Retail management can be defined as the procedure which helps the consumers in procuring the expected merchandise for their own use from retail outlets. It offers a brief of the theory of the visual-based merchandising and gives consideration towards customer relationship management, sales and brand management (Bogomolova, Szabo and Kennedy, 2017). It can be said that retail management varies from country to country from economic to cultural aspects and lays different emphasis on sales and brand management as well. By considering this factor, the present aims to differentiate structures of supermarkets of Australia and Japan. Further, it will include; potential size and profitability of retail industry of Japan and Australia for a better understanding of both the markets. By considering this, problems faced by supermarkets in both the countries will be analyzed, and the impact of cultural factors will be discussed to provide suitable recommendations to the companies operating in these markets.
Interpretation of the differences in the structure of retail markets between Japan and Australia
In the past few decades, Australia has gone through a considerable consideration of ownership in the retailing market and structure. The retail industry is considered as a considerable driver to the economy of Australia; large-scale businesses generally experience more of profitability as compared to the small-size business. Further, it can be stated that the large-scale retailers enjoy higher returns based on capital as compared to the international ones (Scott, 2017). The productivity level in the retail industry of Australia is lower than the other countries; the Australian retail industry can be classified as more diversified yet heterogeneous in terms of the industry as well as geography. Similarly, the establishment of the retail e-commerce industry is forming higher diversity throughout the industry and lays challenges in the participant’s market positions. The Australian retail market has the largest proportion of the retail outlets owned by the larger and varied location retail chains.
On the other hand, the retail industry of Japan is considered as being more sophisticated over time, the retail sector of the country has representing reasonable growth, and has a higher number of liberally owned, tangibly small-scale stores (Jary and Wileman, 2016). Japan has more of retail stores as compared to Australia, and another difference is that Australia’s establishment and organizations are generally the largest and the Japan ones are smallest.
Japanese supermarkets are organized as same as the other parts of the universe organize the markets. The main food groups contain seafood, pickled, fruits and vegetables, animal protein, milk products, meat, bread, ready to eat food, tofu, non-alcoholic and alcoholic beverages, dehydrated and canned food. Huge variety of cleaning materials and domestic products are vended by these supermarkets (Kono, 2016).
There are so many supermarkets in medium-sized towns and cities and on the outer edge of Japan; nonetheless, to discover the centre of the biggest city in Japan is very complicated. However, it includes so many varieties of stalls are there and selling a wide range of dishes, by such stalls the experiences were different like as enjoyable and lovely but as compared to the normal markets it is considered as the costly supermarket (Scott, 2017). The prices of Japanese Supermarkets are rationale, with the combination of both qualities of food cheaper as well as branded products are on sale to facilitate the span frozen foods, snacks and bread and other food items. Usually, as compared to the convenience stores, prices of the supermarket are low-priced; on the other hand, supermarkets are not open 24 hours like the convenience stores. Generally, supermarkets are closed around nine or ten in twilight (Wrigley and Lowe, 2014). It should be reminded that the supermarkets started to money off the unsold lunch food approximately 14:00 and prepared foods starting from around 19:00. The rate of discount stared from 10 to 20%. However, it gradually rises until closing, and it ends at the higher rate of 50 to 70%. In several supermarkets, some vegetables and fruits that are not to be a sale at its price like as overripe and stained or something else are to be discounted. In other countries, consumer picks and chooses the desired item from the shelf and then put into the basket and afterwards proceeds for the payment (Jary and Wileman, 2016).The top retailer in Japan is inclusive of Walmart, AEON, Tesco PLC and so on. In Japan, mainly checkouts are done by manned; on the other hand,self-service scanning machines are increasing growing. Nevertheless, it is very general in supermarkets to charge a small amount on shopping bags, in very rare case the shopping bags are offered to customers without charging any payment.
