Every Thursday, our CEO Dominique Lamb, and a panel of retail experts discussed the future of Australia’s grocery industry on ABC Radio. Below are some insights from last Thursday’s discussion.
Retail Corporate Social Responsibility
Apple has been listening to feedback from their employees and is advocating for gender equality within their ranks. The company has seen a 2 per cent increase in women working for Apple, and they are trying to increase that figure even more.
Thursday 8 March was International Women’s Day and Apple announced they were hosting a corporate ‘recruitment drive’ aiming to inspire, express and celebrate female talent, and acknowledge the importance women have in the world of technology.
Dominique Lamb, CEO of NRA tells the Retail Panel that many businesses have been seeing genuine increases in profits after investing in their Corporate Social Responsibility efforts.
Retail Panel expert, Christine Moody from Brand Audits, says that young consumers today are actually researching the values of companies and buying from brands whose values align with their own. For example, millennials are avoiding cosmetics brands that use animal testing.
Women have around 84% buying power, and Dominique states that “retailers stand to benefit from supporting a cause that resonates with the demographic that shops with them”.
‘Down Down’ is Gone Gone
After seven years of supermarket ‘price wars’, Coles has made a strategic move away from price-based marketing to focus on other attributes, such as sustainability, local produce and community programs.
While operational costs (wages, rent, bills) remain fixed or go up, it is not sustainable for prices to keep going down…down. Not only can low prices cause a drop in earnings, but can damage consumer loyalty.
Associate Professor Gary Mortimer told the Retail Panel that loyalty decreases when prices are the same in every store. Consumers are realising, “Your milk is $2, and I know that all the other competitors’ milk is $2, so how are you different?”
Coles’ next move is launching a new campaign highlighting other attributes that are more meaningful to consumers, such as sourcing local and sustainable produce. (Another company working the Corporate Social Responsibility angle!)
Dominique believes the competition between Coles and Woolworths is healthy competition, saying we will have to wait and see what works, and time will tell what the next move will be.
Make way for Kaufland
Christine Moody says there is indeed room for this discounted model to enter the Australian market. The Retail Panel agrees that Aldi had paved the way for Kaufland to bring the German supermarket model to Australian shores.
Kaufland differs from other supermarkets as it is not only a discount department store, but also a discount supermarket. This means low prices, weekly specials and evolving product ranges, available all day, every day of the week.
How will Kaufland impact the Australian department store market? Time will tell.
You can listen to the Retail Panel every Thursday on ABC Radio from 5pm or listen to the podcast here!
The Retail Experts, Christine Moody from Brand Audits, Dominique Lamb from the National Retail Association and Gary Mortimer from QUT’s School of Business to discuss these issues and more on ABC Radio Drive with Steve Austin.