tag:theconversation.com,2011:/au/topics/retailing-13697/articlesretailing – The Conversation2024-03-27T12:37:18Ztag:theconversation.com,2011:article/2263762024-03-27T12:37:18Z2024-03-27T12:37:18Z‘The Amazon of Sports’ has already cornered baseball’s apparel market – and is now on the verge of subsuming baseball cards, too<figure><img src="https://images.theconversation.com/files/584187/original/file-20240325-24-8sv22l.jpg?ixlib=rb-1.1.0&rect=30%2C7%2C5073%2C3638&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The U.S. sports card industry is an estimated $12 billion market.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/group-of-young-fans-hold-up-their-topps-baseball-cards-news-photo/830913124?adppopup=true">Mark Cunningham/MLB Photos via Getty Images</a></span></figcaption></figure><p>During spring training, Major League Baseball’s official uniform supplier, Fanatics, became a focal point for all the wrong reasons. </p>
<p>After arriving in Florida and Arizona, players began to complain about the quality of their new, Fanatics-manufactured uniforms. </p>
<p>One player for the Baltimore Orioles <a href="https://www.thebaltimorebanner.com/sports/orioles-mlb/orioles-players-slam-new-mlb-jerseys-like-a-knockoff-jersey-from-tj-maxx-DEXUP34CLNFNNEW3AMES56G6U4/">groused that the new uniforms looked</a> “like a knockoff jersey from T.J. Maxx.” Others were dismayed to learn that the white pants were transparent, with seams from tucked-in jerseys – <a href="https://twitter.com/JRoc23/status/1760930264828563621">and sometimes more than just seams</a> – visible to all.</p>
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<p>The spring training uniform fiasco has led to more scrutiny for Fanatics, a company that had, until recently, been widely considered an American success story. CEO Michael Rubin, a college dropout, grew Fanatics from a ski and snowboard business into what some now call “<a href="https://theathletic.com/3998333/2022/12/14/michael-rubin-business-sportsperson/">the Amazon of Sports</a>.” </p>
<p>Thanks to its connections with the leading U.S. sports leagues, Fanatics has quickly become the dominant player in nearly every aspect of the sports licensing industry. It manufactures and sells everything from team hats and T-shirts to logo-adorned <a href="https://www.fanatics.com/nhl/new-york-rangers/auto-accessories/new-york-rangers-wincraft-chrome-colored-license-plate-frame/o-4628+t-47598504+d-64881168+f-9585632+z-9-3053713359?">license plate frames</a> and <a href="https://www.fanatics.com/mlb/boston-red-sox/lawn-and-garden/boston-red-sox-bird-house/o-3432+t-92334186+d-75002380+f-539183674+z-9-1600955566?">birdhouses</a>.</p>
<p>But uniforms are not the only aspect of Fanatics’ licensing strategy that has elicited controversy. Over the past few years, <a href="https://sportscollectorsdigest.com/news/fanatics-sports-card-rights-reaction-mlb-nba-nfl-hobby">Fanatics has undertaken an aggressive campaign</a> to acquire the exclusive rights to produce the officially licensed sports trading cards for not only MLB but also the NFL and NBA. In some cases, these deals are set to run for as long as 20 years.</p>
<p>As we explain <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4739580">in a forthcoming article</a> in the University of Illinois Law Review, Fanatics’ consolidation of the sports card industry threatens to reduce the company’s incentive to innovate or invest in trading cards, risking a stagnant future for the hobby.</p>
<h2>Pro sports get exclusive</h2>
<p>In order to produce apparel or memorabilia featuring official team logos, manufacturers must secure the legal right to use the teams’ trademarks, the intellectual property that legally protects teams’ names and emblems. </p>
<p>The companies will typically acquire these legal rights by entering into contracts, called <a href="https://www.investopedia.com/terms/l/licensing-agreement.asp">licensing agreements</a>, with a particular sports league, giving the manufacturer the right to use all league and team logos on its products.</p>
<p>Historically, U.S. sports leagues have granted multiple companies these rights.</p>
<p>In recent years, however, leagues and manufacturers have tended to favor <a href="https://www.law.cornell.edu/wex/exclusive_license">exclusive licenses</a> – agreements that ensure that only a single company will have the right to use the league’s trademarks on a particular type of product. EA Sports, for instance, has held the exclusive rights to produce NFL video games – via its Madden franchise – <a href="https://kotaku.com/remember-its-not-just-the-nfls-exclusive-license-with-5988357">for nearly 20 years</a>, giving it an effective monopoly over this product line.</p>
<p>After deciding to move into the sports trading card market, Fanatics used exclusive trademark licenses <a href="https://sportscollectorsdigest.com/news/fanatics-sports-card-rights-reaction-mlb-nba-nfl-hobby">to secure the sole rights to produce MLB, NFL and NBA cards</a> in 2021.</p>
<p>While some people may see baseball cards as mere child’s play, the U.S. sports card industry <a href="https://www.verifiedmarketresearch.com/product/sports-trading-card-market/">is estimated to be a US$12 billion market</a>. Since the COVID-19 pandemic, <a href="https://theathletic.com/3447519/2022/07/26/sports-card-baseball-market/">there’s been a surge in interest</a>. </p>
<p>Moving forward, Fanatics will have near monopoly control over a large chunk of that market.</p>
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<img alt="A young woman wearing sunglasses, an older man wearing sunglasses, and a middle-aged man." src="https://images.theconversation.com/files/584197/original/file-20240325-28-qao0hy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/584197/original/file-20240325-28-qao0hy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=426&fit=crop&dpr=1 600w, https://images.theconversation.com/files/584197/original/file-20240325-28-qao0hy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=426&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/584197/original/file-20240325-28-qao0hy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=426&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/584197/original/file-20240325-28-qao0hy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=535&fit=crop&dpr=1 754w, https://images.theconversation.com/files/584197/original/file-20240325-28-qao0hy.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=535&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/584197/original/file-20240325-28-qao0hy.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=535&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Fanatics CEO Michael Rubin, right, embraces New England Patriots owner Robert Kraft at the 2019 Fanatics Super Bowl party.</span>
<span class="attribution"><a class="source" href="https://newsroom.ap.org/detail/2019FanaticsSuperBowlParty-Arrivals/5f67df95733e4014af8a9b8d5d97a2ce/photo?Query=michael%20rubin&mediaType=photo&sortBy=arrivaldatetime:desc&dateRange=Anytime&totalCount=62&currentItemNo=34">Paul R. Giunta/Invision/AP</a></span>
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<h2>Trading card competition spurs innovation</h2>
<p>This won’t be the first time that the U.S. sports card hobby has fallen under the control of a single manufacturer. </p>
<p>Throughout the 1960s and 1970s, one of the companies recently displaced by Fanatics – the Topps Chewing Gum company – possessed largely unchallenged power over the industry.</p>
<p>Topps had acquired its monopoly in the mid-1950s after <a href="https://fanarch.com/blogs/sports-cards/is-bowman-owned-by-topps">buying out its former competitor</a>, Bowman, following a protracted legal battle. It then maintained the monopoly for decades by signing exclusive contracts with nearly every MLB player. These contracts gave Topps the sole rights to use images of the players on trading cards.</p>
<p>This lack of competition resulted in an era that featured little innovation – and, in the eyes of many collectors, uninspired offerings. Indeed, during this period, Topps would not only often rely on relatively unattractive card designs, but the company would also occasionally <a href="https://www.sportscollectorsdaily.com/woulda-coulda-shoulda-vintage-baseball-team-photos-topps-left-out/">reuse the same player photos multiple years in a row</a>.</p>
<p>The Topps monopoly was ultimately broken up by a federal court <a href="https://blogs.loc.gov/law/2019/01/baseball-card-litigation-fleer-v-topps/">in a suit filed by would-be competitor Fleer</a> under the Sherman Antitrust Act, and this decision led to a variety of new brands entering the market. </p>
<p>In addition to Fleer, the 1980s would witness the launch of a flood of new card companies, including <a href="https://www.cardboardconnection.com/donruss-baseball-card-designs-years">Donruss</a>, <a href="https://www.baseball-almanac.com/baseball_cards/baseball_card_sets.php?m=Score">Score</a> and Upper Deck. The resulting competition pushed these companies, <a href="https://books.google.com/books/about/Card_Sharks.html?id=J-_vAQAACAAJ">with Upper Deck leading the way</a>, to dramatically improve their product offerings, not only upgrading their card designs and photos, but also their printing technology and card stock.</p>
<p>Eventually, however, many card collectors became overwhelmed by the vast number of product offerings in the 1990s and early 2000s. Realizing that overproduction was dampening consumer interest, sports leagues began to grant exclusive licenses to individual card manufacturers to restrict the number of cards on the market. Topps, for instance, <a href="https://www.nytimes.com/2009/08/06/sports/baseball/06cards.html">regained its status</a> as the exclusive card manufacturer for MLB in 2009.</p>
<p>Until recently, however, different companies had held the exclusive rights to produce trading cards for the leading U.S. sports leagues, providing some degree of continued competition in the industry.</p>
<h2>Is Fanatics running afoul of antitrust law?</h2>
<p>Fanatics’ consolidation of the industry raises the specter that the hobby could once again witness the ills of monopolization in the coming years.</p>
<p>Perhaps unsurprisingly, Fanatics’ takeover of the sports card hobby <a href="https://www.cnbc.com/2023/08/07/fanatics-panini-launch-legal-battle-with-a-pair-of-lawsuits.html">is currently being challenged in court by Panini</a>, another of the companies that Fanatics supplanted.</p>
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<img alt="Yellow and sign reading 'PANINI' in front of manufacturing facilities." src="https://images.theconversation.com/files/584186/original/file-20240325-18-1cecuh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/584186/original/file-20240325-18-1cecuh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/584186/original/file-20240325-18-1cecuh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/584186/original/file-20240325-18-1cecuh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/584186/original/file-20240325-18-1cecuh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/584186/original/file-20240325-18-1cecuh.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/584186/original/file-20240325-18-1cecuh.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">The Italian collectibles company Panini filed an antitrust lawsuit against Fanatics in 2023.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/this-photo-taken-on-april-20-2018-shows-the-panini-group-news-photo/950673158?adppopup=true">Marco Bertorello/AFP via Getty Images</a></span>
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<p>The lawsuit alleges that Fanatics has violated the Sherman Antitrust Act by engaging in anti-competitive practices that have ousted Panini and other competitors from the industry. </p>
<p>In this sense, Fanatics’ re-monopolization of the U.S. sports trading card business exhibits additional parallels to the earlier Topps monopoly of the 1960s and 1970s.</p>
<p>Ultimately, Panini’s case merely underlies what may actually be bigger questions about Fanatics’ business practices in general. </p>
<p>Fanatics has used exclusive license agreements – similar to those that it has executed for sports cards – to help build its dominant position in the broader sports licensing marketplace. </p>
<p>Whether these exclusive licensing agreements are legal or not remains unresolved; the permissibility of similar exclusive trademark licenses under federal antitrust law was last raised in a 2010 case before the Supreme Court in <a href="https://www.oyez.org/cases/2009/08-661">American Needle, Inc. v. National Football League</a>. </p>
<p>In that case, a former manufacturer of NFL hats sued the NFL after the league decided to grant Reebok the exclusive rights to make its team-logoed hats beginning in 2002. American Needle alleged that the decision by 32 individually owned and operated NFL franchises to collectively license their trademarks to a single manufacturer ran afoul of <a href="https://www.law.cornell.edu/wex/sherman_antitrust_act">the Sherman Antitrust Act</a>.</p>
<p>While the Supreme Court held that the NFL-Reebok deal was subject to scrutiny under antitrust law, the parties ultimately settled the case before the courts issued a final resolution regarding the legality of the NFL’s exclusive license.</p>
<p>While sports trading cards comprise a multibillion-dollar industry, they represent just a share of the larger, <a href="https://www.grandviewresearch.com/industry-analysis/licensed-sports-merchandise-market-report">$33 billion U.S. sports licensing market</a>. </p>
<p>See-through, cheap-looking baseball pants may or may not be a consequence of a lack of competition in this market.</p>
<p>But we think it’s only a matter of time before the depletion of competition for licensed sports apparel results in higher prices and less choice for fans. The same holds true for trading cards.</p><img src="https://counter.theconversation.com/content/226376/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Fanatics’ consolidation of the sports card industry risks a stagnant future for the hobby.Nathaniel Grow, Associate Professor of Business Law and Ethics, Indiana UniversityJohn Holden, Associate Professor of Management, Oklahoma State UniversityMarc Edelman, Professor of Law, Baruch College, CUNYLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/2144772023-12-26T20:29:43Z2023-12-26T20:29:43ZHow the retailing contest between CBDs, shopping centres and online will reshape our cities<figure><img src="https://images.theconversation.com/files/560940/original/file-20231122-15-dign1s.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4000%2C2652&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Paul J. Maginn/@Planographer</span></span></figcaption></figure><p>Retail activity has been a defining facet of cities since antiquity. The Greek Agora and Roman Forum may be viewed as the original CBDs – central business districts, or what urban planners call activity centres.</p>
<p>Retail spaces have <a href="https://www.routledge.com/Managing-the-Marketplace-Reinventing-Shopping-Centres-in-Post-War-Australia/Bailey/p/book/9780367500559">evolved</a> over time. Urbanisation, mass production and the rise of conspicuous consumption led to the <a href="https://www.tandfonline.com/doi/full/10.1080/00049182.2019.1682317">high street</a> and CBD dominating the retail landscape across the Western world from the late 19th century until the mid-20th century.</p>
<p>The 21st-century retail landscape has become more diverse and competitive. The range of physical and virtual retail spaces, retailers, products and prices leaves consumers spoilt for choice. </p>
<p>Retailing is more than just about consumption. It’s Australia’s fourth-largest employment sector and plays a major role in shaping our cities. Retail helps define a city’s identity and brand and thus attract visitors. But the retail landscape and consumer behaviour are changing, and changing fast!</p>
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Read more:
<a href="https://theconversation.com/what-makes-an-ideal-main-street-this-is-what-shoppers-told-us-214554">What makes an ideal main street? This is what shoppers told us</a>
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<h2>The place to be and be seen</h2>
<p>In Australia (and elsewhere), the CBD was at the epicentre of the evolution of discrete retail spaces. It offered a smorgasbord of independently owned shops, national and international chain stores and department stores. These were located in laneways, shopping arcades, main streets and multistorey shopping centres. </p>
<p>Centrality, easy public transport access and a largely suburban-based commuter workforce explain the dominance of the CBD in the 20th century. </p>
<p>A visit to the CBD on a Saturday was <a href="https://www.watoday.com.au/national/western-australia/the-karrinyup-creep-how-mega-malls-took-over-retail-and-changed-perth-20230913-p5e4do.html">more than just a utilitarian shopping trip</a>. It could be an urban exploration, a leisure pursuit, a pleasure-seeking adventure, a social event. </p>
<p>Children accompanying their parents were mesmerised by the intensity of urbanism and retail choice. Teenagers and young people, much like 19th-century <a href="https://www.theparisreview.org/blog/2013/10/17/in-praise-of-the-flaneur/">flaneurs</a>, paraded with their peers, their fashion denoting their subcultural affiliation.</p>
<p>For adults, the CBD offered a chance to indulge in retail therapy via window shopping and pleasurable consumption. For others a trip to the CBD allowed them to treat themselves and meet friends at the department store cafe. </p>
<p>In short, the CBD was the place to see and be seen.</p>
<h2>CBD’s retail crown slips</h2>
<p>The dominance of the CBD began to slip with the emergence of suburban shopping centres in the late 1950s – thank you, <a href="https://theconversation.com/triumph-of-the-mall-how-victor-gruens-grand-urban-vision-became-our-suburban-shopping-reality-172393">Victor Gruen</a>. Rapid suburban growth, social mobility and increased car use drove an explosion in suburban shopping centres from the 1960s through to the 1980s. </p>
<p>According to the <a href="https://scca.org.au/industry-information/australian-shopping-centre-industry/#:%7E:text=The%20first%20modern%20shopping%20centre,in%20a%20lake%20of%20parking%E2%80%9D.">Shopping Centre Council of Australia</a>, an average of 22 shopping centres a year have been built since the first centre, Brisbane’s Chermside, appeared in 1957.</p>
<p>Competition between CBD retailers and shopping centres intensified in the 1980s and 1990s. With the rise of online retailing in the past decade or so, these bricks-and-mortar retailers have had to lift their game again. </p>
<p>Retailing matters. Aussie consumers spent a whopping <a href="https://auspost.com.au/content/dam/auspost_corp/media/documents/ecommerce-industry-report-2023.pdf">A$353 billion on retail goods in 2022</a> compared with <a href="https://auspost.com.au/content/dam/auspost_corp/media/documents/inside-australian-online-shopping-ecommerce-report.pdf">$275.3 billion in 2018</a> – a 28.2% increase. </p>
<p>Over the same period, online retail spending increased by 132% from $27.5 billion to $63.8 billion. It now accounts for just over 18% of retail spending in Australia, up from 10% in 2018.</p>
<p>The “4 Cs” underpin the rise of online shopping: convenience, choice, competitive prices and COVID-19 (which ramped up the shift). </p>
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Read more:
<a href="https://theconversation.com/big-bigger-biggest-black-friday-cyber-monday-and-singles-day-107492">Big, bigger, biggest: Black Friday, Cyber Monday and Singles Day</a>
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<p>COVID and working from home led to Australian CBDs, especially Melbourne and Sydney, losing considerable ground, while suburban shopping centres gained in terms of shopper numbers and spending.</p>
<p>Although <a href="https://www.afr.com/policy/economy/zombified-business-districts-are-getting-their-lives-back-20210408-p57hk1">zombified CBDs</a> at the height of pandemic restrictions are in the rear-view mirror, working from home lingers. This is especially true for Melbourne where <a href="https://www.afr.com/property/commercial/only-just-over-half-of-melbourne-has-returned-to-the-office-20231121-p5elk3">office occupancy averages 53%</a> – way behind Perth (91%), Adelaide (85%), Sydney and Brisbane (both 75%).</p>
<p><a href="https://www.melbourne.vic.gov.au/about-melbourne/melbourne-is-open/Pages/covid-19-recovery.aspx#:%7E:text=Melbourne%20City%20Recovery%20Fund,-%E2%80%8BIn%20partnership&text=It%20will%20invest%20in%20programs,visitors%20back%20to%20the%20city.">Capital city councils</a>, <a href="https://www.dlgsc.wa.gov.au/funding/cbd-revitalisation-grant-program">state governments</a> and bodies such as the <a href="https://sydney.org.au/FutureSydneyCBD/findings/">Committee for Sydney</a>, <a href="https://udiavic.com.au/wp-content/uploads/2020/10/200924-Revive-Melbourne-CBD-Final.pdf">Urban Development Institute of Australia</a> and the <a href="https://www.propertycouncil.com.au/submissions/cbd-vip">Property Council of Australia</a> have taken or advocated action to draw people back to the CBD. </p>