Measurement of potential size and profitability of retail industry between Japan and Australia
The retail industry of Australia shows higher diversity in terms of business size, retail structure, region and competition in the sectors and in the context of sold goods. Further, the Australian retail industry is diversified by the sector, region, size and the competition exposure. The aspect of profitability in the Australian retail sector is associated with the size of the firm. It can be said that the larger firms and establishments based in Australia earn more profit and drive more return on capital as compared to the smaller ones, because the larger organizations are exposed to higher international growth, offshore counterpart’s opportunities due to which they are able to take benefit of economies of scale (Sutton-Brady, Kamvounias and Taylor, 2015). On the other hand, due to the lower unit of production, their cost of goods or products are comparatively higher for larger organizations, so in this aspect, they are imposed to lower profitability. The retail industry makes a considerable contribution to the Australian aggregate profits. It can be said that almost half the profit generated is subjected to other retailing based on stores. It must be noted that average profitability is highly impacted by the overall business size. Larger retail traders perform comparatively well when it comes to smaller retailers, and these large firms have the benefit of higher profit margins as compared to their overseas equivalents. However, there is reduced the profitability of local retailers (Bogomolova, Szabo and Kennedy, 2017). Despite the slow growth in the retail sector, the profitability of the sector has been approx the average for the sector as a large. Thus, indeed the profitability of the larger retailers tends to be better in comparison to the industry average.
On the other hand, Japan is still subjected to over 55% of the entire retail market of Asia. It can be noted, that in both of the countries, an increase is obvious in the larger business sizes, singular stores still have the similar sizes. Japan is considered the second largest retail market in and across the world with 127 million customers connected that are proud of their top-notch quality and better services (Jary and Wileman, 2016). Japan retail market also has the highest demand in terms of food imports and possess the best opportunity for food-related brands with outstanding product quality. Over and Over, the retail sector of the country has been stating reasonable growth, at present, there are approx 3,124 shopping malls, 240 departmental stores and 52,417 convenience stores throughout Japan. As compared to most of the other countries, the difference in the size of the store is higher in Japan. There are several small-sized stores, but also a significant amount of very large stores (ALLIANCE EXPERTS, 2018). The business of retailing in Japan is mature enough, being at the level of saturation for the large-scale and traditional markets. The unit of production in Japan retailer markets are low, but the cost and pricing structure is higher, at the most the profit generated is comparatively low. Overall, the Japan retail sector is stated as having distinctive features from the retail system in Australia.
Estimation of possible problems facing the retail industry between Japan and Australia
Due to the Australian retailer’s revenue has been traditionally driven by the in-person transactions, the majority of the companies are not able to embrace the web services in a rapid manner. It is considered as the main issue because the digital marketing is the manner to interpret the customer experience level and standards. Moreover, the problems also come in the form of low spending of customers as they are saving more money. Therefore there are a low amount of customers for retailers (Suez Technology, 2018). For Australian retail sector, the major threat is online and being the major competition, as most of the customer now prefer buying online, so it is essential for the retailers to ensure customer loyalty and repetition. Another problem is customer experience and services, which is declining over the time, because of the tough and larger competition and higher prices. To stream with these continuous challenges, online sales are also increasing in a rapid manner, and big large overseas retailers are constantly opening in Australia which is also a problem in itself (Bamiatzi and et al., 2016). It does not seem to have a good situation, and most of the retailers are feeling pressure from the same.
Amongst all the given challenges and problem faced by the retailers of Australia currently, the most pressing and the most general is the operating day to day expense of conducting the business (Ruth,2018). The retailing industry future is structured by the disruptive factors like the fluctuating customer spending patterns in Australia and the emergence of the offshore competitions that come with an entirely new approach towards retailing.
On the other hand, in Japan, their huge area amount of workers employed in the retail industry. However, the productivity is comparatively less. There are many obstacles that avoid more effective, larger retailers from fostering productivity. On the whole, retail productivity within Japan is stated as 50% of that in Australia. Although the Japanese retailing productivity is less, mainly due to the aspect that larger retailers have not done the replacement of the highly non-productive conventional (Yeung and Coe,2015). At present times, the retailing in Japan has considered as a matter of economic interest, as the retail system tends to be the sources of the imbalances of trade. Also, there is a potential problem of barriers to entry to the large size retailers and barriers to exit to the conventional retailers are the most significant exterior barriers to the growth of productivity in this sector.
