New Zealand’s retail industry is facing stiff competition with an insurgence of international players both online and on the high streets. Holder of the Sir Stephen Tindall Chair in Retail Management at Massey University’s Albany Campus, Professor Jonathan Elms, is helping the industry adapt to the new challenges, while championing retail as a professional career option with Massey’s Bachelor of Retail and Business Management.
We asked Prof Elms to share some of the key issues and trends influencing the New Zealand retail market, today.
Internationals disrupting New Zealand market
A recent influx of large international retail companies – like high street fashion franchises H&M, Zara and Top Shop – is the most disruptive trend the New Zealand retail sector has seen since the advent of online selling. The arrival presents both challenges and opportunities for domestic retailers according to Prof. Elms.
“It’s giving consumers a variety of new and novel choices, and will really crank up competition and as a result, innovation in that area of the industry,” he says.
Amazon breaks Australasian soil and changes online shopping landscape
Buying products online is now an accepted way of life for Kiwis, but the landscape is still changing for both consumers and vendors. The recent creation of a Melbourne distribution centre by online juggernaut, Amazon, is set to intensify competition.
Prof. Elms warns that the impacts of international companies selling to New Zealanders online will affect everyone.
“We’re going to see the disappearance of some well-established local retailers in perhaps five to 10 years. For consumers, in the short run it could be nice to have all these products from different suppliers. Long term, we could see an erosion of choice because of domestic retailers going out of business due to international players using quite sophisticated online platforms. However, the potential fall of some domestic companies could motivate others to radically rethink their approach and become more innovative as a result.”
Retailers hopeful for lucrative Christmas after poor election year figures
Lower than average sales figures were reported through the middle of 2017, putting immense pressure on retailers to generate more business over the fast-approaching Christmas and Boxing Day period.
“With the insecurity surrounding the election, retail confidence has been down. Around 50 per cent of retailers were reporting they weren’t projecting to make their usual targets,” he says.
The knock-on effect is an increase of the already apparent ‘Christmas creep’ phenomena where retailers are promoting Christmas sales earlier and earlier in the year in an effort to maximise profits. This trend is global, Prof Elms offers, but is most popular in countries that don’t celebrate Halloween with the same fervour as the USA, and as such have fewer sale opportunities between October and Christmas.
“Retailers are spending a lot of time and investment getting Christmas products out and promotions underway. It can be a really lucrative time for retailers who get it right, but if they don’t, it can be catastrophic,” he says.
Highlighting the skills shortage in the retail sector
After arriving on campus in 2014 to lead Massey University’s Bachelor of Retail and Business Management, Prof Elms established the Centre for Advanced Retail Studies (CARS).
“The objective of CARS is to help the industry to professionalise itself, change the often-negative perception around retail work and employment, and try and make retail a career choice.”
His position as the Sir Stephen Tindall Chair in Retail Management is funded by The Warehouse Group, offering him an abundance of opportunities to work directly with the industry to highlight the educational provisions it requires.
“There are currently three critical roles retailers are finding increasingly difficult to fill – digital positions, buying and merchandising,” Prof Elms explains. “A lot of big retailers are hiring people with these skillsets from overseas, and we’re not sure what implications the new government and their immigration policies will have on this… they may stunt retail sector growth and have a potentially detrimental effect on the industry as a whole.”
Forming ties between education, retail industry and the North Shore
Prof Elms and his colleagues at Massey University are working hard to create strong links between academics and the retail industry through the likes of The Big Retail Survey (an annual survey assessing the health of the retail industry and emerging challenges and opportunities) and thought- leadership events and activities.
Massey’s Bachelor of Retail and Business Management is currently the only retail degree offered in New Zealand. Prof Elms is excited about Massey’s Grow North initiative and thinks Auckland’s North Shore is a great spot for his graduates to spread their wings.
“There are some really interesting companies that have established or expanded themselves in the Grow North district – a lot of tech companies; large retailers like Mitre 10 Mega, The Warehouse Group and Vodafone; but also a lot of small, boutique and unique retailers who are doing something new, novel and different.”