<p>Actions include everything from free parking and public transport, <a href="https://msd.unimelb.edu.au/informal-urbanism/projects/temporary-and-tactical-urbanism">tactical urbanism</a> or temporary changes to the streetscape such as pedestrian plazas, pop-up bike lanes, and parklets, outdoor dining, public events and vouchers, through to changes in planning regulations to speed up high-density residential development.</p>
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Read more:
<a href="https://theconversation.com/how-covid-all-but-killed-the-australian-cbd-147848">How COVID all but killed the Australian CBD</a>
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<h2>Cathedrals of consumption … and then some</h2>
<p>Before and since COVID-19 major shopping centres across Australia have undergone multi-million-dollar refurbishments and redesign. They include centres in Adelaide (<a href="http://westfield.com.au/marion/">Marion</a>), Brisbane (<a href="https://www.westfield.com.au/chermside">Chermside</a>, <a href="http://pacificfair.com.au/">Pacific Fair</a>), Melbourne (<a href="https://www.chadstone.com.au/,">Chadstone</a>, <a href="http://westfield.com.au/fountaingate">Fountain Gate</a>), Perth (<a href="https://www.westfield.com.au/carousel">Carousel</a>, <a href="https://www.karrinyupcentre.com.au/">Karrinyup</a>) and Sydney (<a href="http://westfield.com.au/">Parramatta</a>, <a href="http://macquariecentre.com.au/">Macquarie Centre</a>). The centres have increased floorspace and diversified retail, entertainment and food and beverage offerings.</p>
<p>Suburban shopping centres are more than <a href="https://sk.sagepub.com/books/enchanting-a-disenchanted-world-3e">cathedrals of consumption</a>. Mega-malls such as Chadstone (215,000m²), Fountain Gate (178,000m²) and Chermside (177,000m²) <a href="https://journals.sagepub.com/doi/full/10.1177/00420980221135418">stand out as major hubs</a> of economic activity and employment, tourist attractions and social and community spaces. </p>
<p>To help secure a ready customer base, <a href="https://www.chadstone.com.au/hotel-chadstone">upmarket hotels</a> and <a href="https://www.blackburne.com.au/collection/west-village/">luxury residential developments</a> have been built, or are earmarked for development, as part of major shopping centres. Many more such <a href="https://www.forbes.com/sites/pamdanziger/2017/12/04/why-malls-should-add-residential-to-their-repurposing-plans/">residential developments</a> in Australia (and the US) are likely over the next decade or so.</p>
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Read more:
<a href="https://theconversation.com/the-suburbs-are-the-future-of-post-covid-retail-148802">The suburbs are the future of post-COVID retail</a>
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<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/565917/original/file-20231214-23-8rfikh.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/565917/original/file-20231214-23-8rfikh.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/565917/original/file-20231214-23-8rfikh.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/565917/original/file-20231214-23-8rfikh.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/565917/original/file-20231214-23-8rfikh.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/565917/original/file-20231214-23-8rfikh.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/565917/original/file-20231214-23-8rfikh.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A proposed luxury apartment development, West Village, next to Karrinyup Shopping Centre in Perth, WA.</span>
<span class="attribution"><span class="source">Paul J. Maginn/@Planographer</span></span>
</figcaption>
</figure>
<h2>Devil in the retail</h2>
<p>The competition between bricks-and-mortar retailers in CBDs, suburban shopping centres and online retailers peaks each year with the onset of Black Friday and Cyber Monday in late November, closely followed by the Christmas shopping season and New Year sales.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/really-need-those-new-shoes-why-you-might-spend-up-big-at-the-black-friday-sales-218241">Really need those new shoes? Why you might spend up big at the Black Friday sales</a>
</strong>
</em>
</p>
<hr>
<p>Whatever big changes come next – in terms of what we buy, where and how – will have implications well beyond the retail sector. The structure and function of cities, plus our relationship with the city and retail spaces, are likely to change. </p>
<p>With the rise of online shopping and on-demand delivery, can we, for example, expect to see our streets and skies soon filled with autonomous robots and drones?</p>
<p>Autonomous delivery raises major questions about retail, urban and residential design, infrastructure provision, employment, human behaviour and, ultimately, regulation. Therein lies the devil in the retail.</p><img src="https://counter.theconversation.com/content/214477/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The four Cs – convenience, choice, competitive prices and COVID-19 – will decide the retail battle and how it affects the structure and function of our cities.Paul J. Maginn, Interim Director, UWA Public Policy Institute; Associate Professor & Programme Co-ordinator (Masters of Public Policy), The University of Western AustraliaLouise Grimmer, Senior Lecturer in Retail Marketing, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1934612022-11-10T19:00:39Z2022-11-10T19:00:39Z‘A kind of meditative peace’: quiet hour shopping makes us wonder why our cities have to be so noisy<figure><img src="https://images.theconversation.com/files/493967/original/file-20221107-25-ebxjah.jpg?ixlib=rb-1.1.0&rect=371%2C1329%2C1970%2C1329&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The idea behind “quiet hour” shopping is to set aside a time each week for a retail experience that minimises noise and other sources of sensory overload. It is aimed at people who are <a href="https://www.weforum.org/agenda/2022/10/explainer-neurodivergence-mental-health/">neurodivergent</a> – an umbrella term for people with autism, ADHD and other sensory-processing conditions. </p>
<p>What began as a boutique or specialist retail strategy has become more mainstream. Major <a href="https://www.coles.com.au/about-coles/community/accessibility/quiet-hour">supermarket</a> <a href="https://www.woolworthsgroup.com.au/au/en/media/news-archive/2019/woolworths-rolls-out-quiet-hour-to-select-stores-across-australia.html">chains</a> and <a href="https://insideretail.com.au/news/westfield-tuggerah-introduces-quiet-hour-for-people-with-dementia-autism-201907">shopping centres</a> in Australia and overseas have introduced it in recent years.</p>
<p>In newly published <a href="https://journals.sagepub.com/doi/abs/10.1177/07255136221133188">research</a> we explored quiet hour as an aspect of the impacts of sound on how people experience city life. As expected, we found it did benefit people who are neurodivergent. But other people also welcomed the relief from sensory overload once they’d overcome the feeling of having wandered into an eerily quiet “post-apocalyptic scene”. </p>
<p>Our work has made us question the acceptance of urban noise and light as being part and parcel of a vibrant city.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1458706093492817923"}"></div></p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/contested-spaces-you-cant-stop-the-music-the-sounds-that-divide-shoppers-72644">Contested spaces: you can't stop the music – the sounds that divide shoppers</a>
</strong>
</em>
</p>
<hr>
<h2>What does quiet hour involve?</h2>
<p>Quiet hour is intended to make retail spaces more inclusive or sensory-friendly. Its features include retailers or mall managers agreeing to: </p>
<ul>
<li><p>switch automatic doors to open</p></li>
<li><p>pause collection of trolleys</p></li>
<li><p>turn off the PA and music</p></li>
<li><p>fix flickering lights and turn off as much lighting as practicable</p></li>
<li><p>remove scented reeds and pause automatic scent dispensers</p></li>
<li><p>switch off hand dryers </p></li>
<li><p>turn down the volume on checkout scanners.</p></li>
</ul>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1194109446164758529"}"></div></p>
<p>One of the tools we used for mapping quiet hour was a <a href="https://journals.sagepub.com/doi/abs/10.1177/07255136221133188">thematic analysis</a> of reports about it in Australian print media from 2017 to 2019. We found the following themes: </p>
<ul>
<li><p>an emphasis on the kinds of discomforts associated with retail environments</p></li>
<li><p>the importance of providing a “low-sensory environment” as a form of inclusion</p></li>
<li><p>while lighting was often mentioned, the main recurring theme was the reduction of sound. </p></li>
</ul>
<h2>Why does reducing sound matter?</h2>
<p>Sound and sensory hypersensitivity are important themes in neurodivergent people’s accounts of how they struggle with everyday experiences others take for granted. </p>
<p>Leading autism researcher and advocate Sandra Thom-Jones <a href="https://www.mup.com.au/books/growing-in-to-autism-paperback-softback">writes</a> that neurodivergents’ sensitivity to sound is complex. It’s affected by “what the sound actually is, how loud it is, whether I am expecting it, and whether I can control it”.</p>
<p>People might assume everyone has the ability to <a href="https://www.taylorfrancis.com/chapters/edit/10.4324/9780203033142-4/radio-texture-self-others1-jo-tacchi">frame which sounds are important</a> and which are “irrelevant to what we are listening to or doing”. However, the ability to single out sound sources and block out background noise is a major point of differentiation between neurotypicals and neurodivergents.</p>
<p>Thom-Jones, who received her autism diagnosis at age 52, <a href="https://www.mup.com.au/books/growing-in-to-autism-paperback-softback">reports</a> that when she is “in an environment with multiple sounds” she tends to “hear all of them”.</p>
<p>Thus, when she is catching up with a friend in a café, she may be “listening intently” to what her friend is saying but she will also be “hearing the piped music, the people talking at the next table, cars driving past, the coffee machine”. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/autistic-people-can-hear-more-than-most-which-can-be-a-strength-and-a-challenge-77039">Autistic people can hear more than most – which can be a strength and a challenge</a>
</strong>
</em>
</p>
<hr>
<figure class="align-center ">
<img alt="people sit at tables in a streetside cafe" src="https://images.theconversation.com/files/493750/original/file-20221107-23-xonvn9.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/493750/original/file-20221107-23-xonvn9.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/493750/original/file-20221107-23-xonvn9.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/493750/original/file-20221107-23-xonvn9.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/493750/original/file-20221107-23-xonvn9.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/493750/original/file-20221107-23-xonvn9.jpeg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/493750/original/file-20221107-23-xonvn9.jpeg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Not everyone loves that bustling streetside cafe – piped music, people talking, passing cars and the coffee machine all at once is too much for some.</span>
<span class="attribution"><a class="source" href="https://www.pexels.com/photo/photo-of-people-sitting-beside-glass-wall-1833320/">Lisa Fotios/Pexels</a></span>
</figcaption>
</figure>
<h2>Others welcome quiet hour too</h2>
<p>Given how neurodivergents process sound, quiet hour is likely to increase their sense of comfort in retail spaces. </p>
<p>However, quiet hour also suspends or – to use a term coined by <a href="https://www.google.com.au/books/edition/Frame_Analysis/XBpmAAAAIAAJ?hl=en">Erving Goffman</a> – “rekeys” the <a href="https://onlinelibrary.wiley.com/doi/abs/10.1002/symb.506">sensory frames</a> of all shoppers. A quiet hour could benefit lots of people who may not have a specific condition but simply prefer a quieter retail environment.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/wired-by-sound-the-long-term-impacts-of-constant-noise-11020">Wired by sound: the long-term impacts of constant noise</a>
</strong>
</em>
</p>
<hr>
<p>We found this is an under-researched area, but did find anecdotal accounts to suggest this. Take the <a href="https://thespinoff.co.nz/society/12-07-2020/the-quiet-hours-in-praise-of-supermarket-serenity">case</a> of New Zealand actress and author Michelle Langstone. </p>
<p>She reports visiting stores across Auckland and Rotorua that offer quiet-hour shopping. She stumbled upon it by “sheer luck”. At first, she admits, it felt “a bit like a post-apocalyptic scene”.</p>
<p>Once she adjusted to the unfamiliar sensory environment, she felt herself succumbing to changed supermarket routines: </p>
<blockquote>
<p>“I cruised every single [aisle], taking in the quiet for nearly 45 minutes, at the end of which I felt a kind of meditative peace come over me.” </p>
</blockquote>
<p>Langstone also <a href="https://thespinoff.co.nz/society/12-07-2020/the-quiet-hours-in-praise-of-supermarket-serenity">reports</a> avoiding impulse buying. That first time she left with “only [the] bread and eggs” she had gone to the shop for. She was able to focus on shopping rather than “multi-tasking”, and quiet hour left her with a “feeling of goodwill towards all shoppers”. </p>
<p>In other words, even if the strategy is about levelling the sensory playing field for neurodivergents, it seems to <a href="https://onlinelibrary.wiley.com/doi/full/10.1111/soin.12232">change the shopping experience</a> for other people too.</p>
<figure class="align-center ">
<img alt="stressed woman pushing a trolley in the supermarket" src="https://images.theconversation.com/files/493749/original/file-20221107-23-5fuj5u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/493749/original/file-20221107-23-5fuj5u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/493749/original/file-20221107-23-5fuj5u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/493749/original/file-20221107-23-5fuj5u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/493749/original/file-20221107-23-5fuj5u.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/493749/original/file-20221107-23-5fuj5u.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/493749/original/file-20221107-23-5fuj5u.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">In contrast to the usual stress of supermarket shopping, quiet hour left one shopper with a ‘feeling of goodwill towards all shoppers’.</span>
<span class="attribution"><span class="source">Shutterstock</span></span>
</figcaption>
</figure>
<h2>Why the bias towards the noisy city?</h2>
<p>As researchers interested in sound and space, quiet hour made us reflect on how we think about these issues and our attitudes to noise. It made us question, for example, why one of the most cited texts in our field is entitled <a href="https://www.upress.umn.edu/book-division/books/noise">Noise: The Political Economy of Music</a>? </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/let-cities-speak-what-sounds-define-us-now-76507">Let cities speak: what sounds define us now?</a>
</strong>
</em>
</p>
<hr>
<p>Studies of silence or quietude are rare in urban or spatial studies. One has to turn to fields such as the study of <a href="https://journals.sagepub.com/doi/10.1177/1466138109339041">meditation practices</a> or the silence associated with <a href="https://www.wiley.com/en-au/A+History+of+Silence:+From+the+Renaissance+to+the+Present+Day-p-9781509517350">nature or sacred spaces</a> to find positive accounts of reduced noise.</p>
<p>This needs correcting. Sound intensity matters if cities, buildings or public spaces are to foster <em>hospitality</em> and “<a href="https://www.metrolab.brussels/publications/the-qualities-of-hospitality-and-the-concept-of-inclusive-city">support people in their activities by facilitating their stay</a>”. </p>
<p>What quiet hour teaches us is that an inclusive or welcoming city is a city that “<a href="https://www.wiley.com/en-us/Resonance%3A+A+Sociology+of+Our+Relationship+to+the+World-p-9781509519927">resonates</a>” with different kinds of minds, bodies and styles of sensory processing. </p>
<p>Quiet hour might therefore be both an inclusion strategy and an experiment that forces us to think more deeply about our cities and how they sound.</p><img src="https://counter.theconversation.com/content/193461/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Quiet hour is a strategy aimed at making retail spaces more inclusive for people who struggle with sensory overload, but they’re not the only ones who welcome a pause in the assault on their senses.Eduardo de la Fuente, Adjunct Senior Lecturer, Justice and Society, UniSA, University of South AustraliaMichael James Walsh, Associate Professor in Social Sciences, University of CanberraLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1488022020-11-01T19:06:48Z2020-11-01T19:06:48ZThe suburbs are the future of post-COVID retail<p>The COVID-19 pandemic delivered a <a href="https://theconversation.com/how-covid-all-but-killed-the-australian-cbd-147848">body blow to CBD retailers</a>, but it’s just the latest of their challenges in recent years. They were already under pressure from <a href="https://www.abc.net.au/news/2020-09-03/coronavirus-recession-in-australia-six-graphs-explain/12624250">cautious consumer spending</a>, intense <a href="https://business.nab.com.au/nab-online-retail-sales-index-august-2020-42815/">competition from online retailing</a> and the growth of suburban “<a href="https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwi16pTj99XsAhUGzDgGHToVAVYQFjAAegQIAhAC&url=https%3A%2F%2Fwww.colliers.com.au%2Fdownload-research%3FitemId%3Dd1c91b17-abd7-4b03-a1d5-90874a6f38fd&usg=AOvVaw3V4dCHIa1neOszR03MtIPY">mega-centres</a>”.</p>
<p>Now, declining commuter foot traffic and an increase in people <a href="https://www.abc.net.au/news/2020-09-07/working-from-home-coronavirus-big-productivity-increase/12628764">working from home</a> present new challenges for CBD retailers. Lockdowns, changing work practices and the need for social distancing have left some of Australia’s largest city centres at times resembling <a href="https://www.theguardian.com/australia-news/gallery/2020/sep/12/melbournes-curfew-descends-and-vibrant-city-becomes-ghost-town-in-pictures">ghost towns</a>.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-covid-all-but-killed-the-australian-cbd-147848">How COVID all but killed the Australian CBD</a>
</strong>
</em>
</p>
<hr>
<p>Even as <a href="https://www.premier.vic.gov.au/statement-premier-77">restrictions lift</a> and CBDs reopen, it will not be business as normal.</p>
<h2>Stores will shrink</h2>
<p>Retailers that depend heavily on discretionary spending, for items such as <a href="https://www.afr.com/companies/retail/clothing-industry-in-decline-as-conscious-consumers-cut-back-20191014-p530ex">clothing, footwear and accessories</a>, have been hit particularly hard.</p>
<p>The latest <a href="https://www.abs.gov.au/statistics/industry/retail-and-wholesale-trade/retail-trade-australia/latest-release">Australian Bureau of Statistics figures</a> show clothing, footwear and personal accessory retailing fell 10.5% in August 2020, in seasonally adjusted terms. Department stores were down 8.9%.</p>
<figure class="align-center ">
<img alt="Chart showing changes in retail turnover" src="https://images.theconversation.com/files/366559/original/file-20201029-19-182olai.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/366559/original/file-20201029-19-182olai.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=375&fit=crop&dpr=1 600w, https://images.theconversation.com/files/366559/original/file-20201029-19-182olai.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=375&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/366559/original/file-20201029-19-182olai.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=375&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/366559/original/file-20201029-19-182olai.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=471&fit=crop&dpr=1 754w, https://images.theconversation.com/files/366559/original/file-20201029-19-182olai.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=471&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/366559/original/file-20201029-19-182olai.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=471&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://www.abs.gov.au/statistics/industry/retail-and-wholesale-trade/retail-trade-australia/latest-release">Retail Trade, Australia, ABS</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Interestingly, despite an average decline in spending of -0.2% <a href="https://www.ibisworld.com/au/industry/clothing-retailing/407/">between 2015 and 2020</a>, research by <a href="https://www.mckinsey.com/featured-insights/asia-pacific/retail-ghost-town">McKinsey in 2019</a> found clothing and footwear retailers increased their selling space by almost 2%.</p>
