The Retail landscape in Australia has undergone a huge change over the last few years. With the increasing competition and the introduction of the new players in the market, the retail landscape of Australia has experienced a cut throat competition like never before (Treadgold and Reynolds 2016). Adding to this, the advent of e-commerce and online experience has forced the traditional businesses to re-design their business operations and to adapt to better ways of satisfying the customers. According to Fulgoni and Lipsman (2016), it is not about the prices anymore but about the experiences that the retail store will be able to provide to the customers. Hence, the primary objective of the report is to highlight the changing landscape of the retail industry in Australia with reference to the retail giant Coles and provide certain recommendations in order to understand how Coles can make use of Internet Technologies in order to improve their operations at large.
The Coles Group is a supermarket giant present in Australia and has been in operations over a 100 years. The retail store provides good quality products, excellent consumer service and a greater value to the Australians with its private label as well. The retail group is committed towards providing excellent services to the Australian consumer market and supported the local farmers and jobs as well. This way they have aimed to march towards a sustainable future. The company has its headquarters in Hawthorne East Victoria in Australia and has around 807 locations around the country (Coles.com.au. 2018). The retail giant has been performing well and has earned an operating income of a$ 1.9 billion in the year 2016 and has a large employee base of over 100000 employees. The Coles group is a subsidiary of the Wesfarmers conglomerate and has an online website for shopping services as well.
The company was found in the year 1914 by George Coles and is the second largest retail giant after Woolworths. Moreover, until recently, the firm was a subsidiary of Wesfarmers but recently it has signed a demerger of $ 20 billion from Wesfarmers which shall be completed in the year 2018 in November.
In order to understand the shift which has taken place in the retail sector of Australia, it is first crucial to understand the dynamics which shapes the given industry. The two main changes which have taken place in the retail environment in Australia is that the customers have become more informed and along with that the proliferating products and niches have increased considerably (Gattorna 2015). The customers now have an access to more information and hence, they can easily switch from one brand to another. Along with this, in order to understand about the products, the customers are no longer required to visit the stores but can easily just have an access to the online websites (Uhl and Gollenia 2016). This changing trend can be termed as the big shift and has shifted the balance between the businesses and the consumers.
With regard to the products and niches, there have been various technological improvements which have bought about changes in the manner in which the producers produce their products and enable the demand as made by the customers (Hagberg, Sundstrom and Egels-Zandén 2016). As technology has advanced considerably, the shoppers have shift from the mass market environment to the niche markets.
Due to the big shift the different customers of the store in Australia have changed the way in which they shop. This means that earlier, the options to compare for the product was quite less and that the customers were required to visit the different stores in order to understand the difference in prices but now it is not the case and currently, the customers can check the prices of the products being offered online itself and even purchase the product thereby. This has reduced the footfall in the stores as well (Melis et al. 2015). Secondly, the shift has considered the niche markets and it is for this reason that the supermarkets like Woolworths as well as Coles have been now trying to engage in private labels which assist the organization in developing this niche market which the customers have been looking out for.
In addition to this, the online shopping of Coles has also increased considerably and now instead of facing the hassles of visiting the stores and purchasing the products, the shoppers now look out to shop using the website. This is the reason, Coles has now optimized the website of the firm.
The internet technology has not only enabled the concentrated players as present in the market but has also increased the supplier side of the market. This increase in the supply side has bought about a huge change in the profitability of the firms and has led to a lower profit phase for the major retailers (Kpmg.com. 2018). With respect to Coles, it can be stated that earlier, Woolworths and Coles were the only companies who were ruling the Australian Supermarket but currently this is not the case and at present there exists a presence of a large number of players in the market. These players together have a considerable share of the grocery market and this has bought about a huge change in the market. In addition to this, with the entrance of Amazon, the Australian retail landscape has changed considerably.
The impact of these entrants have been hard on Coles who was already struggling with the strong competition which it faces from Woolworths but now Coles has to strategize and come up with better policies which will assist the firm in gaining success over the different competitors.
Figure 1: The market share of Coles
(Source: Coles.com.au 2018)
Earlier the rules for the food retail industry in Australia were very simple in nature, it involved an acute balance between the products being offered to the different customers and the price of the products. Woolworths and Coles often engaged in price competitions and the firm which was better at it was successfully able to combat against the competition. However, the rules of the game have changed considerably and now just the price leadership is not enough for the firm (Verhoef, Kannan and Inman 2015). Coles will be required to take a new role in this given segment and this gives rise to the strategy of now providing experiences to the customers. According to Kwak, Duvvuri and Russell (2015), customers no longer visit the stores because the products are good or because the prices are cheap but because they gain a refreshing experience at the store. For this reason, a company like Coles will now be required to maintain a balance between its physical store offerings and the online store offerings. The customers need to be offered a seamless shopping experience which will then enable them to attain their goals and gain their respective products. It needs to be understood that the organization is required to present a single picture to the different retailers and blur the line between the online or the offline store. For this reason, the transformation needs to be made by the retailers like Coles but making this transformation is not easy and in order to ace in this game, the organization would be required to approach the business holistically (Henriksen 2015). One easy way of doing this would be to transform the front of the store to a virtual one with unlimited shelf space. In this manner, the physical spaces act as a catalyst for the engagement of customers and provide memorable experiences to them.
