores in Melbourne.

Cartier, Omega, Valentino, and car manufacturer Haval opened stores last year and Tiffany, Audi, Tesla, Sony Paul Smith, Marc Jacobs and watchmaker Breitling are seeking bricks and mortar in 2016.

High-end fashion brands including Moncler, Agent Provocateur, Escada, Miu Miu, Carolina Herrera, Rag & Bone, AllSaints and Missoni are all looking for retail space, according to the AFR.

Zara Home is set to shake up the homewares market.

FOOD AND DRINK

Since June, industry insiders have been predicting that discount German grocery store Lidl is preparing to launch in Australia. That could be bad news for its biggest global competitor, budget supermarket chain Aldi, which came to Australia from German in 2001 and now holds nearly 11 per cent market share on the east coast.

It is planning a major store expansion in South Australia and Western Australia this year, while US retailer Costco is opening a few more stores.

“We’ve got a fairly lazy retail industry,” Geoff Dart, director at DGC Advisory, told news.com.au. “They’re slow to react, which is why Costco and Aldi have done so well.

“Price is still an issue, supply chain variety and fresh meat, poultry, bread, fruit and vegetables. There’s certainly a gap. The attraction for them is we have high price margins.”

The food and beverage and convenience sectors are very concerned over ever increasing levels of competition in the market. But it’s good news for shoppers looking for low prices and a great range.

CHINESE INFLUENCE

Australia will welcome a million Chinese visitors next year, and it’s time that influence started shaking up the market. There’s a huge amount of Chinese merchandise already on sale and tourists love to shop overseas.

Two of the biggest online performers — low-cost Alibaba and JD.com — could be set to enter the Australian market with bricks-and-mortar stores, according to Deloitte.

Partner David White said: “The strength is around online retail in China, their two biggest retailers are both online performers and are well placed in the top-50 fastest growing retailers globally.

“The advantage of coming to a country like Australia is it’s not a huge market so the investment wouldn’t be as high if they were looking at Europe or America and geographically Australia is close.”

Mr Dart says China’s influence could also change how we shop, forcing stores to open later to cater for their preference to shop after-hours. “Travel would be a fantastic place for DJs, Myer and Big W to expand their trusted brand in the lifestyle arena, but they’re not looking beyond the square. They’re all trying to go for commodity products like insurance instead of value adding with travel or home ordination.”

China’s Alibaba is about to take Australia by storm. Pictured, CEO Jack Ma. Picture: Bloomberg News

GOING DIGITAL

The internet is increasingly important as we shop from international retailers online and check out products before we go to a store. “The world’s a smaller place,” said Mr Dart. “It’s becoming a lot easier to shop, although Australia is still behind the UK and US when it comes to the percentage of shopping done online.

“It’s about low-price, efficient delivery and exchange policies. The shopper is becoming more discerning and time poor and wants convenience and value for money”

Deloitte’s survey highlights the growing importance of technology, with more shoppers embracing cultural trends and connected all the time. It said Australian consumers who use digital devices to research, find and compare products can boost sales, but brands need to be dynamic and willing to take a risk.

FIGHT OR DIE

Retail doctor Brian Walker told news.com.au he is not surprised at the wave of new entrants into the Australian market, particularly in food and fashion.

“The Australian economy is comparatively good, cash returns reasonable, there’s a great opportunity,” he said. “With over 1400 retail centres, predominantly on the coast, it’s a microcosm, very concentrated, with a lot of choice. We’re pretty discerning. The Australian customer loves to travel, we’re tech savvy people. We are a nation of shoppers.”

These brands shouldn’t assume we’ll be pushovers, however: in June, Abercrombie & Fitch announced the closure of its youth-orientated offshoot Hollister in Melbourne and Sydney because sales were more challenging than expected.

Despite the recent influx of international brands, Australia remains relatively unsaturated with overseas brands compared with countries such as the UK.

It’s going to be a time of greater competition in our malls and an furious battle to stay relevant and ahead of the curve. Australian brands will either improve, or pay the price.