<p>Clothing, footwear and <a href="https://www.news.com.au/finance/business/retail/david-jones-retailer-flags-footprint-cut-possible-store-closures/news-story/48bce9366f4729595bcbf6ca52e8f5f0">department store retailers</a> are now expected to “right-size” their selling space. McKinsey <a href="https://www.mckinsey.com/featured-insights/asia-pacific/retail-ghost-town">predicts</a> a floor-space reduction of more than 10% between now and 2024.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/retail-wont-snap-back-3-reasons-why-covid-has-changed-the-way-we-shop-perhaps-forever-140628">Retail won't snap back. 3 reasons why COVID has changed the way we shop, perhaps forever</a>
</strong>
</em>
</p>
<hr>
<p>CBD-based department stores have fared worse than those in the suburbs. The <a href="http://investor.myer.com.au/FormBuilder/_Resource/_module/dGngnzELxUikQxL5gb1cgA/file/MYR_FY2020_Results_Presentation.pdf">Myer Annual Report 2020</a>, for example, highlights the impact of COVID restrictions on CBD store sales. Despite reopening all stores (except Melbourne) by <a href="https://insideretail.com.au/news/myer-to-reopen-all-stores-next-week-202005">May 27</a>, CBD store sales fell 33%, whereas suburban store sales contracted by only 9%, in the final seven weeks of the financial year. Myer <a href="http://investor.myer.com.au/FormBuilder/_Resource/_module/dGngnzELxUikQxL5gb1cgA/file/MYR_FY2020_Results_Presentation.pdf">reports</a>: “Low foot traffic in CBDs expected to continue for the foreseeable future.” </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/366566/original/file-20201029-15-1y70p76.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Chart showing Myer online, CBD and other sales" src="https://images.theconversation.com/files/366566/original/file-20201029-15-1y70p76.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/366566/original/file-20201029-15-1y70p76.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=396&fit=crop&dpr=1 600w, https://images.theconversation.com/files/366566/original/file-20201029-15-1y70p76.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=396&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/366566/original/file-20201029-15-1y70p76.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=396&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/366566/original/file-20201029-15-1y70p76.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=498&fit=crop&dpr=1 754w, https://images.theconversation.com/files/366566/original/file-20201029-15-1y70p76.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=498&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/366566/original/file-20201029-15-1y70p76.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=498&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Myer annual report shows a rise in online sales, a large fall in CBD store sales and smaller fall in other store sales compared to the same period a year earlier.</span>
<span class="attribution"><a class="source" href="http://investor.myer.com.au/FormBuilder/_Resource/_module/dGngnzELxUikQxL5gb1cgA/file/MYR_FY2020_Results_Presentation.pdf">Myer annual report 2020</a></span>
</figcaption>
</figure>
<h2>Online shopping is surging</h2>
<p>As COVID shut down cities, Australian shoppers moved online in increasing numbers. The <a href="https://business.nab.com.au/nab-online-retail-sales-index-august-2020-42815/">NAB Online Sales Index</a> estimates Australian consumers spent around $39.2 billion in the 12 months to August 2020. Online shopping now accounts for 11.5% of total retail sales in Australia. </p>
<p>Research from <a href="https://auspost.com.au/content/dam/auspost_corp/media/documents/inside-australian-online-shopping-update-sep2020.pdf">Australia Post</a> shows over 8.1 million households shopped online between March and August this year —
900,000 of them for the first time. In cities around Australia, <a href="https://www.abc.net.au/news/2020-09-11/shopping-centres-feel-the-pinch-as-retail-moves-online/12651046">foot traffic has become web traffic</a>.</p>
<p>We can clearly see the impacts of this on physical retailers. A number of <a href="https://www.businessinsider.com.au/australia-retail-collapse-2020-1">major retail chains</a> have closed, including Toys ‘R’ Us, Roger David, Esprit, Ed Harry, TopShop and GAP over the past few years.</p>
<h2>CBD workers shift away from commuting</h2>
<p>As an increasing share of people work from home and fewer commute to city centres, the long-term future of CBD retailing looks bleak because of the fall in demand.</p>
<p>This shift in behaviour is likely to be substantial, as transport expert David Hensher recently <a href="https://www.sydney.edu.au/news-opinion/news/2020/09/28/australians-want-to-work-from-home-more-post-covid.html">observed</a>:</p>
<blockquote>
<p>The evidence reinforces the fact that as we move through and beyond the COVID-19 period, we can expect commuting activity to decline by an average of 25-30% as both employers and employees see value in a work-from-home plan.</p>
</blockquote>
<p>The ongoing health and economic crisis caused by the COVID-19 pandemic and the required physical distancing measures will force many firms to <a href="https://www.oecd.org/coronavirus/policy-responses/productivity-gains-from-teleworking-in-the-post-covid-19-era-a5d52e99/">introduce telework</a> (working from home) on a large scale. </p>
<p>In Australia, it has been estimated <a href="https://theconversation.com/teleworkability-in-australia-41-of-full-time-and-35-of-part-time-jobs-can-be-done-from-home-140723">39% of all jobs in Australia</a> — 41%of full-time and almost 35% of part-time – can be done from home.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/fancy-an-e-change-how-people-are-escaping-city-congestion-and-living-costs-by-working-remotely-123165">Fancy an e-change? How people are escaping city congestion and living costs by working remotely</a>
</strong>
</em>
</p>
<hr>
<p>CBD retailing relies on workers and visitors who use public transport. An August 2020 <a href="https://www.transurban.com/content/dam/transurban-pdfs/03/Urban-Mobility-Trends-from-COVID-19.pdf">Transurban report</a> found 84% of daily train users (77% of bus users) in Melbourne said they had reduced their use. Many said they did not expect to return to daily use even after the pandemic. Similar numbers were reported in Sydney and Brisbane.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/366560/original/file-20201029-17-1u6lruv.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Chart showing current and expected public transport use" src="https://images.theconversation.com/files/366560/original/file-20201029-17-1u6lruv.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/366560/original/file-20201029-17-1u6lruv.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=379&fit=crop&dpr=1 600w, https://images.theconversation.com/files/366560/original/file-20201029-17-1u6lruv.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=379&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/366560/original/file-20201029-17-1u6lruv.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=379&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/366560/original/file-20201029-17-1u6lruv.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=476&fit=crop&dpr=1 754w, https://images.theconversation.com/files/366560/original/file-20201029-17-1u6lruv.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=476&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/366560/original/file-20201029-17-1u6lruv.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=476&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="https://www.transurban.com/content/dam/transurban-pdfs/03/Urban-Mobility-Trends-from-COVID-19.pdf">Data: Urban Mobility Trends from COVID-19, Transurban</a></span>
</figcaption>
</figure>
<p>COVID restrictions and declining commuter traffic have also had big impacts on the food and beverage market. According to IBISWorld, Australian restaurant revenue has <a href="https://www.ibisworld.com/au/industry/restaurants/2010/">fallen by 25%</a>, from almost A$20 billion in 2018-19 to just A$15 billion in 2019-20. <a href="https://www.smh.com.au/national/nsw/it-hasn-t-fallen-apart-yet-cafes-in-sydney-s-cbd-on-the-brink-of-disaster-20200320-p54cds.html">Cafe owners</a> are equally feeling the impact, with fewer commuters grabbing their morning coffee and fewer coffee meetings happening around town.</p>
<h2>Back to the future</h2>
<p>With both <a href="http://cbre.vo.llnwd.net/grgservices/secure/CBRE%20Australia%20Retail%20MarketView%20Snapshot%20Q3%202020.pdf?e=1603837660&h=07e3ae7021bad508b0f4675eaae9ad94">commercial and residential rents</a> remaining relatively stable outside CBD zones, and more people choosing to work from home, we can expect to see a growth in “<a href="https://www.warc.com/newsandopinion/news/localism-is-forecast-to-be-a-major-post-pandemic-trend/43612">localism</a>”. </p>
<p>Shopping mall owners have <a href="https://www.smh.com.au/business/companies/chadstone-set-for-685m-expansion-20191202-p53fyw.html">invested heavily</a> in refurbishing and increasing the floor space of their centres to provide retail, <a href="https://www.afr.com/property/commercial/living-centres-the-future-of-shopping-20190926-p52uzy">hospitality, entertainment, leisure and recreation</a> activities under one roof. Somewhat ironically, these refurbished malls have even <a href="https://www.mdpi.com/2071-1050/11/15/3999/pdf">appropriated design elements</a> of traditional high streets. </p>
<p>With many more people working from home during the pandemic there has been something of a retail inversion with more people <a href="https://www.smh.com.au/business/companies/neighbourhood-malls-flourish-as-shoppers-stay-local-20200723-p55eto.html">shopping locally</a>. There are clear signs of a resurgence in local shopping villages and high street retailing. There even appears to be a <a href="https://www.smh.com.au/business/small-business/spotlight-milk-bars-in-the-age-of-the-macchiato-and-smashed-avo-20190723-p529qs.html">corner store revival</a> of sorts. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/more-than-milk-and-bread-corner-store-revival-can-rebuild-neighbourhood-ties-121244">More than milk and bread: corner store revival can rebuild neighbourhood ties</a>
</strong>
</em>
</p>
<hr>
<p>CBD-based retail is at a crossroads, especially in Melbourne and Sydney. Despite restrictions being lifted, the data indicate CDBs may never return to the “bustling metropolises” they once were.</p>
<p>The precarious state of the national economy, government plans to reduce subsidy payments, more people working from home, shopping locally and online, all point to a <a href="https://thenewdaily.com.au/finance/consumer/2020/09/29/online-shopping-sales/">bumpy road ahead</a> for CBD retailers. </p>
<p>Major questions are being raised about the future character and function of the CBD and, ultimately, about the structure of Australian cities more broadly.</p><img src="https://counter.theconversation.com/content/148802/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>CBD retailers were already struggling before the pandemic. The contrast in fortunes with suburban retail activity is stark, and there are good reasons to think the shift could be permanent.Gary Mortimer, Professor of Marketing and Consumer Behaviour, Queensland University of TechnologyLouise Grimmer, Senior Lecturer in Marketing, University of TasmaniaPaul J. Maginn, Associate Professor of Urban/Regional Planning, The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1478482020-10-30T02:52:09Z2020-10-30T02:52:09ZHow COVID all but killed the Australian CBD<figure><img src="https://images.theconversation.com/files/366351/original/file-20201029-21-7yqu0k.jpg?ixlib=rb-1.1.0&rect=16%2C8%2C5348%2C3563&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>The <a href="https://www.tandfonline.com/doi/full/10.1080/02723638.2015.1075318">central business district</a> has historically been the beating heart of metropolitan regions across Australia. The polished glass and steel high-rise offices, hotels and apartment complexes stand as monuments to <a href="https://journals.sagepub.com/doi/abs/10.1068/a3720">architectural</a>, construction, engineering and, of course, economic success.</p>
<p>CBD-based workers and visitors, plus <a href="https://www.tandfonline.com/doi/full/10.1080/00049182.2016.1220901">increasing residential densities</a>, have played a major role in sustaining the diversity and vibrancy of retailing in our capital cities. The COVID-19 pandemic has changed that. The impacts on CBDs across Australia’s capital cities have been devastating. </p>
<p>We explore these impacts city by city in this article. In a second article, we consider the implications of the loss of CBD activity for our cities. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-suburbs-are-the-future-of-post-covid-retail-148802">The suburbs are the future of post-COVID retail</a>
</strong>
</em>
</p>
<hr>
<p>In urban planning terms, CBDs have long stood at the apex of the <a href="https://www.dplh.wa.gov.au/getmedia/4386f155-219a-405f-97b7-e012e4963683/SPP-4-2activity_centres_policy_2_">activity centre hierarchy</a>. They are key nodes of employment and consumption for the services, hospitality and retail sectors. Most CBD workers and shoppers travel from middle and outer suburbs.</p>
<p>Globally, however, the retail sector has experienced profound changes over the past 5-10 years. The result is so-called <a href="https://www.washingtonpost.com/business/2019/11/22/malls-are-dying-only-these-ones-have-figured-out-secrets-success-internet-age/">“dead malls” in the US</a> and the <a href="https://link.springer.com/book/10.1057%2F978-1-137-52153-8">“death” of the high street</a> in the UK. </p>
<p>In Australia, CBD-based retailing has been on life support for most of 2020. At times Australian CBDs, especially Melbourne, and some shopping centres have resembled <a href="https://thewest.com.au/news/coronavirus/coronavirus-crisis-perth-city-and-shopping-centres-a-ghost-town-ng-b881508613z">ghost towns</a>.</p>
<h2>A hollowed-out CBD</h2>
<p>Data from <a href="https://www.google.com/covid19/mobility/data_documentation.html?hl=en">Google’s Community Mobility Reports</a> provide insights into visitor trends to retail/recreation places at a range of scales – national, state and local government area. The Google data show percentage changes in visitor numbers from a <a href="https://support.google.com/covid19-mobility/answer/9824897?hl=en">baseline day</a>: “the median value from the 5-week period Jan 3 - Feb 6, 2020”.</p>
<p>For the two weeks from February 15-29, average visitor numbers to retail/recreation places across all major capital cities were above their baselines. Adelaide led the way with numbers up by 23.2%. Melbourne (8.5%) and Sydney (5.8%) were performing relatively well. Brisbane’s footfall was up by only 0.7%; below the national average of 1.3%.</p>
<p>Adelaide’s numbers were 56% and 50% above the city baseline on February 29 and March 7. Two factors explain this: the Adelaide Festival was on; and March 6-9 was a long weekend public holiday in South Australia.</p>
<p>The arrival of COVID-19 in late February and government responses had a dramatic impact on visitors to retail/recreation places across all capital cities. CBD-dominant local government areas (LGAs) – Adelaide, Melbourne, Perth and Sydney – were more badly affected than Hobart and Brisbane whose metropolitan regions are defined by a single LGA. </p>
<p>As can be seen below, visitor numbers began to decline in early March. Perth’s numbers fell by 42% on March 2. A week later, March 9, numbers in Brisbane, Melbourne and Hobart fell by 10%, 19% and 34% respectively. Sydney experienced its first double-digit decline (19%) on March 14. </p>
<p>From mid-March the numbers went into free fall across all state capitals.</p>
<iframe title="Trends in retail/recreation visitor numbers in capital cities" aria-label="Interactive line chart" id="datawrapper-chart-qPZw6" src="https://datawrapper.dwcdn.net/qPZw6/2/" scrolling="no" frameborder="0" style="border: none;" width="100%" height="600"></iframe>
<p>Nationally, retail/recreation visitors were down 76% by April 10. CBD-dominant LGAs were even more dramatically affected. Perth was down by 95%. Melbourne, Adelaide and Hobart were close behind at -93%, -92% and -90% respectively. Brisbane (down 80%) was the least affected capital city.</p>
<p>All these capitals began to experience a rebound in visitor numbers from mid-April through to late July. Brisbane led the way as numbers climbed back to their highest levels, 3% below its baseline, on July 19. Perth was 12% below baseline on the same day.</p>
<figure class="align-center ">
<img alt="Empty shop up for lease" src="https://images.theconversation.com/files/366355/original/file-20201029-15-lnpg1b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/366355/original/file-20201029-15-lnpg1b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/366355/original/file-20201029-15-lnpg1b.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/366355/original/file-20201029-15-lnpg1b.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/366355/original/file-20201029-15-lnpg1b.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/366355/original/file-20201029-15-lnpg1b.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/366355/original/file-20201029-15-lnpg1b.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Some CBD businesses, like this one in Perth, didn’t survive the plunge in visitor numbers.</span>
<span class="attribution"><span class="source">Paul Maginn</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>The return of retail/recreation visitors in Sydney has been a slow, bumpy process and lagged well behind the national trend. The city’s best visitor numbers for the April-July period were on July 4 with -32%. Sydney did not surpass these numbers until October 4 when visitors were 30% below its baseline. </p>
<p>Melbourne’s best day since its low of -95% on April 10 was June 20 when footfall was down by 53%. The second lockdown in early August sent Melbourne’s visitor numbers plummeting again, to -90% on August 22. As of October 16, the city had made a small recovery with numbers down by 85%.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/cars-rule-as-coronavirus-shakes-up-travel-trends-in-our-cities-142175">Cars rule as coronavirus shakes up travel trends in our cities</a>
</strong>
</em>
</p>
<hr>
<h2>‘Localism’ on the rise</h2>
<p>As a result of many people, <a href="https://theconversation.com/5-charts-on-how-covid-19-is-hitting-australias-young-adults-hard-147254">especially casuals</a>, losing their jobs and large numbers of office-based CBD workers <a href="http://www.roymorgan.com/findings/8451-roy-morgan-working-from-home-june-2020-202006290638">working from home</a>, the suburbs have emerged as the dominant space of retail/recreation activity in metropolitan Australia.</p>
<p>The data clearly show retail/recreation numbers in outer-suburban LGAs were much less affected than CBD-dominant LGAs. In other words, a new sense of <a href="https://insideretail.com.au/news/three-key-consumer-behaviour-shifts-that-will-come-out-of-covid-19-202006">“localism”</a> has emerged.</p>
<p>The table below provides an overview of the changes (average, median, minimum and maximum) in visitors to retail/recreation places nationally and for 30 LGAs from across the capital city metropolitan regions from February 15 to October 16.</p>
<p>Nationally, numbers were down almost 20% on average, with a low of -76% on April 10. Nineteen LGAs performed above the national average. Most of these were traditional outer-suburban LGAs in Adelaide, Perth and Sydney. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/366041/original/file-20201028-23-16ky5g.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/366041/original/file-20201028-23-16ky5g.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/366041/original/file-20201028-23-16ky5g.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=750&fit=crop&dpr=1 600w, https://images.theconversation.com/files/366041/original/file-20201028-23-16ky5g.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=750&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/366041/original/file-20201028-23-16ky5g.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=750&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/366041/original/file-20201028-23-16ky5g.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=942&fit=crop&dpr=1 754w, https://images.theconversation.com/files/366041/original/file-20201028-23-16ky5g.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=942&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/366041/original/file-20201028-23-16ky5g.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=942&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Summary of retail/recreation visitor numbers by CBD and outer-suburban LGAs (Feb 15 - Oct 16, 2020)</span>