The main problems faced by the retailers of Japan are the modified taste of products and services, specifications to the customer taste and preferences in Japan, shortened time of delivery in order to drive freshness, updating and introduction of new products and services on frequent basis these all are considered as higher challenges for the retailers of Japan (Jary and Wileman, 2016). In addition, as discussed above that there are so many small retailers in the retailing market of Japan, which also is a great problem in his industrial field, as the customer shifting is counties and there are more fluctuations in pricing (Japan retail news, 2013).
Concerns of cultural factors affecting retailing in Japan as well as Australia
Australian retail industry maintains the personal and close relationship with the customer and provides more emphasizes to the establishment of an effective individual relationship is more challenging within an aligned culture. However, customer style of decision making shows a comparative trend of cognitive and better response, wherein the national culture has been evidenced to affect considerably on personal values (KPMG, 2018). In Australia, culture is considered as dynamic and is continually impacted by the fluctuations in the retailing environment. The retail market of Australia now seeks to consider the sustainable corporate practices, since the customer is likely to make an investment when they are aware of the impacts and their buying decision is also based on the same. Further, the retailers also face problems in dealing with the customer needs with the easy and effective services, in present era customer give more focus to the eco-friendly products and provide preference to retailers that show commitment towards generating a product that is sustainable (Kajalo and Lindblom, 2015). Also fluctuating social and cultural considerations, behaviours and lifestyle have led to considerable changes in the retail industry of Australia, individual are highly concern about their health and lifestyle nowadays. Thus, there is a need for the healthy, easy and sustainable food and products. Also, there is increasing participation and majority of the women in personnel, and the society is also encouraging the same in recent times.
The customer behaviours in Japan are moving in a dramatic manner, representing challenges as well as opportunities for retailers. Japanese customers are stated as having fair collectivistic cultures (Japan retail news, 2013). The culture of society and manner of conducting activities impact the organizational culture within an environment, mutual beliefs and customer attitude have a great role in retailers will interpret the customer of a particular market and the manner by which the retailers are designing marketing strategies for the industry related customers (McKinsey, 2010). The cultural factors that impact the Japanese retailing sector are the demographics and the population level, society structure an hierarchy, level of education, attitudes and interest of the customers.
There is a dramatic change in the behaviour and attitude of the customer in Japan, and it states a challenge for the organizations in the 2nd largest retail market in the world. The changes come in the form of the digital revolution and the emergence of technology, in a highly driven society, there are varied choices and expectations of individuals who demand the retailers to take extraordinary steps to survive in the market (Kumar, Anand and Song, 2017). For the retail business, it is a perception that is far away from demographics, as it assists in identifying the individuals who made the customer base, whole also help in considering their lifestyle and how the same can impact the relationship of retailers with them.
Once the retailers are able to mitigate with the threats and problem and capture all opportunities, then the retail industry of both the countries will have the potential to drive productivity and pressurize the upstream industries to enhance the same.
Both the countries’ retailers are required to embrace web service and derive technology from meeting up the demands and needs of modern customers they must introduce new ways of purchasing and making payments(Yeung and Coe, 2015). In addition, since there is the emergence of competition the retailers are required to make a strong customer base by offering excellent products and services at reasonable prices so as to attain a better competitive edge.
Like the other retail channels, supermarkets are facing major disturbance in the consumer’s shop for food. The key to success in retail business is to determine the talent and role of manager (Bogomolova, Szabo and Kennedy, 2017). The managers of this business faced strain from the varieties of responsibilities such as controlling inventory, training and supervising of employees, raising the volume of sales, hiring, engage in monitoring customer shrinkage, reducing payroll, therefore it is very important to create priorities while working with managers (Wrigley and Lowe, 2014). Moreover, the procedure of fixing priorities gives way to managers strength to increase the productivity and . There are five elements of management talent that are introduced by the Gallup Management Journal; it includes motivation, authority, work style, association and thought process. Variety of competition from local markets of farmers, multinational chains, and retail-giant Amazon, mass-market outlets such as Walmart and Target, and speciality stores such as Trader Joe’s and Whole Foods.
