Recent retail commentary over the past two months has been dominated by doom-and-gloom headlines, and there’s no question the sector is suffering significantly from the coronavirus outbreak.
But that may be all the more reason to take a closer look at the most successful retailers in Australia, and try to determine what they’re doing right.
When JB Hi-Fi’s results were revealed last month, we all sat up and took notice. While various businesses are closing up shop or being significantly restructured in the hands of administrators or receivers – think Harris Scarfe, H&M and Bardot – JB Hi-Fi delivered sales results that eclipsed even the good performers. Again.
So, what do they continue to do that the others do not?
They say retail is detail and in the case of JB Hi-Fi, these guys are the master of every little detail – ruthlessly focussed on excellent execution and staying true to the brand’s roots. The value proposition holds firm: great brands at great prices with great in-store advice in great locations.
There really is no rocket science here, just excellently executed retailing.
As a brand, JB continues to excel in everything that is ‘personal and family entertainment’, leveraging that expertise and well-earned trust to broaden into adjacent categories. This has played out through tech-based categories and also white goods which has been further strengthened with the successful acquisition and assimilation of the Good Guys a few years ago.
Being masters in tech allows JB to surf the endless wave of our ever-growing reliance on connectivity at home, at work, at school and everywhere in between. This category also contributes enormously to one of their key success metrics which is sales per square metre while lending itself brilliantly to a growing online sales channel.
Add their ruthless focus on the cost of doing business and it’s no wonder JB continues to go from strength to strength.
It would be easy to underestimate JB’s seemingly ‘homemade’ approach to digital advertising, catalogues (yes, they still use these) and instore communications and signage, but make no mistake, it takes an astute eye to maintain this ‘local expert’ tone across such a burgeoning network of stores and a flotilla of webpages.
Paradoxically, the commitment to high-quality store sites in high traffic, high visibility locations must come with above-average cost but doing the maths equation means that their other costs are kept incredibly low.
As I said, no rocket science here, just a ruthless commitment to great brands in valued categories, in the right locations, at great prices, supported by knowledgeable staff.
It begs the question of what other brands can do to be more like JB. It’s almost a case of going back to first principles. Break down your business to the bare basics and ask yourself, are your stores in the right locations? For JB, this has meant closing several locations and opening others in the past six months. It’s not an easy decision to make but the impact to your bottom line could be dramatic.
It also pays to invest in providing class-leading customer experience. Are your staff informed about your products and do they deliver a level of service that keeps people coming back?
Also ask yourself what are you famous for? If it’s nothing, find something quickly and own it.
Otherwise you’re in a load of trouble. And if you are famous for something, ask yourself how you can leverage that strength into adjacent categories that ‘make sense’ for your customers.
Growing market share is paramount when the market is not growing and this is one tried and true way to do that.
Getting back to these brilliant retail basics can make all the difference, especially in times where consumers feel under siege to the point of being highly discerning with their discretionary dollar.
JB Hi-Fi makes it look easy but given the state of Australian retailing at present, it’s obviously hard done.