<span class="attribution"><a class="source" href="https://www.google.com/covid19/mobility/">Data: Google COVID-19 Community Mobility Reports</a>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>Unsurprisingly, average visitor numbers in Melbourne’s outer suburban LGAs were well below the national trend. But so too were numbers for the Gold Coast (-22.45%) and Parramatta (-24.16%), Sydney’s so-called second CBD.</p>
<iframe title="Visitor trends in South-East Queensland" aria-label="Interactive line chart" id="datawrapper-chart-xjehw" src="https://datawrapper.dwcdn.net/xjehw/1/" scrolling="no" frameborder="0" style="border: none;" width="100%" height="400"></iframe>
<p>The charts below provide detailed overviews of daily trends for CBD-based and outer-suburban LGAs across Adelaide, Melbourne, Perth and Sydney.</p>
<p>Overall trends in CBD and outer-suburban LGAs across the state capitals have followed similar trajectories. However the fall in numbers has been much more severe in CBD-dominant LGAs, while recovery has been more rapid in outer suburban LGAs.</p>
<iframe title="Trends in visitor numbers: Adelaide CBD &amp; outer suburbs" aria-label="Interactive line chart" id="datawrapper-chart-sQDfK" src="https://datawrapper.dwcdn.net/sQDfK/1/" scrolling="no" frameborder="0" style="border: none;" width="100%" height="400"></iframe>
<iframe title="Trends in visitor numbers: Perth CBD &amp; outer suburbs" aria-label="Interactive line chart" id="datawrapper-chart-mmV0h" src="https://datawrapper.dwcdn.net/mmV0h/2/" scrolling="no" frameborder="0" style="border: none;" width="100%" height="400"></iframe>
<p>Perth and Adelaide have fared better than Australia’s two powerhouse CBDs – Sydney and Melbourne. This is largely due to a combination of factors including: more effective management of COVID-19; smaller and less dense populations; and fewer international and interstate visitors.</p>
<p>The rebounds in Adelaide and Perth, albeit still below baseline, and the upcoming Christmas shopping period offer a glimmer of hope for CBD retailers in Sydney and Melbourne. </p>
<iframe title="Trends in visitor numbers: Sydney CBD &amp; outer suburbs" aria-label="Interactive line chart" id="datawrapper-chart-fZPto" src="https://datawrapper.dwcdn.net/fZPto/1/" scrolling="no" frameborder="0" style="border: none;" width="100%" height="400"></iframe>
<iframe title="Trends in visitor numbers: Melbourne CBD &amp; outer suburbs" aria-label="Interactive line chart" id="datawrapper-chart-7NBF0" src="https://datawrapper.dwcdn.net/7NBF0/3/" scrolling="no" frameborder="0" style="border: none;" width="100%" height="400"></iframe>
<p>Now that the hard lockdown in Melbourne has ended, we are likely to see an immediate rebound in visitor numbers. However, given how low numbers have fallen, a return to “normality” – a dominant CBD – seems a long way off.</p>
<p>CBD retailers will likely continue to endure the legacy impacts of COVID-19 when this pandemic eventually passes. And they face wider structural challenges from within the wider retail sector, which we discuss in our second article.</p><img src="https://counter.theconversation.com/content/147848/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>City by city, the data on CBD visitors vary with the severity of COVID-19 outbreaks and restrictions. But none of the CBDs has recovered former activity levels, and some might never fully recover.Paul J. Maginn, Associate Professor of Urban/Regional Planning, The University of Western AustraliaGary Mortimer, Professor of Marketing and Consumer Behaviour, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1246132019-10-02T19:41:38Z2019-10-02T19:41:38Z3 reasons Forever 21’s bankruptcy doesn’t spell the end of brick-and-mortar retailing<figure><img src="https://images.theconversation.com/files/295287/original/file-20191002-49369-1v5cuvy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Clothing racks won’t be going away anytime soon.</span> <span class="attribution"><span class="source">AP Photo/Wilfredo Lee</span></span></figcaption></figure><p>Affordable fashion brand Forever 21’s <a href="https://www.nytimes.com/2019/09/29/business/forever-21-bankruptcy.html">decision to file for bankruptcy</a> and shutter hundreds of its stores has resurrected the notion that online retailing is killing old-fashioned brick and mortar retailing.</p>
<p><a href="https://www.thestreet.com/video/forever-21-bankruptcy-signaling-death-of-mall-retail--15109130">Some</a> are <a href="https://thestatetimes.com/2019/09/13/the-death-of-retail-forever-21-petitions-for-bankruptcy/">suggesting</a> the <a href="https://www.ipc.be/services/markets-and-regulations/e-commerce-market-insights/e-commerce-articles/global-ecommerce-figures-2017">strong growth of e-commerce</a> – coupled with <a href="https://www.digitalcommerce360.com/article/e-commerce-sales-retail-sales-ten-year-review/">slow sales at physical stores</a> – <a href="https://www.crainsdetroit.com/retail/forever-21-files-bankruptcy-adding-retail-apocalypse">portends the doom</a> of traditional retailing. <a href="https://dailyreporter.com/2019/02/09/hardware-store-closing-displays-small-town-retail-struggles/">No more mom and pop hardware stores</a>, <a href="https://slate.com/culture/2006/05/the-death-of-the-independent-bookstore.html">no more independent bookstores</a>, <a href="https://time.com/4865957/death-and-life-shopping-mall/">no more shopping malls</a>. </p>
<p>Since 2004, I have studied the <a href="https://scholar.google.com/citations?user=Kl7wt_kAAAAJ&hl=en">economics of retailing</a>, from big-box retailing to online shopping platforms. I believe there are limits to what e-commerce can upend. Here are three advantages physical stores still have over their online-only rivals.</p>
<h2>Scratch and sniff</h2>
<p>Even with the promise of same-day delivery, e-tailers like Amazon <a href="https://www.latimes.com/business/la-fi-same-day-delivery-20171218-story.html">will never be able to deliver fast enough</a> or satisfy many consumer needs.</p>
<p>Need a battery for your child’s new toy? A shot of caffeine? Convenience stores always seem to be either around the corner from home or along the interstate. As such, they are strategically located in places where consumers want to take immediate possession. For evidence, look no further than the <a href="https://cstoredecisions.com/2018/10/12/positioning-7-eleven-for-the-future/">strategy of 7-Eleven</a>, which has been expanding and opening new stores, particularly in urban areas where there is more foot traffic and on-the-go consumers. </p>
<p>Remember Peapod.com? Online food and beverage sales have been around since the early 2000s, yet <a href="https://content-na1.emarketer.com/grocery-ecommerce-2019">Americans still buy 98% of their groceries offline</a>. One way to explain this is that <a href="https://content-na1.emarketer.com/consumers-remain-skeptical-about-ordering-fresh-and-frozen-food-online">there is simply no substitute</a> for physically inspecting the produce or trusting that the refrigerated products will arrive unspoiled.</p>
<p>More broadly, consumers often want to touch, feel or try a product before making a purchase. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/295307/original/file-20191002-49397-156m45a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/295307/original/file-20191002-49397-156m45a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/295307/original/file-20191002-49397-156m45a.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/295307/original/file-20191002-49397-156m45a.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/295307/original/file-20191002-49397-156m45a.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/295307/original/file-20191002-49397-156m45a.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/295307/original/file-20191002-49397-156m45a.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Nordstrom’s latest stores are more for show than sales.</span>
<span class="attribution"><span class="source">AP Photo/Richard Drew</span></span>
</figcaption>
</figure>
<h2>Best of both worlds</h2>
<p>In some ways, the same can be said for apparel. It is hard for many of us to know whether we like a new pair of pants or blouse until we’ve tried it on. </p>
<p>But unlike the grocery business, this is an area where online retailers have a distinct advantage because they’ve made it easy for consumers to order a shirt off the internet, try it at home and then send it back if it’s not quite right. </p>
<p>That’s why online apparel sales are surging and <a href="https://www.digitalcommerce360.com/article/online-apparel-sales-us/">made up more than a third</a> of all clothing sold in the U.S. in 2018. It’s not just online-only retailers that are cashing in, however. </p>
<p>Traditional brands like Banana Republic, J. Crew and Uniqlo have been successful at <a href="https://www.doi.org/10.1509/jmr.14.0518">incorporating an online presence</a> with their physical stores. An advantage they have over newer online brands is that consumers already know and trust them. The combination allows the customers to view and inspect new seasonal products in the store and follow up with online purchases. </p>
<p>A related trend in upscale apparel retailing is the store with no inventory. Department store chain Nordstrom, for example, created a line of “<a href="https://shop.nordstrom.com/store-details/nordstrom-local-brentwood">showroom stores</a>” that focus on providing patrons with fashion advice, store pickup and even help with dry cleaning. For Nordstrom, the abundance of online competitors <a href="https://www.washingtonpost.com/news/morning-mix/wp/2017/09/12/nordstroms-wild-new-concept-a-clothing-store-with-no-clothes/">is seen as a competitive advantage</a> because many consumers are looking for a respite from the overwhelming number of fashion choices out there.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/295310/original/file-20191002-49350-1adcgle.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/295310/original/file-20191002-49350-1adcgle.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/295310/original/file-20191002-49350-1adcgle.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/295310/original/file-20191002-49350-1adcgle.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/295310/original/file-20191002-49350-1adcgle.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/295310/original/file-20191002-49350-1adcgle.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/295310/original/file-20191002-49350-1adcgle.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The traditional, indoor shopping mall is known for its soaring atrium and sprawling floor plan.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/kishjar/9719921230/in/photolist-p72jki-dDEc2q-dLK3mB-nxjJhQ-nMgvwH-56ZF2A-65Ggv3-emCq5B-fNV8WN-8QXWWX-aqC9XM-hNPBxS-ccqFXq-nwWEg1-729tmu-r47F4g-qtTJLd-4LqGp5-5Dxv3u-9xWZZm-8E9ZSU-cik6tw-5eq35N-71aCKM-4YPdcK-e3jHpV-noqQjH-utq3c-dZRVQg-qiwLTy-3aoarp-kyeyW4-kFCW5v-dXFscJ-bCiRmA-9xvCRo-dPUbNu-pL1ZNe-gVrMjo-5XPJW1-8ofESZ-cH4joh-jNDEQV-nfHEbd-bGchUi-5Nh2P-cG3YFW-piKWHt-a1b3QT-st1Xi">kishjar?/Flickr.com</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>Socializing at the mall</h2>
<p>The outlook for the traditional shopping mall, however, remains bleak. </p>
<p>Vacancy rates at regional shopping centers <a href="https://www.reuters.com/article/us-usa-property-retail/us-retail-vacancy-rates-down-marginally-in-second-quarter-reis-idUSKCN1TY0CC">reached 9.3%</a> earlier this year, the highest rate in <a href="https://www.calculatedriskblog.com/2018/03/">about eight years</a>. Analysts expect <a href="http://time.com/4865957/death-and-life-shopping-mall/">one out of four malls to close</a> by 2022. </p>
<p>But just because people are buying more stuff online doesn’t mean they don’t enjoy the social experience of shopping at a mall. And this is an area where e-commerce can’t compete. </p>
<p>To exploit this advantage, today’s most profitable malls <a href="https://theconversation.com/lifestyle-centers-reinvented-communities-or-dressed-up-shopping-malls-36752">have rebranded themselves</a> as “lifestyle centers” in order to convey that they are places to experience a part of life – not just to buy things. </p>
<p><a href="https://www.forbes.com/sites/samanthasharf/2018/10/11/the-walt-disney-of-retail-meet-the-billionaire-building-the-malls-of-the-future-1/#4614e11330fc">An early visionary of this trend was The Grove in Los Angeles</a>, currently one of the most profitable malls in the country. It <a href="https://fortune.com/2014/10/29/malls-that-make-the-most/">was built in the 2000s</a> just as e-commerce was picking up speed, and has thrived even as online retail has dominated. </p>
<p>The flipside of the lifestyle center is the outlet mall, which sells brand-name fashion at deep discounts. Their <a href="https://www.wsj.com/articles/surprise-outlet-malls-are-hot-1490094007">occupancy rate</a> is about 98%. Since they’re often located far from the city, branded manufacturers can set “deals” for bargain hunters without harming their cachet at urban, flagship locations.</p>
<h2>Survival instincts</h2>
<p>There is no doubt that online shopping is convenient. But these retail trends show that there are factors other than convenience that drive consumer choices.</p>
<p>For Forever 21, it probably came down to the simple fact that fashion trend cycles can be cruel – especially to brands targeting mall-strolling teens. The retailer did the best it could blending bricks and online, but it clearly wasn’t enough. </p>
<p>While some traditional retailers will survive the “retail apocalypse,” many will not.</p>
<p>[ <em>You’re smart and curious about the world. So are The Conversation’s authors and editors.</em> <a href="https://theconversation.com/us/newsletters?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=youresmart">You can read us daily by subscribing to our newsletter</a>. ]</p><img src="https://counter.theconversation.com/content/124613/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anthony Dukes receives funding from the Marketing Science Institute. </span></em></p>A retail expert explains why brick-and-mortar brands will continue to thrive in the age of e-commerce.Anthony Dukes, Professor of Marketing, University of Southern CaliforniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1226402019-09-15T20:17:14Z2019-09-15T20:17:14ZA loaf of bread and a packet of pills: how supermarket pharmacies could change the way we shop<figure><img src="https://images.theconversation.com/files/292337/original/file-20190913-190026-w27h4g.jpg?ixlib=rb-1.1.0&rect=7%2C14%2C991%2C651&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Supermarket pharmacies have been around in the US, UK and mainland Europe for years. But will Australia follow?</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/shopping-basket-pills-concept-buying-drugs-1289871286?src=-1-2">from www.shutterstock.com</a></span></figcaption></figure><p>On the way home, you wander into the supermarket for a loaf of bread. But before you reach the bread aisle, you drop in your prescription at the supermarket pharmacy. Shopping done, you pick up your pills on the way out.</p>
<p>Across the US, UK and mainland Europe, supermarket pharmacies are becoming the norm. But in Australia, they’re banned.</p>
<p>The Commonwealth government is negotiating the <a href="https://www1.health.gov.au/internet/main/publishing.nsf/Content/New-7th-Community-Pharmacy-Agreement">seventh Community Pharmacy Agreement</a> with pharmacists, which outlines how community pharmacy is delivered over the next five years, who delivers it and where.</p>
<p>So could pharmacies in supermarkets be an option for Australia?</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/explainer-what-is-the-community-pharmacy-agreement-38789">Explainer: what is the Community Pharmacy Agreement?</a>
</strong>
</em>
</p>
<hr>
<h2>How common are they?</h2>
<p>Overseas, pharmacies have been in supermarkets for decades. In the UK, supermarkets like <a href="https://www.asda.com/about/instore/pharmacy">ASDA</a>, <a href="https://assets.publishing.service.gov.uk/media/56e1a52d40f0b6037900001d/Tesco_hearing_summary.pdf">Tesco</a>, <a href="https://my.morrisons.com/help/information/store-services/pharmacy/">Morrisons</a> and <a href="https://www.sainsburys.co.uk/webapp/wcs/stores/servlet/gb/groceries/get-ideas/our-instore-services/--sainsburys-pharmacy?storeId=10151&langId=44&krypto=3Yh4GQ%2BNdq51nNqI8mxTmkZXe9Ggb9L33GTajzfwdGXhiQftJrJArZAib4hw%2Bs8JTxwLH2HfrQCChmYTBIAbS7BEz2U5FalmUXfV%2FK4wt6OhdFjJrMlhiZMBhuu2s45yNiOQDTkMs%2BONJUT5MWYlSGhWL5pH5YQM9gRqD0wFloM%3D&ddkey=https%3Agb%2Fgroceries%2Fget-ideas%2Four-instore-services%2F--sainsburys-pharmacy">Sainsbury’s</a> have them. And so do <a href="https://www.walmart.com/cp/pharmacy-services/1088604">Walmart</a>, <a href="https://www.kroger.com/topic/pharmacy">Kroger</a> and <a href="http://www.publix.com/pharmacy-wellness/pharmacy/pharmacy-services">Publix</a> in the US.</p>
<p>Canada’s largest supermarket Loblaw <a href="https://www.thestar.com/business/2010/05/04/loblaw_plans_drugstore_expansion.html">announced plans</a> in 2010 to expand more aggressively into the pharmacy business. It later bought pharmacy chain <a href="https://www.newswire.ca/news-releases/loblaw-companies-limited-completes-acquisition-of-shoppers-drug-mart-corporation-514006661.html">Shoppers Drug Mart</a>.</p>
<h2>Arguments against</h2>
<p>The <a href="https://www.guild.org.au/__data/assets/pdf_file/0022/5386/supermarket-pharmacies.pdf">Pharmacy Guild of Australia argues</a> pharmacies in supermarkets means community pharmacies would be unable to compete, supermarkets would put shareholders’ interests ahead of patients, and consumer protection would be lost. Such critics argue supermarkets would push smaller players out of the market, limiting consumer choice and access. </p>
<p>The Guild also suggests it would be hypocritical for supermarkets to run pharmacies when <a href="https://www.guild.org.au/news-events/news/2013/12/19/supermarkets-and-health-care-don-t-mix">they rely on</a> cigarette and alcohol sales.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/relaxing-pharmacy-ownership-rules-could-result-in-more-chemist-chains-and-poorer-care-122628">Relaxing pharmacy ownership rules could result in more chemist chains and poorer care</a>
</strong>
</em>
</p>
<hr>
<p>Overseas, there is public support for small, independently run community pharmacies over supermarket-owned ones.</p>
<p>For instance, in 2013 <a href="https://www.cheshire-live.co.uk/news/chester-cheshire-news/residents-rallied-behind-helsby-pharmacy-5191264">almost 2,000 people petitioned against</a> supermarket giant Tesco, fearing an existing pharmacy across the road would be “bulldozed” out of business.</p>
<h2>Arguments for</h2>
<p>The main arguments for pharmacies in supermarkets seem to be they would offer the public a <a href="https://www.retailwire.com/discussion/would-you-go-to-walmart-to-see-a-doctor/">cheaper and more convenient service</a>.</p>
<p>For instance, <a href="https://corporate.walmart.com/newsroom/2005/01/04/wal-mart-unveils-24-hour-pharmacies">Walmart</a> employs more than 10,000 pharmacists across 3,000 retail pharmacies throughout the US and launched a 24 hour pharmacy service over a decade ago. Then it began dispensing generic medications for as <a href="https://corporate.walmart.com/newsroom/2006/09/20/wal-mart-cuts-generic-prescription-medicines-to-4">little as US$4</a>.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/is-pharmacy-the-final-frontier-for-supermarkets-5919">Is pharmacy the final frontier for supermarkets? </a>
</strong>
</em>
</p>
<hr>
<p>Supermarkets also seem committed to supporting pharmacies in store, despite tough times. In 2019, Tesco, which runs 300 in-store pharmacies, <a href="https://www.chemistanddruggist.co.uk/news/tesco-pharmacy-staff-9000-job-cuts">reported</a> no pharmacy staff positions would be lost when 9,000 store positions became redundant.</p>
<p>There are also <a href="https://www.news.com.au/finance/business/retail/a-chemist-can-own-a-supermarket-but-supermarkets-cant-own-a-pharmacy/news-story/fe97c42c3d2b55bbb613559cbf194cc1">claims of hypocrisy</a>. Why does existing Australian legislation prevent a supermarket from owning a pharmacy, but not a pharmacy from owning a supermarket?</p>
<h2>What might work in Australia?</h2>
<p>If Australia follows international trends, we might consider two models:</p>
<ul>
<li>straight-out ownership, where a supermarket owns a chain of pharmacies and employs pharmacists to run them, or </li>
<li>a strategic alliance, where a pharmacy chain, like Chemist Warehouse, has smaller versions of its stores inside a supermarket. </li>