The retailers of Japan are required to replace the non-productive traditional retailers, as their productivity level is very low, by taking this initiative they will be able to drive more productivity (Jary and Wileman, 2016).
For attracting and maintain the long-term relations with the customers, so many services and products are adding by supermarkets. However, they increase the risk factor as well. The Chubb report points out that the responsibility of Store management is to maintain the proper and environment for workers and customers (Yeung and Coe,2015). It contains the checking of appropriate environment and training to make sure that customers and employees treat with one another in an appropriate way.
The supermarkets working in both the states and permits those to sell the wine, beer or hard liquid, then it increase the factor of risk, according to the notes (Wrigley and Lowe, 2014). Nevertheless, it shows that the significant part of sales of the store is alcohol, the policy of checking identification is important so as to decrease the sale’s risk in the direction of immature persons.
The policy of the limiting the amount of alcohol should be considered in stores so that the individual customer can purchase at a time, and observe the parking system a lot to keep the customers from drinking on premises (Bogomolova, Szabo and Kennedy, 2017). A customer vending wine and beers for using it in the stores and with foods yet increases the risk factor. Thus, also an application of Bootstrapping permits users to register their existing allegiance in relation with the system.
Conclusion
On the basis of the above analysis, the conclusion can be drawn that both of the countries have their own type of retailing system and their profitability, business size and cultural aspects differ from nation to nation. It can be said that both the countries are facing problems and cultural impacts, for which they are required to follow the given recommendations, as retail is considered as challenging, but with the right individuals and attitude, retailers they will be able to consider the tough and complex problems and can even develop sales at those times.
References
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Bogomolova, S., Szabo, M. and Kennedy, R., 2017. Retailers’ and manufacturers’ price-promotion decisions: Intuitive or evidence-based?. Journal of Business Research, 76, pp.189-200.
Jary, M. and Wileman, A., 2016. Retail power plays: From trading to brand leadership. Springer.
Kajalo, S. and Lindblom, A., 2015. Market orientation, entrepreneurial orientation and business performance among small retailers. International Journal of Retail & Distribution Management, 43(7), pp.580-596.
Kono, T., 2016. Strategy and structure of Japanese enterprises. Routledge.
Kumar, V., Anand, A. and Song, H., 2017. Future of retailer profitability: An organizing framework. Journal of Retailing, 93(1), pp.96-119.
Scott, P., 2017. Geography and retailing. Routledge.
Sutton-Brady, C., Kamvounias, P. and Taylor, T., 2015. A model of supplier–retailer power asymmetry in the Australian retail industry. Industrial marketing management, 51, pp.122-130.
Wrigley, N. and Lowe, M., 2014. Reading retail: A geographical perspective on retailing and consumption spaces. Routledge.
Yeung, H.W.C. and Coe, N., 2015. Toward a dynamic theory of global production networks. Economic Geography, 91(1), pp.29-58.
Online
ALLIANCE EXPERTS, 2018. Japan: one of the biggest economies on the planet.(Online). Available from <https://www.allianceexperts.com/en/knowledge/countries/asia/retail-opportunities-in-japan//>. [Accessed on 24 September 2018]
Japan retail news, 2013. Is Japan still an important retail market (in Asia)? (Online). Available from <https://www.japanretailnews.com/japans-retail-market.html>. [Accessed on 24 September 2018]
KPMG, 2018. Future of retail in Australia (Online). Available from < https://home.kpmg.com/au/en/home/insights/2018/04/bernard-salt-next-5-years-retail-future-australia.html>. [Accessed on 24 September 2018]
McKinsey, Q., 2010. The new Japanese consumer(Online). Available from < https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/the-new-japanese-consumer>. [Accessed on 24 September 2018]
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