Hence, it can be understood, that the future landscape has been transforming considerably and the players like Coles are now required to connect their offers in the form of an experienced bazaar and market place, Coles will now be required to act as a mobilizer and must now transform the stores (So et al. 2016). They will be required to bring together the elements of the ecosystem to share interests and enable learning. Along with this, they will also be required to capture the fragmented consumer interests. They latest trend is acting like a mobiliser and for this purpose, the retailers are required to connect deeply with the different communities and understand the manner in which the shift takes place in the behavior of the consumers (Haldorai, Ramu and Murugan 2018). For this purpose, Cole needs to widen its base and foster a community which shall support, the firm in the long run and in the same manner, Coles will be able to successfully understand the changing trends of the market.
Conclusion
Therefore, from the given analysis, it can be largely understood that the retail landscape in Australia has changed considerably and due to this the retail landscape of the supermarket retail has also changed considerably. The report highlighted the different changes and shifts which exist in the retail landscape in Australia. Along with this, the report has also highlighted the different changes which have taken place for Coles and provided certain recommendations based on how Coles is required to change its strategy with respect to the changing technology.
Hence, from the given analysis, it can be recommended that Coles needs to make use of internet technology to further bring about the balance in providing both physical store experience as well as the internet experience. The following recommendations have been provided:
Indulge in a wifi enabled device which assist in customers shall automatically add items to the shopping lost. Using this system, just simply using the device, the customer can make the billing purchase of the items and will not be required to carry the items. This is predicted to improve the overall performance of the stores and reduce traffic (Hair Jr and Lukas 2014). However, this can largely be done in case of home delivery options for the difference in time between purchasing and picking the products.
Moreover, it can also make use of artificial intelligence so that the customer can simply enter a store, which may not be necessarily stalked and use artificial intelligence to order to products and get it collected later. Using these technologies connected with the previous preferences of the consumer, Coles can ensure that instead of competing with the price or with the product, it provides competition to different players by using a sustained experience to the consumer.
References:
Coles.com.au., 2018. About Coles. [Online] Available at: https://www.coles.com.au/about-coles (Accessed on: 19. Sept. 2018).
Fulgoni, G., and Lipsman, A. ,2016. The future of retail is mobile: How mobile marketing dynamics are shaping the future of retail. Journal of Advertising Research, 56(4), 346-351.
Gattorna, J., 2015. Dynamic supply chains. London: Pearson Education Limited.
Hagberg, J., Sundstrom, M. and Egels-Zandén, N., 2016. The digitalization of retailing: an exploratory framework. International Journal of Retail & Distribution Management, 44(7), pp.694-712.
Hair Jr, J.F. and Lukas, B., 2014. Marketing research (Vol. 2). McGraw-Hill Education Australia.
Haldorai, A., Ramu, A. and Murugan, S., 2018. Social Aware Cognitive Radio Networks: Effectiveness of Social Networks as a Strategic Tool for Organizational Business Management. In Social Network Analytics for Contemporary Business Organizations (pp. 188-202). IGI Global.
Henriksen, L., 2015. The retail environment for tobacco: a barometer of progress towards the endgame. Pearson.
Kpmg.com., 2018. Home insights. [Online]. Available at: https://home.kpmg.com/au/en/home/insights/2018/04/bernard-salt-next-5-years-retail-future-australia.html (Accessed on: 19 Sept. 2018).
Kwak, K., Duvvuri, S., and Russell, G., 2015. An Analysis of Assortment Choice in Grocery Retailing. Journal of Retailing, 91(1), 19-33.
Melis, K., Campo, K., Breugelmans, E. and Lamey, L., 2015. The impact of the multi-channel retail mix on online store choice: does online experience matter?. Journal of Retailing, 91(2), pp.272-288.
So, K.K.F., King, C., Sparks, B.A. and Wang, Y., 2016. Enhancing customer relationships with retail service brands: the role of customer engagement. Journal of Service Management, 27(2), pp.170-193.
Treadgold, A. and Reynolds, J., 2016. Navigating the new retail landscape: a guide for business leaders. Oxford university press.
Uhl, A. and Gollenia, L.A. eds., 2016. Business transformation management methodology. Routledge.
Verhoef, P.C., Kannan, P.K. and Inman, J.J., 2015. From multi-channel retailing to omni-channel retailing: introduction to the special issue on multi-channel retailing. Journal of retailing, 91(2), pp.174-181.
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