</ul>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/292346/original/file-20190913-35596-1bt65lt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/292346/original/file-20190913-35596-1bt65lt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/292346/original/file-20190913-35596-1bt65lt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/292346/original/file-20190913-35596-1bt65lt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/292346/original/file-20190913-35596-1bt65lt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/292346/original/file-20190913-35596-1bt65lt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1130&fit=crop&dpr=1 754w, https://images.theconversation.com/files/292346/original/file-20190913-35596-1bt65lt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1130&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/292346/original/file-20190913-35596-1bt65lt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1130&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">In-store pharmacies might be convenient, but is that enough to convince policy makers they’re right for Australia?</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/pharmacy-pickup-area-237587">from www.shutterstock.com</a></span>
</figcaption>
</figure>
<p>Examples of straight-out ownership include Sainsbury’s in the UK and Walmart in the US. This arrangement allows them to sell these assets at a later stage. </p>
<p>This is what happened with Sainsbury’s, which <a href="https://www.theguardian.com/business/2015/jul/29/sainsburys-sells-pharmacy-business-celesio-125m">sold its 281-store pharmacy business</a> to Celesio, the owner of the Lloyds Pharmacy chain, for £125m in 2015. Sainsbury’s indicated the move would enable further growth, while extending their pharmacy services to customers.</p>
<p>In an example of a strategic alliance, UK pharmacy chain Boots and supermarket Waitrose <a href="https://www.campaignlive.co.uk/article/experts-weigh-marketing-benefits-waitrose-boot-tie-up/941645?src_site=brandrepublic">agreed in 2009 to stock each other’s products</a>. </p>
<p><a href="https://www.boots.com/stores/6313-lichfield-waitrse-ws13-6rx">Boots supplied</a> health care, pharmaceutical products and services, like flu jabs and medical check-ups to Waitrose, and Waitrose supplied food to Boots. Pharmacies in 13 Waitrose stores were also re-branded “Boots Pharmacy”.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/why-australian-supermarkets-continue-to-look-to-the-uk-for-leadership-71562">Why Australian supermarkets continue to look to the UK for leadership</a>
</strong>
</em>
</p>
<hr>
<p>However, existing legislation prevents either option in Australia unless changes are made in the new Community Pharmacy Agreement. This is because <a href="https://www.guild.org.au/news-events/news/forefront/v08n16/ownership-a-foundation-stone">current pharmacy ownership rules</a> prevent supermarkets or anyone (other than a pharmacist) from owning a pharmacy.</p>
<p>If ownership rules were lifted, but <a href="https://www1.health.gov.au/internet/main/publishing.nsf/Content/DDB409EBB18FCE8FCA257BF0001D3C0C/$File/Pharmacy%20Location%20Rules%20Applicants%20Handbook%20December%202018.pdf">location</a> rules remained, supermarkets would be prevented from operating pharmacies opening within 1.5km of one another. </p>
<p>This means if Coles had an in-store pharmacy, then Woolworths across the road, could not operate one, and vice versa. And if there was already a pharmacy in the neighbourhood, neither could open one, even if ownership rules were relaxed. </p>
<h2>Are we set for regulation or liberalisation?</h2>
<p>The <a href="https://www.guild.org.au/">Pharmacy Guild of Australia</a>, which represents owners of community pharmacies, and the <a href="https://www.psa.org.au/">Pharmaceutical Society of Australia</a>, which represents individual pharmacists, both support current ownership rules — strong regulation over ownership and location.</p>
<p>However, pharmacy giant Chemist Warehouse and Ramsay Health Care (which owns pharmacies as well as private hospitals), <a href="http://competitionpolicyreview.gov.au/files/2015/03/Competition-policy-review-report_online.pdf">say</a> ownership rules are redundant and ineffective. And they’re not alone.</p>
<p>Critics of the current Community Pharmacy Agreement <a href="https://grattan.edu.au/wp-content/uploads/2018/05/208-2016-09-23-grattan-institute-submission.pdf">argue</a> over-regulation of pharmacies, particularly surrounding ownership and location, limits competition and growth.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/the-right-prescription-pharmacy-sector-in-dire-need-of-reform-39642">The right prescription: pharmacy sector in dire need of reform</a>
</strong>
</em>
</p>
<hr>
<p>And in 2015 the <a href="http://competitionpolicyreview.gov.au/final-report/">Harper Report</a> into competition policy recommended:</p>
<blockquote>
<p>[…] pharmacy ownership and location rules should be removed in the long-term interests of consumers. They should be replaced with regulations to ensure access to medicines and quality of advice regarding their use that do not unduly restrict competition.</p>
</blockquote>
<p>European countries seem to be moving towards deregulation. In 2017 Italy <a href="https://www.hlregulation.com/2017/08/02/italy-opens-the-door-to-corporate-ownership-of-pharmacies-a-revolution-for-the-italian-pharma-distribution/">passed legislation</a> to allow corporate entities to own a pharmacy business, and also increased the number of pharmacies a proprietor may own.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/292339/original/file-20190913-190044-1tczc4s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/292339/original/file-20190913-190044-1tczc4s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/292339/original/file-20190913-190044-1tczc4s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/292339/original/file-20190913-190044-1tczc4s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/292339/original/file-20190913-190044-1tczc4s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/292339/original/file-20190913-190044-1tczc4s.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/292339/original/file-20190913-190044-1tczc4s.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/292339/original/file-20190913-190044-1tczc4s.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">In the US, in-store pharmacies in supermarkets are common, convenient and can offer cheaper products. But current Australian pharmacy ownership rules ban them.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/shopping-basket-pills-concept-buying-drugs-1289871286?src=-1-2">from www.shutterstock.com</a></span>
</figcaption>
</figure>
<p>So what are the impacts of deregulation? If we look at <a href="https://www.sciencedirect.com/science/article/abs/pii/S0168851009002875">evidence</a> from Europe, when the UK relaxed ownership and location rules, pharmacies operated more efficiently. Pharmacies also had more freedom to set prices for over-the-counter products and offered a wider range of services. </p>
<p>Yet, the same research also found where there was stronger regulation, such as in Spain, consumer access to pharmacy improved, as new pharmacies were opened based on geographic, demographic or needs-based criteria. Simply, if there was already one pharmacy servicing a neighbourhood, they didn’t need another.</p>
<h2>Is Australia likely to see supermarket pharmacies?</h2>
<p>Whether Australia is likely to see supermarket pharmacies any time soon is open to debate. </p>
<p>In a speech to the Pharmacy Guild’s national conference in 2019, federal health minister Greg Hunt <a href="https://www.guild.org.au/news-events/news/2019/minister-hunt-delivers-support-for-community-pharmacy">said</a> there would be no change to the ban on locating pharmacies within supermarkets.</p>
<p>However, other powerful groups are calling for change. These include the <a href="https://ama.com.au/media/new-working-group-look-pharmacy-agreement">Australian Medical Association</a>, which wants the regulations changed to allow broader ownership of pharmacy businesses.</p>
<p>If supermarkets were to guarantee <a href="https://www1.health.gov.au/internet/main/publishing.nsf/Content/New-7th-Community-Pharmacy-Agreement">sufficient controls</a> — such as to ensure the safe use of medicines, staff were properly trained and there were safeguards to ensure equitable access for elderly patients, Aboriginal and Torres Strait Islander people, particularly people living in rural and remote areas — it would be hard to argue for existing rules about pharmacy ownership and location.</p>
<hr>
<p><em>Update (Sep 20, 2019): The lead author’s disclosure statement has been updated to reflect his past research in the pharmacy and supermarket sectors, as well as his past employment.</em></p><img src="https://counter.theconversation.com/content/122640/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gary Mortimer has conducted and published research in the pharmacy and supermarkets sectors, and for the National Retail Association. Before his academic appointment, he was employed for more than 25 years in the retail sector. His consumer behaviour research spans retail channels including supermarkets, pharmacy and off-price retailers.</span></em></p><p class="fine-print"><em><span>Louise Grimmer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>If Australia follows international trends and allows supermarkets to open pharmacies, what are the effects on neighbouring pharmacies? And when does running a business mean health care suffers?Gary Mortimer, Professor of Marketing and Consumer Behaviour, Queensland University of TechnologyLouise Grimmer, Lecturer in Retail Marketing, Tasmanian School of Business and Economics, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1224502019-08-27T20:11:13Z2019-08-27T20:11:13ZWhy BP is getting into bed with David Jones. The promising marriage of petrol and gourmet food<figure><img src="https://images.theconversation.com/files/289537/original/file-20190827-8880-1nxj8h5.jpg?ixlib=rb-1.1.0&rect=472%2C99%2C1698%2C802&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">It's unlikely, but for both David Jones and BP, gourmet food with petrol is the next logical step.</span> <span class="attribution"><span class="source">David Jones</span></span></figcaption></figure><p>“Fill ’er up?” </p>
<p>That was the immediate greeting from the driveway attendant when pulling into the service station in the days <a href="https://www.adelaidenow.com.au/news/south-australia/bob-byrne-laments-the-passing-of-fullservice-service-stations/news-story/40a7abd7824ce75574fae94fedb2af53">before self-serve pumps</a>.</p>
<p>Yes, once there was someone to pump your fuel and check your oil and water. </p>
<p>The colloquially named “<a href="https://www.harpercollins.com.au/9780732292102/servo-great-australian-service-stations">servo</a>” actually provided service. </p>
<p>Then, in order to reduce operational costs and remain competitive, they became “self-service” – you pumped your own fuel, pumped your own tyres, and didn’t dare ask for mechanical assistance.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/289581/original/file-20190827-184207-1qfy274.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/289581/original/file-20190827-184207-1qfy274.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/289581/original/file-20190827-184207-1qfy274.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=338&fit=crop&dpr=1 600w, https://images.theconversation.com/files/289581/original/file-20190827-184207-1qfy274.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=338&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/289581/original/file-20190827-184207-1qfy274.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=338&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/289581/original/file-20190827-184207-1qfy274.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=424&fit=crop&dpr=1 754w, https://images.theconversation.com/files/289581/original/file-20190827-184207-1qfy274.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=424&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/289581/original/file-20190827-184207-1qfy274.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=424&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">An attendant pumps petrol at Griffin’s Garage at Victor Harbor, South Australia circa 1921.</span>
<span class="attribution"><span class="source">RAA</span></span>
</figcaption>
</figure>
<p>Today’s announcement that <a href="http://www.medianet.com.au/releases/178660/">David Jones and BP are joining forces</a> to “create all-new centres of convenience” appears to mean servos are getting back into service, taking the focus off fuel prices and putting it back onto customer experience. </p>
<h2>DJs loves food</h2>
<p>David Jones has long held <a href="https://www.davidjones.com/food">food ambitions</a>. </p>
<p>Back in 2015, the new South African owner of David Jones, Woolworths Holdings (which shouldn’t be confused with Australia’s Woolworths) asked South African retailing veteran <a href="https://www.smh.com.au/business/companies/woolworths-vs-woolworths-djs-new-owner-to-overhaul-food-business-20150624-ghwgqo.html">Pieter de Wet</a> to overhaul its food business. </p>
<p>At first he rolled out “Food Stores”, similar to British retailer Marks & Spencers “<a href="https://www.bbc.com/news/business-47602566">Food Halls</a>”, inside existing David Jones stores. Then earlier this year, he launched DJ’s first <a href="https://www.insideretail.com.au/news/david-jones-to-open-first-standalone-food-store-201801">stand-alone food store</a> in Melbourne’s South Yarra.</p>
<p>Moving into fuel and convenience is a logical, although risky, move. Two service station chains have moved first.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/david-jones-seeks-to-exploit-top-end-gap-in-australian-grocery-43829">David Jones seeks to exploit top end gap in Australian grocery</a>
</strong>
</em>
</p>
<hr>
<p>Rather than competing only on fuel prices or 4 cent discounts, they are competing on “customer experience”. Stay a little longer, charge your phone and deal with some important emails. Have a barista-made espresso, or a Boost Juice. Grab a <a href="https://youfoodz.com/">YouFoodz</a> meal to take home for dinner. </p>
<h2>Service stations are rediscovering service</h2>
<p>When Singapore-based multinational <a href="https://www.pumaenergy.com/en/where-we-operate/middle-east-asia-pacific/australia/">Puma Energy</a> entered Australia’s petrol market in 2013, it acquired Ausfuel Gull, Matilda, Neumann and Central Combined Group, making it Australia’s largest fuel retailer outside the big four; Caltex, BP, Shell and Mobil.</p>
<p>In 2016 it began installing <a href="https://www.pumaenergy.com.au/news-media/news/baguette-and-brazilian-beans-hit-the-menu-at-your-local-servo/">7th Street</a> artisan café and convenience stores in its service stations, offering barista-made coffee, fresh baguettes, free Wi-Fi and phone recharging stations.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/289586/original/file-20190827-184217-1edtybw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/289586/original/file-20190827-184217-1edtybw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/289586/original/file-20190827-184217-1edtybw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=350&fit=crop&dpr=1 600w, https://images.theconversation.com/files/289586/original/file-20190827-184217-1edtybw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=350&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/289586/original/file-20190827-184217-1edtybw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=350&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/289586/original/file-20190827-184217-1edtybw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=440&fit=crop&dpr=1 754w, https://images.theconversation.com/files/289586/original/file-20190827-184217-1edtybw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=440&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/289586/original/file-20190827-184217-1edtybw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=440&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Puma Energy</span></span>
</figcaption>
</figure>
<p>Then, in 2017, Caltex also opened its first <a href="https://www.caltex.com.au/our-company/media-releases/a-fresh-take-on-fuel-and-convenience-arrives-in-sydneys-inner-west">Foodary</a>, offering “breakfast, lunch and dinner options to go, locally roasted barista-made coffee and goods from local businesses”.</p>
<p>The meal kits are from <a href="https://thecornerstore.myfoodworks.com.au/">The Corner Store</a>, the baked goods from <a href="https://www.brasseriebread.com.au/">Brasserie Bread</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/289587/original/file-20190827-184202-954j30.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/289587/original/file-20190827-184202-954j30.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/289587/original/file-20190827-184202-954j30.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=367&fit=crop&dpr=1 600w, https://images.theconversation.com/files/289587/original/file-20190827-184202-954j30.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=367&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/289587/original/file-20190827-184202-954j30.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=367&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/289587/original/file-20190827-184202-954j30.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=461&fit=crop&dpr=1 754w, https://images.theconversation.com/files/289587/original/file-20190827-184202-954j30.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=461&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/289587/original/file-20190827-184202-954j30.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=461&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Caltex</span></span>
</figcaption>
</figure>
<p>The thinking is that convenience is king. </p>
<p>We are more <a href="https://www.cbre.com.au/about/media-center/time-poor-consumers-driving-shift-to-convenience-based-retail-in-major-australian-retail-markets">time poor</a> than ever, but we don’t want to scrimp on quality. </p>
<p>The same phenomenon is contributing to the growth of <a href="https://www.mckinsey.com/industries/high-tech/our-insights/the-changing-market-for-food-delivery">meal delivery services</a>. One-third of consumers are now using a restaurant or meal delivery service, and 7% get delivery <a href="https://www.nielsen.com/us/en/insights/report/2018/the-quest-for-convenience/">once a week</a>.</p>
<p>The “premiumisation” of convenient fast food is an enormous growth opportunity, with market research company <a href="https://qsrmedia.com.au/research/in-focus/exclusive-can-australian-gourmet-burger-chains-sustain-segment-growth">IbisWorld</a> forecasting revenue growth of 4.7% through 2018-19 to A$7.6 billion, something David Jones wants to grab a part of in partnership with BP.</p>
<h2>It won’t happen everywhere</h2>
<p>Don’t expect to see a David Jones infused BP service station in your own neighbourhood any time soon. </p>
<p>DJs says over the next six months they will be “<a href="https://www.afr.com/companies/retail/david-jones-food-coming-to-a-servo-near-you-20190827-p52l2t">strategically positioned</a>” in 10 key locations in Sydney and Melbourne populated by a high proportion of “busy, urban, health-conscious customers”. </p>
<p>It can be thought of as customer segmentation, this time based on <a href="https://www.emerald.com/insight/content/doi/10.1108/07363769510146787/full/html">time and income</a>.</p>
<p>It will fragment the fuel and convenience sector. At one end will be Coles Express and Caltex Starmart, offering value and low prices. At the other will be Caltex with The Foodary, Puma with 7th Street, and David Jones/BP offering “gourmet convenience”. </p>
<h2>But it might take our minds off prices</h2>
<p>Offering a premium food and customer experience will help insulate BP from the effect of <a href="https://www.accc.gov.au/media-release/weak-australian-dollar-sees-petrol-prices-at-highest-level-in-four-years">high fuel prices</a>. </p>
<p>Last week, Coles Express announced a decline of almost 70% in earnings before interest in tax. When your offer is low prices and convenience but you can’t control fuel prices, you are at risk of losing customers. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/aussie-retailers-need-to-adapt-to-a-world-built-on-speed-78184">Aussie retailers need to adapt to a world built on speed</a>
</strong>
</em>
</p>
<hr>
<p>Aiming at time-poor high income motorists offers protection. People filling up their BMW don’t care whether the price is $1.50 or $1.80 a litre. </p>
<p>Of course while there would be winners, there would also be losers, the biggest being traditional convenience stores and second tier supermarkets bearing brands such as IGA and Foodland, supplied by the listed wholesaler <a href="https://www.metcash.com/our-businesses/food/">Metcash</a>.</p>
<p>The ability to zip in, fill up and grab a quality food might become another nail in the coffin of the local convenience store.</p><img src="https://counter.theconversation.com/content/122450/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gary Mortimer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>BP is offering what David Jones wants. David Jones is offering what BP needs.Gary Mortimer, Professor of Marketing and Consumer Behaviour, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/941622018-06-11T20:37:14Z2018-06-11T20:37:14ZShoppers’ movements might come down to fears of caves and the ‘butt brush’<p><em>This is the seventh article in our series, <a href="https://theconversation.com/au/topics/moving-the-masses-54500">Moving the Masses</a>, about managing the flow of crowds of individuals, be they drivers or pedestrians, shoppers or commuters, birds or ants.</em></p>
<hr>
<p>Shopping is something we all do, albeit some more reluctantly than others. It is the modern version of hunting and gathering – how we provide essentials and food for our families. We seem to do it effortlessly, moving from aisle to aisle, from store to store, paying little attention to the process. Indeed, many shop on auto-pilot, while their minds are occupied with other things. </p>
<p>As shoppers, we take for granted the shopping landscape. Yet, unlike the natural landscape where our ancestors hunted, our modern shopping centres have been purposefully designed.</p>
<p>But does the purpose-built environment really control everything shoppers do? Research paints a different picture.</p>
<h2>What about the power of marketing?</h2>
<p>In Ancient Greece, shopping revolved around the <a href="https://www.britannica.com/topic/agora"><em>agora</em></a> (a market and meeting place) where merchants sold their wares from small specialist stores or stands. Much has changed since then; we have refrigeration, plastic packaging, cars and the ability to store food for longer, which means we buy more at once. In response, retailers got bigger and bigger, moving from small corner stores to larger supermarkets, hypermarkets and malls.</p>
<p>The shopping mall might seem like the very icon of consumerism, a nefarious attempt to capture shoppers’ money. The mall was actually an attempt to return to the concept of the <em>agora</em> as a public space that invited people to gather together and socialise. </p>
<p>In late 1930s, <a href="https://99percentinvisible.org/episode/the-gruen-effect/">Victor Gruen</a>, the designer of the first shopping malls, envisaged urban spaces where people would gather and a community could form. This was the first <a href="https://en.wikipedia.org/wiki/Gruen_transfer">Gruen Transfer</a>, where old-world architectural forms were transferred to modern commercial spaces. </p>
<p><a href="https://www.citylab.com/design/2015/02/remembering-americas-mall-maestro-jon-jerde/385423/">Jon Jerde</a>, who followed Gruen to becoming an influential mall designer, has his own transfer named after him – the Jerde Transfer. This is about transferring a real urban experience into a sanitised and safe “theme park” to shop in.</p>
<p>Somewhere between the first idealistic malls and the later behemoths, the current concept of the Gruen Transfer kicked in: shoppers’ movements shifted from a determined stride (to a particular store) to an aimless wander in an almighty mall. And the concept of impulse buying was born. Perhaps the concept was given currency in the 1980s, where the idea of all-powerful marketers driving desire came to the fore thanks to <a href="https://en.wikipedia.org/wiki/Rosser_Reeves">Rosser Reeves</a>.</p>
<p>Store owners liked to think that by having the perfect shop window, outfitted just so, they could influence customers so much that they’d have no choice but to walk in and buy, buy, buy. Yet recent research (https://www.sciencedirect.com/science/article/pii/S0969698917304769) has found we can predict store sales based on the number of people who walk into the store, and that number depends on foot traffic outside the store. This mathematical regularity suggests the main driver of a store success is its location.</p>
<h2>Lessons from the supermarket</h2>
<p>Some might think that surely this is wrong, that it’s those crafty marketers and their clever tricks (based on the information they collect about us) that really influence purchases. So, let’s have a look at the marketers’ home turf – the supermarket. </p>
<p>A typical supermarket stocks over 30,000 items and yet a typical household buys just <a href="http://herbsorensen.com/herbsorensenauthor.html">300 or so unique products per year</a>. That is, they walk past roughly 29,700 products on shelves without putting any of these in their baskets. </p>
<p>That’s assuming those shoppers actually walk past the shelves in the first place! Despite a quarter of shoppers claiming to traverse every aisle on a shopping trip, <a href="https://www.amazon.com/Siemon-Scamell-Katz/e/B00P22ZGEG">less than 2% of shoppers actually do</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/222323/original/file-20180608-137315-1gry32x.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/222323/original/file-20180608-137315-1gry32x.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/222323/original/file-20180608-137315-1gry32x.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/222323/original/file-20180608-137315-1gry32x.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/222323/original/file-20180608-137315-1gry32x.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/222323/original/file-20180608-137315-1gry32x.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/222323/original/file-20180608-137315-1gry32x.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/222323/original/file-20180608-137315-1gry32x.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>So, where do shoppers go? US-based shopper scientist <a href="http://herbsorensen.com/herbsorensenauthor.html">Herb Sorensen</a> suggests that shopper movement follows natural patterns, driven by primal instincts. Rather like “stay out of caves because bears live there”, the patterns he sees are people being less likely to go all the way down an aisle when it’s stacked too high, and avoiding crowds. One aspect of this has been coined the “<a href="http://www.madetomeasuremag.com/the-butt-brush-and-other-retail-research-insights">Butt Brush Effect</a>” – shoppers don’t like standing in a spot where other people walking behind might accidentally brush against them.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/5iiFsnB8lDY?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">The ‘butt brush effect’: people do not like to be touched from behind and will even move away from products they’re interested in to avoid it.</span></figcaption>
</figure>
<p>Shoppers are naturally attracted to empty spaces. They prefer a wide pathway around a store or mall that allows them to see into the distance and avoid getting too close to other shoppers. Thus, the most common route around a store is the perimeter of the store, known as the “racetrack”. </p>
<p>From that main route shoppers can see down each aisle and duck in and out to get the items they need. Naturally, the shelves at the ends of aisles, known as “endcaps” or “gondola ends”, are the most valuable, simply because more people go past products <a href="https://www.sciencedirect.com/science/article/pii/S0969698917307257">placed here</a>. So these products get seen (and bought) by more people than products hidden away in the aisles.</p>
<p>Someone might argue stores use placement of key items like milk at the back of the store to “lure” shoppers to follow the “racetrack”. However, this is also done for a much more practical reason – milk is often stored at the back because it needs to be constantly restocked without breaking the cold chain (that is, from refrigerated truck to a store fridge). Much the same reason explains the increasing use of the two-way fridge – shoppers take bottles from the front, and staff restock from the back.</p>
<p>So, do mall and store environments influence shopper behaviour? Yes, to an extent. But, in most cases the best thing a retailer or a marketer can do is just get out of the way and let the shoppers do their thing. </p>
<p>In the <a href="https://archive.nytimes.com/www.nytimes.com/books/99/06/06/reviews/990606.06oconnt.html">words of Paco Underhill</a>, one of the <a href="https://archive.nytimes.com/www.nytimes.com/books/first/u/underhill-buy.html?mcubz=1">originators of shopper research</a>:</p>
<blockquote>
<p>No amount of merchandising can deter a shopper from his or her mission. The best you can do is go along for the ride.</p>
</blockquote>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/RghUwYUHDUA?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Paco Underhill explains how retailers plan to influence our shopping, but says we need not be completely at their mercy.</span></figcaption>
</figure>
<hr>
<p><em>You can find other articles in the series <a href="https://theconversation.com/au/topics/moving-the-masses-54500">here</a>.</em></p><img src="https://counter.theconversation.com/content/94162/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Svetlana Bogomolova receives funding from Australian Research Council. She is affiliated with The Barossa Co-op and CHOICE. The Ehrenberg-Bass Institute receives funding from corporate sponsors (<a href="http://www.marketingscience.info/list-of-sponsors">www.marketingscience.info/list-of-sponsors</a>).</span></em></p><p class="fine-print"><em><span>Bill Page is a Senior Marketing Scientist at The Ehrenberg-Bass Institute for Marketing Science. The Ehrenberg-Bass Institute receives funding from corporate sponsors (<a href="http://www.marketingscience.info/list-of-sponsors">www.marketingscience.info/list-of-sponsors</a>).
</span></em></p>Marketers once liked to think they could virtually steer people through shops and malls. But it appears shoppers’ movements, possibly driven by primal instincts, aren’t so easily directed.Svetlana Bogomolova, Associate Professor of Marketing Science, Ehrenberg-Bass Institute, University of South AustraliaBill Page, Senior Marketing Scientist, Ehrenberg Bass-Institute, University of South AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/925142018-06-04T20:28:34Z2018-06-04T20:28:34ZFed up with always being in the slow queue? That’s why queues are being ‘designed out’<figure><img src="https://images.theconversation.com/files/208792/original/file-20180304-65529-12e8sjq.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C5076%2C3381&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Businesses are weighing up the costs of queuing and using innovative ways to do away with queues, or at least make the perceptions of waiting less painful.</span> <span class="attribution"><a class="source" href="https://unsplash.com/photos/1O77vgBVkXQ">Michal Parzuchowski/Unsplash</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p><em>This is the second article in our new series, <a href="https://theconversation.com/au/topics/moving-the-masses-54500">Moving the Masses</a>, about managing the flow of crowds of individuals, be they drivers or pedestrians, shoppers or commuters, birds or ants.</em></p>
<hr>
<blockquote>
<p>Remember that time is money. <strong>– Benjamin Franklin, 1748</strong></p>
</blockquote>
<p>Whether it is lining up to pay for your groceries, making a bank transaction, or waiting for a table at a trendy restaurant, time costs money. As businesses become aware of the direct and indirect costs of waiting, they are looking at innovative ways to reduce these expenses by “designing out” queues. The challenge for anyone serving the public in a way that involves waiting is that they must manage people’s perceptions as well as optimising the rate at which they are served. </p>
<h2>People are not ships</h2>
<p>In a logistics context, say stevedoring, managers can to some extent <a href="http://www.deshlergroup.com/portclosure/">predict delays or weather conditions</a> that have impacts on efficiency. They have historical data about how long it takes to unload a ship, normal volumes of containers and how much labour is required. Using this data, they can set delivery windows so that ships can deliver quickly. Less queuing takes place and therefore less time and money is lost. </p>
<p>These <a href="http://www.inboundlogistics.com/cms/article/cutting-transportation-costs/">delivery window times and optimised routes</a> are communicated to pilots. Accordingly, they sail into ports “just in time” to be unloaded. </p>
<p>Unfortunately, unlike ships, people enter queues randomly, which creates a problem in providing optimal service. Companies cannot control this type of customer demand. </p>
<p>For example, people don’t consistently arrive at the supermarket checkout area in five-minute increments, with exactly six items. If they did, retailers could <a href="http://people.revoledu.com/kardi/tutorial/Queuing/Arrival-Distribution.html">mathematically determine</a> exactly how many staff to employ, and when to employ them, to maximise service levels and minimise costs. </p>
<h2>Hitting the queuing ‘sweet spot’</h2>
<p>Businesses face the challenge of identifying the <a href="https://www.isixsigma.com/industries/retail/queuing-theory-and-practice-source-competitive-advantage/">optimum point</a> where the costs of providing the service equal the costs of waiting. People in queues behave in ways that create direct and indirect costs for businesses. Sometimes customers will <em>baulk</em> and simply refuse to join the queue. Or they join the queue but <em>renege</em>, leaving because wait times are too long. </p>
<p>This behaviour leads to <a href="https://www.emeraldinsight.com/doi/pdfplus/10.1108/09604520710735182">measurable costs</a>. These costs are both direct, like abandoned carts, and indirect, like perceptions of poor service quality, increased dissatisfaction and low levels of customer loyalty. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/207990/original/file-20180227-36686-10b17x1.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/207990/original/file-20180227-36686-10b17x1.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/207990/original/file-20180227-36686-10b17x1.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=415&fit=crop&dpr=1 600w, https://images.theconversation.com/files/207990/original/file-20180227-36686-10b17x1.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=415&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/207990/original/file-20180227-36686-10b17x1.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=415&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/207990/original/file-20180227-36686-10b17x1.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=521&fit=crop&dpr=1 754w, https://images.theconversation.com/files/207990/original/file-20180227-36686-10b17x1.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=521&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/207990/original/file-20180227-36686-10b17x1.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=521&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The inverted curve describes the optimum balance between the costs of providing service with the costs of making customers wait.</span>
<span class="attribution"><span class="license">Author provided</span></span>
</figcaption>
</figure>
<h2>Queuing theory and the evolution of the queue</h2>
<p>Queuing theory evolved from the work of Danish engineer A.K. Erlang. In 1909 he experimented with fluctuating demand in telephone traffic. By the end of the second world war, Erlang’s early work had been extended to more general problems and business applications, such as <a href="https://hal.archives-ouvertes.fr/hal-00263072/document">airports</a>. Queuing theory is now widely used to examine arrival characteristics, waiting behaviours and queue performance to <a href="https://www.analyticsvidhya.com/blog/2016/04/predict-waiting-time-queuing-theory/">predict waiting times</a>. </p>
<p>Airports have also sought to reduce the waiting time for luggage collection by moving the carousel further away from the arrival gate. Passengers <a href="https://www.nytimes.com/2012/08/19/opinion/sunday/why-waiting-in-line-is-torture.html">spend their time walking instead of waiting</a>.</p>
<p>The nature of a queue has changed and will continue to change, as <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook43p/futurepopulation">populations increase</a> and consumers become increasingly time-poor. In a retail context, the traditional grocer, who would hand-select products for customers in a first-come-first-serve manner, has given way to self-service supermarkets since the first such store, <a href="https://australianfoodtimeline.com.au/first-self-service-grocery-store/">Piggly Wiggly</a>, opened in Memphis, Tennessee, in 1916. Promoting lower prices and better value, these supermarkets were the first to provide “checkout stands” where shoppers lined up after selecting their own products.</p>
<p>The original “grid-style” checkout allowed retailers to serve multiple shoppers at multiple checkouts while also presenting them with a small range of impulse items, such as chocolates, soft drinks and magazines. Known as a <a href="http://www.zainbooks.com/read.php?i=chapter-4--relational-models-qualitative-methods-analysis-theory-effective-management-decision-making&b=177&c=4">single-channel, single-phase system</a>, this is still the dominant format. </p>
<p><img src="https://cdn.theconversation.com/static_files/files/151/single_single_v2.gif?1528081550" width="100%"> </p>
<p>However, more and more retailers are moving to a longer single line, with customers being served by multiple devices. An example is banks of self-serve checkouts. This is referred to as a multi-channel, single-phase system. </p>
<p>These longer “snake” single lines achieve three things:</p>
<ol>
<li>they provide the illusion that the line is moving faster because it is always moving forward</li>
<li>they enable retailers to present even more tempting “impulse” treats in a longer linear flow</li>
<li>they reduce <a href="https://www.nytimes.com/2012/08/19/opinion/sunday/why-waiting-in-line-is-torture.html?pagewanted=all&_r=0">customer anxiety and frustration</a>.</li>
</ol>
<p><img src="https://cdn.theconversation.com/static_files/files/150/single_multiple_v2.gif?1528081550" width="100%"></p>
<p>The reason for the third benefit is that with two or more queues, versus a single queue, you don’t know which one is going to move faster. This creates an unpleasant feeling and a sense of inequity, which the multiple-channel format seeks to diminish.</p>
<p><img src="https://cdn.theconversation.com/static_files/files/149/multiple_multiple_v2.gif?1528081549" width="100%"></p>
<h2>Why does your queue always seems slower?</h2>
<p>Two interrelated theories explain this perception. <a href="http://psychology.iresearchnet.com/social-psychology/decision-making/illusory-correlation/">Illusory correlation</a> refers to an error in human judgment when a person perceives a relationship between two salient variables that are not in fact correlated. Consider washing your car and it starts to rain – we might think washing the car “causes” it to rain. Or we might think red cars attract more police attention – there is an “association” between driving a red car and getting a speeding ticket. In a queuing context, two important variables are at play, “speed of queue” and “your time”. </p>
<p>Added to this is amplification theory. This draws on <a href="http://assets.csom.umn.edu/assets/71516.pdf">research</a> published in 2001 that proposed that “bad is stronger than good” and “bad memories have a more powerful psychological impact on us than do good events”. In other words, <a href="http://www.bbc.com/future/story/20130827-why-other-queues-move-faster">we are more likely to remember slow queues</a> than times when we have been in faster queues. </p>
<p>In addition, unoccupied time always seems to pass more slowly than occupied time. This is why businesses are increasingly <a href="https://www.business.com/articles/simple-ways-to-improve-your-customers-waiting-experience/">giving you something to do while you queue</a>. There may be magazines close at hand, or a TV screen mounted on the wall in a bank.</p>
<p>The most obvious solution is to keep you moving. It’s a strategy used at festivals and tourist attractions where “snake” lines are common. The snake line also helps free up space, makes everything appear more orderly and equitable and prevents queue-jumping. People prefer movement, so standing still or waiting in a queue with nothing to do can create a <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.0021-9029.2006.00078.x/abstract">negative experience and negative evaluations of service</a>. </p>
<h2>Moving beyond the queue</h2>
<p>Many sectors are designing out the queue altogether, or at least the perception of queuing. For example, in many banks, government departments, libraries, retail stores and airports, the queue is beginning to disappear. </p>
<p>At <a href="https://digitalscholarship.unlv.edu/cgi/viewcontent.cgi?article=2054&context=thesesdissertations">airports</a>, check-in kiosks have replaced queues and counters. The kiosks are dispersed widely throughout the terminal, thus providing travellers with <a href="http://www.emeraldinsight.com/doi/abs/10.1108/IJRDM-08-2013-0153">perceptions of spatial convenience</a>. In retail and service landscapes our perception of convenience diminishes the further we have to walk, so clustering of essential services, including check-in kiosks and retail outlets, is replacing the traditional linear design of airports. Spatial convenience gives people the <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5511147/">perception of less crowding, no queues, ease of access and mobility</a>. </p>
<p>Retailers are <a href="https://unita.com.au/work-category/retail/">playing with innovative layouts</a> and removing the queue altogether. Bank queues are also becoming <a href="https://thefinancialbrand.com/52315/future-banking-concept-branch-design-showcase/all/">a thing of the past</a>; a new <a href="http://publicdesigngroup.com/">Bank of Queensland branch fit-out</a> invites customers to “take a seat” rather than line up for service.</p>
<h2>So, are we still queuing?</h2>
<p>Well, yes and no. We still have to wait, but the ways in which we wait, especially the perception of how we wait, is definitely changing.</p>
<p>The new <a href="https://www.amazon.com/b?ie=UTF8&node=16008589011">Amazon Go store</a>, for instance, has completely removed all the checkouts. This ensures customers will never have to queue for service. The only problem now is <a href="http://www.news.com.au/finance/business/retail/the-future-of-shopping-amazon-go-launches-cashless-supermarket-with-no-cashiers-lines-or-registers/news-story/43bc168c8d47cd9fb2e65bcd0c629642">the long line-up</a> to actually get inside the store! </p>
<hr>
<p><em>You can find other articles in the series <a href="https://theconversation.com/au/topics/moving-the-masses-54500">here</a>.</em></p><img src="https://counter.theconversation.com/content/92514/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Businesses are weighing up the costs of queuing and using innovative ways to minimise these costs by doing away with queues.Gary Mortimer, Associate Professor in Marketing and International Business, Queensland University of TechnologyLouise Grimmer, Lecturer in Marketing, Tasmanian School of Business and Economics, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/918322018-02-15T04:19:35Z2018-02-15T04:19:35ZMyer once stood for the aspirational middle class but now it’s lost sight of who its customers are<p>A big part of retail group Myer’s problem is that it has tried to be all things, to all customers. Myer has tried to hang on to its high-end customers of old, while trying appeal to value-conscious, bargain oriented customers who only shop on sale. </p>
<p>Its place in the marketplace, and in the mind of the consumer, remains unclear. This week, after consecutive write-downs, the share price continues <a href="https://www.asx.com.au/asx/share-price-research/company/MYR">its downward plummet</a> and sits around 54 cents (not far off a tenth of its original share float value of $4.10). The Myer board then dumped its chief executive this week, <a href="http://www.afr.com/business/retail/myer-in-turmoil-after-ceo-richard-umbers-forced-out-20180214-h0w3f4">citing the need</a> for urgent action to stop a fall in sales and earnings.</p>
<p>For centuries, department stores have ruled retail, and in Australia retail was ruled by Myer and David Jones. From the 1800s these stores <a href="https://www.myer.com.au/c/about-myer/the-company/about-us/content-1878-1899.html">linked Australians to the world</a>, giving Australians a taste of high fashion and exposing shoppers to luxury brands not present on Australian shores.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/more-businesses-are-trying-mobile-apps-to-lure-and-keep-consumers-88684">More businesses are trying mobile apps to lure and keep consumers</a>
</strong>
</em>
</p>
<hr>
<p>At their height, department stores focused on the needs and desires of fashionable women. These stores offered female shoppers the freedom to browse and shop, safely and decorously, away from home <a href="http://www.bbc.com/culture/bespoke/story/20150326-a-history-of-the-department-store/index.html">and from the company of men</a>. Department stores had a niche, a clear value proposition, and clearly knew who their customers were. </p>
<p>Fast forward to 2018, and department stores like Myer no longer reign supreme. </p>
<p>No doubt, the past few decades have been turbulent for the retail industry, with the growth of online retailing, the ability for consumers to comparison <a href="https://theconversation.com/more-businesses-are-trying-mobile-apps-to-lure-and-keep-consumers-88684">shop on their mobile</a> while in-store, weak <a href="https://theconversation.com/face-value-business-leaders-are-betting-we-will-spend-more-83211">consumer sentiment</a>, and the influx of <a href="https://theconversation.com/amazon-poses-a-double-threat-to-australian-retailers-78534">international retailers</a>. However, the same market conditions have been present for all retailers. </p>
<h2>Myer’s brand identity has been slowly chipped away</h2>
<p>For any brand, the unique place the brand occupies in the mind of the target consumer is its essential value. It reflects a unique selling proposition and defines exactly how the brand will compete in the marketplace (including all of its subsequent activities such as product range, pricing, marketing communications, desired experience and so on). </p>
<p>Historically, Myer (like many department stores in the western world, including Macy’s in the US, Marks and Spencer in the UK, and many others), was a middle class brand, located at a desirable address, and stood for the <a href="https://www.marketingweek.com/2017/07/12/mark-ritson-ms-decline/">pinnacle of accessible quality on the high street</a>. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/206507/original/file-20180215-124893-149sjcm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/206507/original/file-20180215-124893-149sjcm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=456&fit=crop&dpr=1 600w, https://images.theconversation.com/files/206507/original/file-20180215-124893-149sjcm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=456&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/206507/original/file-20180215-124893-149sjcm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=456&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/206507/original/file-20180215-124893-149sjcm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=573&fit=crop&dpr=1 754w, https://images.theconversation.com/files/206507/original/file-20180215-124893-149sjcm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=573&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/206507/original/file-20180215-124893-149sjcm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=573&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Historically Myer succeeded by occupying a unique position in the marketplace supplying high street fashion and luxury brands to the middle class.</span>
<span class="attribution"><span class="source">State Library of South Australia/flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>With few competitors, in the past department stores competed on quality service, a broad range of well-regarded brands that appealed to the emerging middle class, standing for quality and a degree of fashion forwardness (without being so edgy as to turn off the mainstream). As such, the stores also represented a source of aspiration for working-class consumers, something to treat oneself to, to shop for special occasions, and to peruse when you wanted to signal a sense of achievement. </p>
<p>However, with <a href="https://www2.deloitte.com/content/dam/Deloitte/global/Documents/consumer-industrial-products/gx-cip-2017-global-powers-of-retailing.pdf">greater market fragmentation</a>, a wider range of needs to appeal to, and the emergence of large numbers of well positioned local (and global) brands, Myer has struggled for identity and business.</p>
<p>Myer’s lack of clarity in the brand’s unique selling point means it’s being attacked at the top and bottom end of the market. At the top end of the market, the expansion of entry levels products, such as perfumes and accessories, and extensions of French, Italian, UK, Japanese and American luxury brands means consumers wanting to signal their status have a lot of choice. </p>
<p>At the bottom end of the market, fast fashion brands such as H&M, Primark and Zara have strong identities, recognisable brand names and a clear sense of who they are selling to (younger consumers who wish to blend in by standing out). These brands do not appeal to everyone, and are even loathed by some, but therein lies their strength. In appealing to a narrowly defined set of needs and executing that position in everything they do, <a href="https://www.jstor.org/stable/1252054?seq=1#page_scan_tab_contents">they build loyalty</a>, resulting in ongoing sales.</p>
<h2>Trying (and failing) to reach a target market</h2>
<p>Myer’s lack of brand clarity is also reflected in its practice of relying on other brands to give it a sense of cool or iconicity. In 2015, <a href="http://www.annualreports.com/HostedData/AnnualReportArchive/M/ASX_MYR_2015.pdf">Myer went through a transition</a>, shedding several long standing management team members who had transformed, and floated, the iconic retailer. Myer stalwarts, including CEO Bernie Brookes and CFO Mark Ashby, passed the helm to a new generation of management, including Richard Umbers as CEO and Daniel Bracken as Deputy CEO. Hopes were high for the “New Myer” strategy. </p>
<p>The <a href="http://investor.myer.com.au/FormBuilder/_Resource/_module/dGngnzELxUikQxL5gb1cgA/file/MYR-New-Strategy-media-release-010915.pdf">New Myer strategy</a> focused on female shoppers, high-profile brands, improved service and in-store experiences, complemented by a strong online shopping platform. Investors were asked to place their faith in a A$600 million plan to save the retailer, including a deal with Topshop.</p>
<p>In August 2015, when the strategy was announced, Myer’s share price <a href="http://investor.myer.com.au/Share-Price-Tools/?page=Historical-Share-Price">hovered around A$1.26</a>. After taking a 20% stake in the Australian Topshop franchise in 2015, Myer’s aspirations for Topshop <a href="http://www.afr.com/business/retail/myer-profit-plunges-80pc-to-119-million-after-writedowns-restructuring-costs-20170913-gygell">shattered in 2017</a>. It closed 17 Topshop stores, writing off A$45 million. Myer shares subsequently closed at an all-time low of 82 cents. </p>
<p>This approach of using each season or new release to provide a positive spillover for the main brand is old-fashioned. It relegates the brand to lower status than the means of reinforcing its image. By comparison strong brands use their identity to drive every aspect of their business.</p>
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Read more:
<a href="https://theconversation.com/westfields-history-tracks-the-rise-of-the-australian-shopping-centre-and-shows-whats-to-come-89073">Westfield's history tracks the rise of the Australian shopping centre and shows what's to come</a>
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<p>Myer’s branding challenge is also its reactive stance. Its <a href="http://investor.myer.com.au/FormBuilder/_Resource/_module/dGngnzELxUikQxL5gb1cgA/file/MYR-New-Strategy-media-release-010915.pdf">focus as part of its New Myer strategy</a> has been on “an intuitive omnichannel Myer, easy to choose, and easy to use, delivered in-store and online”. </p>
<p>But this “seamless integration” between digital and in-store is an example of trying to fend off the threat of online retail, rather than being on the front foot. While there is nothing wrong per se with trying to integrate channels, placing this aim at the heart of one’s strategy leaves us questioning: where is Myer’s brand? </p>
<p>Ironically, much of the problem stems from looking outward too much - looking for something to entice consumers, speak to the latest trends, adopt the latest technology, or respond to the latest competitive threat. While there is nothing wrong with any of these strategies, they must be framed through the lens of the brand.</p>
<p>What is lacking is Myer’s heritage, and the need for this to be carefully reframed and updated for the present day. If the brand once stood for middle class aspiration, Myer needs to now consider how the middle class has changed, and identify where there is a a role for an iconic Australian brand to service a new set of needs, for a new generation of consumers. </p>
<p>Consumers have changed, and so too has aspiration. The question leaders of a department store like Myer need to ask themselves is how can a retail brand like Myer be as desirable today, as it was in the past?</p><img src="https://counter.theconversation.com/content/91832/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>What is lacking is Myer’s heritage, and the need for this to be carefully reframed and updated for the present day.Sean Sands, Associate Professor of Marketing, Swinburne University of TechnologyMichael Beverland, Professor of Fashion Enterprise, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/880682018-01-10T19:33:25Z2018-01-10T19:33:25ZAmazon drives a fifth city-shaping retail revolution<p>As possibly the world’s oldest economic activity, retailing didn’t venture away from the traditional street, with its congestion, grime and weather exposure, until about 1800. This resulted in new types of retail space, including enclosed shopping arcades and freestanding or anchor department stores. These are still evident in cities today.</p>
<p>It helps to visualise the evolution of modern retail activity and structures in terms of five broad revolutionary cycles. Each has lasted about 50 years, as shown in the diagram below. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/201292/original/file-20180109-83559-gskxzk.gif?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/201292/original/file-20180109-83559-gskxzk.gif?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/201292/original/file-20180109-83559-gskxzk.gif?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=236&fit=crop&dpr=1 600w, https://images.theconversation.com/files/201292/original/file-20180109-83559-gskxzk.gif?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=236&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/201292/original/file-20180109-83559-gskxzk.gif?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=236&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/201292/original/file-20180109-83559-gskxzk.gif?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=296&fit=crop&dpr=1 754w, https://images.theconversation.com/files/201292/original/file-20180109-83559-gskxzk.gif?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=296&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/201292/original/file-20180109-83559-gskxzk.gif?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=296&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Revolutionary cycles and disruptive innovations.</span>
<span class="attribution"><span class="source">Author</span></span>
</figcaption>
</figure>
<p>After the first industrial revolution of the late 18th and early 19th century, two industrial revolutions followed, from about 1850 to 1900, and then from 1900 to 1950. A consumer revolution began about 1950. Then, at the dawn of the new millennium, came an information revolution. </p>
<p>Each revolution spawned a unique set of technological innovations that shocked the status quo by replacing outdated structures with new ones. The retail sector and retail spaces were not immune to this process.</p>
<h2>Creative destruction</h2>
<p>In 1942, the economist Joseph Schumpeter called this process <a href="https://www.investopedia.com/terms/c/creativedestruction.asp">creative destruction</a>. Nowadays a comparable term, disruption, is bandied about, particularly in the retail world. Internet retailing is an obvious example. </p>
<p>So what transformations in physical retail spaces occurred during these key revolutionary periods? We need look no further than 19th-century Paris for illustrations of these changes.</p>
<h2>New shopping platforms</h2>
<p>Structural cast iron, the world’s first artificial building material, perfected in the 1790s, enabled the construction of glass skylights and large column-free spaces. In Paris, this prompted the development of shopping arcades with skylights such as the <a href="https://en.wikipedia.org/wiki/Passage_des_Panoramas">Passage des Panoramas</a> in 1800.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/201120/original/file-20180108-83574-1m0tozp.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/201120/original/file-20180108-83574-1m0tozp.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/201120/original/file-20180108-83574-1m0tozp.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/201120/original/file-20180108-83574-1m0tozp.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/201120/original/file-20180108-83574-1m0tozp.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/201120/original/file-20180108-83574-1m0tozp.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/201120/original/file-20180108-83574-1m0tozp.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/201120/original/file-20180108-83574-1m0tozp.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Passage des Panoramas, Paris.</span>
<span class="attribution"><span class="source">Author</span></span>
</figcaption>
</figure>
<p>The innovation was successfully applied in 1852 to the world’s first department store, <a href="https://www.24sevres.com/en-au/le-bon-marche/history">Le Bon Marche</a>, also in Paris. It still serves as a template for today’s department stores. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/201049/original/file-20180107-26139-t15ka4.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/201049/original/file-20180107-26139-t15ka4.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/201049/original/file-20180107-26139-t15ka4.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/201049/original/file-20180107-26139-t15ka4.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/201049/original/file-20180107-26139-t15ka4.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/201049/original/file-20180107-26139-t15ka4.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/201049/original/file-20180107-26139-t15ka4.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Le Bon Marche, showing cast iron colums and skylight roof.</span>
<span class="attribution"><span class="source">Author</span></span>
</figcaption>
</figure>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/201050/original/file-20180107-26151-bhtg6a.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/201050/original/file-20180107-26151-bhtg6a.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/201050/original/file-20180107-26151-bhtg6a.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=750&fit=crop&dpr=1 600w, https://images.theconversation.com/files/201050/original/file-20180107-26151-bhtg6a.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=750&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/201050/original/file-20180107-26151-bhtg6a.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=750&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/201050/original/file-20180107-26151-bhtg6a.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=943&fit=crop&dpr=1 754w, https://images.theconversation.com/files/201050/original/file-20180107-26151-bhtg6a.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=943&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/201050/original/file-20180107-26151-bhtg6a.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=943&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Royal Arcade, Melbourne.</span>
<span class="attribution"><a class="source" href="https://www.instagram.com/p/Badt71GBrkn/">Instagram/royalarcade</a></span>
</figcaption>
</figure>
<p>The diffusion of innovation was rapid. The arcade and department store formats were soon adopted in Australia, most notably in Melbourne’s <a href="http://royalarcade.com.au/history/">Royal Arcade</a> (1870), Sydney’s <a href="https://dictionaryofsydney.org/entry/grace_brothers">Grace Bros Department Store</a> (1885) and <a href="http://adelaidearcade.com.au/history/">Adelaide Arcade</a> (1885). At the time, Australia was one of the wealthiest countries in the world, with the resources and financial clout to become an early adopter of European innovations.</p>
<h2>The age of steel</h2>
<p>Spurred on by steel-making in the next revolutionary period, including the <a href="https://searchinginhistory.blogspot.com.au/2015/06/the-bessemer-process-process-that-made.html">Bessemer process</a>, railways and tramways connected cities, towns and inner and middle ring suburbs. Retailing flourished on the high streets around train stations and tram stops. In Australia, this was particularly evident in Melbourne, Sydney and Adelaide, where remnants of this historical legacy can still be seen.</p>
<h2>Mass production and preservation</h2>
<p>The third revolution included innovations in automobile mass production, steel container packaging and food preservation – thanks to refrigeration. These innovations would eventually have a profound impact on the small independent retail sector as the next revolution unfolded.</p>
<h2>Mass consumption and consumerism</h2>
<p>After the second world war, population growth, social mobility and affordable cars drove suburbanisation in Australia’s capital cities. An emerging consumerism, stimulated by advertising on television, which was introduced in 1956, was under way. </p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/201104/original/file-20180108-83571-5dmucf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/201104/original/file-20180108-83571-5dmucf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/201104/original/file-20180108-83571-5dmucf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=691&fit=crop&dpr=1 600w, https://images.theconversation.com/files/201104/original/file-20180108-83571-5dmucf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=691&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/201104/original/file-20180108-83571-5dmucf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=691&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/201104/original/file-20180108-83571-5dmucf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=869&fit=crop&dpr=1 754w, https://images.theconversation.com/files/201104/original/file-20180108-83571-5dmucf.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=869&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/201104/original/file-20180108-83571-5dmucf.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=869&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Roselands shopping centre was described as ‘a product of the motorised age’ when it opened in 1965.</span>
<span class="attribution"><a class="source" href="https://commons.wikimedia.org/wiki/File:Roselands_Facade.jpg">Wikimedia Commons</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span>
</figcaption>
</figure>
<p>Independent retailers that retained provisioning and selling methods from earlier times found their popularity waning. The death knell of the small independent retailer that failed to keep pace with the machinery of mass consumption began with the emergence of the supermarket format in 1960. Planned suburban shopping centres with ample car parking, such as <a href="http://www.adonline.id.au/buildings/chadstone-shopping-centre/">Chadstone</a> in Melbourne (1960) and <a href="https://en.wikipedia.org/wiki/Roselands_Shopping_Centre#History">Roselands</a> in Sydney (1965), mushroomed in the nation’s capitals. </p>
<p>With the launch of the first <a href="http://www.theage.com.au/news/business/bankcard-checks-out-151-downfall-on-the-cards/2006/02/02/1138836371293.html">Bankcard</a> in 1974, the ready availability of credit drove consumerism and consumption. </p>
<p>These were to be the hallmarks of the retail landscape for the next 50 years, until the new millennium ushered in the information revolution and another retail paradigm shift. </p>
<h2>The information revolution</h2>
<p>We are almost two decades into the 21st century, and tales about damage to the traditional retail sector wrought by the digital insurgency are rife. Online retailers are engaged in cyber warfare with physical retailers and each other in a battle for the consumer dollar. Collateral damage is evident, at least partially, in shop vacancies on high streets and <a href="https://theconversation.com/history-says-department-stores-will-struggle-in-the-future-85527">declining department store sales</a>. </p>
<p>Shopping centres <a href="https://theconversation.com/how-shopping-centres-are-changing-to-fight-online-shopping-80056">have responded</a> by placing more emphasis on the shopper experience. This approach includes improved food and beverage offerings, provision of entertainment and, lately, faux main streets with integrated residential development. It is an interesting irony that the traditional high street, with its rustic quality, diverse land uses, historic character and <a href="https://collections.museumvictoria.com.au/articles/2933">cafe culture</a>, has been the inspiration for many of these ideas.</p>
<p>In conclusion, we have seen profound changes in the physical retail landscape over the last two centuries and, if history is any guide, more change is yet to come. </p>
<p>This change includes a somewhat unexpected “back to the future” scenario in online retailing. Amazon currently confines itself to an online presence in Australia, but has established bricks and mortar stores in the United States. These include the innovative <a href="http://www.businessinsider.com/amazon-go-grocery-store-future-photos-video-2017-6?IR=T">Amazon Go</a>, a competitive threat that has forced other physical competitors like <a href="http://mashable.com/2017/12/21/walmart-cashierless-shopping-amazon/#F6NZ7HvutPqF">Walmart</a> to respond. If Amazon adopts a similar strategy here, this will no doubt provoke reactions from other physical and online retailers, and thus a probable new revolution in retailing.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/NrmMk1Myrxc?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Amazon Go offers shoppers physical stores with no lines and no checkouts.</span></figcaption>
</figure><img src="https://counter.theconversation.com/content/88068/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Paul Drechsler does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Urban retail space is being transformed yet again. Predictions of the demise of physical retailing in the face of online competition overlook its resilience over two centuries of disruptive innovations.Paul Drechsler, Doctoral Researcher, The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/879382017-12-05T19:20:57Z2017-12-05T19:20:57ZWhat makes us sign up to subscription boxes<figure><img src="https://images.theconversation.com/files/197487/original/file-20171204-5406-mli7k6.jpg?ixlib=rb-1.1.0&rect=2%2C49%2C1499%2C947&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The rush of dopamine upon opening a subscription box is similar to the one experienced by gamblers.</span> <span class="attribution"><span class="source">hectore/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>Everyone can relate to that excitement of ripping open a present or the anticipation before discovering what a package in the post contains. In fact, the rush of good feeling is very similar to what gamblers experience and it’s this type of psychological effect that retailers are now banking on. </p>
<p><a href="http://jamesonmorris.com/what-is-a-subscription-box/">Subscription box retailing</a> is a recurring delivery of various products, grouped according to a theme or product type, and ordered online through a subscription retailer. </p>
<p>While customers select the type of box, and there are literally <a href="https://subta.com/wp-content/uploads/2017/06/Hitwise-analysis-of-SubBox-industry-May-2017.pdf">hundreds of different genres and retailers</a> to choose from. Prices for boxes vary depending on the type of box, with costs ranging from A$10 per month (like beauty retailer <a href="https://www.birchbox.com/">Birchbox</a>) to over A$100 (like luxury retailer <a href="http://monthlyexpress.com/">Monthly Express</a>).</p>
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<strong>
Read more:
<a href="https://theconversation.com/why-retailers-want-you-to-click-and-collect-83094">Why retailers want you to 'click and collect'</a>
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</em>
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<p>Retailers know that most customers want to <a href="https://www.retaildive.com/news/why-most-shoppers-still-choose-brick-and-mortar-stores-over-e-commerce/436068/">see, touch and “experience” products</a> before they buy them, so subscription boxes, often filled with smaller sample sizes of new products, give customers a chance to try before they buy.</p>
<p>Although the delivery of subscription boxes is recurring (and that is also part of their appeal) there is a great deal of difference between a subscription box and a recurring subscription. </p>
<p>Recurring subscriptions are the automatic and regular delivery of everyday items such as toilet paper (<a href="https://au.whogivesacrap.org/">Who Gives a Crap</a>), men’s grooming products (<a href="https://www.manperfected.com.au/">Man Perfected</a>) and soap and cleaning products (<a href="https://bondiwash.com.au/">Bondi Wash</a>). </p>
<p>Even large retailers such as Target in the United States are offering <a href="https://www.target.com/c/target-subscriptions-ways-to-shop/-/N-55b84#?lnk=snav_rd_subscriptions">recurring subscription services</a> on hundreds of everyday items such as baby formula and printer ink. These services provide discounts for regular subscribers as well as free returns or easy rescheduling of delivery dates.</p>
<p>But it’s subscription box retailing that appeals to consumers on a number of emotional and behavioural levels. </p>
<h2>Why we want to know what’s in the box</h2>
<p>We go through a number of emotions with subscription boxes. There’s anticipation (eagerly awaiting the delivery of the box), curiosity (what will the box contain?), surprise (upon opening the box) and joy, delight, satisfaction and sometimes disappointment upon discovering the array of products contained within the box. </p>
<p>The cycle then starts all over again with anticipation of the delivery of the next box. There are even dedicated <a href="http://myboxaddiction.com/">websites</a>, <a href="https://www.instagram.com/mysubscriptionaddiction/?hl=en">social media sites</a> and <a href="https://www.youtube.com/results?search_query=subscription+box+unboxing">youtube channels</a> that allow box subscribers to share the experience of opening their boxes.</p>
<p>Our motivation to subscribe to these boxes can be explained through the powerful rush of dopamine that is secreted, both when there is anticipation of a reward, and when the reward is actually delivered. This is the <a href="https://www.scientificamerican.com/article/how-the-brain-gets-addicted-to-gambling/">same rush that is experienced by gamblers</a> and it is based on Burrhus Skinner’s theory of <a href="https://www.simplypsychology.org/operant-conditioning.html">operant conditioning</a>. </p>
<p>Operant conditioning centres around changes in behaviour due to either negative or positive reinforcement. In the case of subscription boxes, the reinforcement is positive.</p>
<p>However, Skinner also found that one of the most powerful forms of positive reinforcement (getting subjects to do what you want them to do) occurs when there is a variable ration of reinforcement or a “<a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3845016/">reward uncertainty</a>”, and this is where the analogy with gambling comes in.</p>
<p>According to <a href="http://www.abc.net.au/news/health/2017-10-14/gambling-addiction-the-zone-where-winning-is-a-distraction/9044598">gambling researcher Dr Charles Livingstone</a>:</p>
<blockquote>
<p>if you give them (in our case customers) a predictable set of rewards, then they lose interest quite quickly; if it’s unpredictable, they tend to establish behaviour which is very hard to extinguish </p>
</blockquote>
<p>Retailers are also relying on another aspect of our psychology - <a href="https://www.researchgate.net/profile/Randy_Colvin/publication/21084285_Explorations_in_Behavioral_Consistency_Properties_of_Persons_Situations_and_Behaviors/links/55_087e260cf27e990e0bb174/Explorations-in-Behavioral-Consistency-Properties-of-Persons-Situations-and-Behaviors.pdf">behavioural consistency</a>.</p>
<p>This theory states that our past behaviour is the best predictor of future behaviour. So in this regard once retailers have consumers transact in a certain way (for example by signing up for ongoing subscriptions), consumers are likely to continue this behaviour. Even more so if the behaviour is easy to perform and brings satisfaction or enjoyment. </p>
<p>Some subscription retailers also very cleverly employ the <a href="http://www.tandfonline.com/doi/full/10.1080/09593960701778077?scroll=top&needAccess=true">scarcity principle</a> (that there’s only limited offerings of products) with the notion of fear of missing out (<a href="http://www.skulocal.com/insights/how-fear-of-missing-out-fomo-impacts-what-consumers-are-buying/">FoMO</a>) to encourage customers to commit. </p>
<h2>Good for retailers, not always good for customers</h2>
<p>Subscription box retailing allows retailers to collect customer data, especially when they require their customers to fill in <a href="https://www.stitchfix.com/">detailed questionnaires</a> when they sign up. Under the guise of making the box “tailor-made” to suit each individual customer, retailers get <a href="https://sloanreview.mit.edu/article/using-analytics-and-ai-subscription-e-commerce-has-personalized-marketing-all-boxed-up/">valuable information</a> which can be shared with brands that provide the products.</p>
<p>Subscription boxes don’t always delight. Some shoppers have <a href="https://www.choice.com.au/health-and-body/beauty-and-personal-care/skin-care-and-cosmetics/articles/beauty-box-subscriptions">reported disappointment</a> with product selection, difficulty returning products, as well as problems with terminating contracts and getting refunds.</p>
<hr>
<p><strong><em>Reads more: <a href="https://theconversation.com/experiments-in-robotics-could-help-amazon-beat-australias-slow-delivery-problem-87598">Experiments in robotics could help Amazon beat Australia’s slow delivery problem</a></em></strong></p>
<hr>
<p>Unless dissatisfied customers take the sometimes convoluted step to cancel their payment and end their contract with the retailer, automatic renewal of subscriptions means that the payment will keep being taken and the boxes will just keep coming. This means consumers have to read the fine print before handing over their payment details, especially the rules around the minimum number of deliveries and the notice required to <a href="https://www.businessinsider.com.au/subscription-companies-run-into-problems-2016-1?r=US&IR=T">terminate the subscription</a>. </p>
<p>Consumers should be mindful of the psychology around their own behaviour in signing up for subscriptions. This is especially the case as an <a href="https://theconversation.com/amazon-poses-a-double-threat-to-australian-retailers-78534">increasingly competitive world</a> of online retailing, we can certainly expect to see more subscription box retailers.</p><img src="https://counter.theconversation.com/content/87938/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Retailers are banking on some of our behavioural and emotional traits to get us to sign up to subscription boxes.Louise Grimmer, Lecturer in Marketing, University of TasmaniaGary Mortimer, Associate Professor, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/876472017-11-22T16:49:31Z2017-11-22T16:49:31ZRetail rage: Why Black Friday leads shoppers to behave badly<p>The manic nature of <a href="https://blackfriday.com/pages/black-friday-history">Black Friday</a> has at times led shoppers to engage in fistfights and other misbehavior in their desperation to snatch up the last ultra-discounted television, computer or pair of pants. </p>
<p>What is it about the day after Thanksgiving – a day meant to celebrate togetherness and shared feasting – that inspires consumers to misbehave? </p>
<p>Fellow researchers Sharron Lennon, Minjeong Kim, Kim Johnson and I have in recent years been exploring the causes of consumer misbehavior on Black Friday, historically <a href="http://www.businessinsider.com/the-biggest-shopping-day-of-the-year-2016-10">one of the busiest</a> shopping days of the year. <a href="http://dx.doi.org/10.1080/20932685.2017.1321967">Our research</a> shows how our emotions affect our likelihood to misbehave, as well as a significant difference between men and women. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/6k1CWWUi7MM?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">A fight breaks out in a Walmart in 2016.</span></figcaption>
</figure>
<h2>Black Friday mayhem</h2>
<p>The term “Black Friday” <a href="http://www.valuewalk.com/2017/11/what-is-black-friday-date-history/">first appeared</a> in the journal Factory Management and Maintenance in 1951. It signals the beginning of the Christmas shopping season, when many retailers finally go “in the black” – that is, they become profitable for the year. </p>
<p>More recently, Black Friday has become a setting for <a href="http://dx.doi.org/10.1177/0887302X11401907">consumer misbehavior</a> as shoppers compete for deeply discounted products. <a href="http://nymag.com/daily/intelligencer/2012/11/black-friday-a-history-of-violence.html">Fighting</a>, <a href="http://www.cnn.com/2011/11/25/business/money-black-friday-incidents/index.html">pepper-spraying</a>, dumping merchandise, ransacking stores, robberies and shootings <a href="http://thekeep.eiu.edu/cgi/viewcontent.cgi?article=1012&context=fcs_fac">have all been reported</a> on Black Friday. The Occupational Safety and Health Administration <a href="https://www.osha.gov/OshDoc/data_General_Facts/Crowd_Control.html">has even issued guidelines</a> to retailers about how to avoid injuries and deaths. </p>
<p>In the U.S., the most shocking example of misbehavior occurred in 2008 when a <a href="http://www.nytimes.com/2008/11/29/business/29walmart.html">Walmart worker was trampled</a> and killed as shoppers rushed to enter the store. </p>
<p>So what causes some consumers to behave so badly? </p>
<p>It starts with the <a href="http://www.emeraldinsight.com/journals.htm?articleid=1931057&show=abstract">unique characteristics</a> of Black Friday sales promotions and the frantic retail environment they create. Retailers heavily promote their most desirable items at deeply discounted prices in order to encourage more foot traffic. Demand for those precious few items naturally exceeds supply. That imbalance can lead to aggressive consumer behavior. </p>
<p>But another key ingredient is sleep deprivation, which results from the very timing of the sales, which may begin at midnight or early in the morning and require eager customers to camp outside a store all night. That means many Black Friday shoppers aren’t functioning at their best, resulting in grumpy moods and bad decisions. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/195906/original/file-20171122-6039-bw9z1v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/195906/original/file-20171122-6039-bw9z1v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=406&fit=crop&dpr=1 600w, https://images.theconversation.com/files/195906/original/file-20171122-6039-bw9z1v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=406&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/195906/original/file-20171122-6039-bw9z1v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=406&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/195906/original/file-20171122-6039-bw9z1v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=510&fit=crop&dpr=1 754w, https://images.theconversation.com/files/195906/original/file-20171122-6039-bw9z1v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=510&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/195906/original/file-20171122-6039-bw9z1v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=510&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">One way to prevent consumer misbehavior from getting out of hand is ensuring plenty of staff is on hand to handle the crowds.</span>
<span class="attribution"><span class="source">Noah K. Murray/Invision for Target/AP Images</span></span>
</figcaption>
</figure>
<h2>Impact of crowded stores</h2>
<p><a href="http://dx.doi.org/10.1386/fspc.1.2.193_1">Research my colleagues and I conducted</a> in 2014 examined how two situational variables – large crowds and the rude, argumentative behavior of fellow shopper – affected the likelihood that otherwise jovial consumers would become Black Friday miscreants. </p>
<p>We created a questionnaire based on past research of the topic and asked several hundred students at four universities located in different regions of the country to fill them out. We analyzed only results from the 260 participants who reported to have shopped on Black Friday in the past and completed the survey.</p>
<p>On the whole, we found the large crowds that congregate on Black Friday actually had positive effects on <a href="http://thekeep.eiu.edu/fcs_fac/13/">consumer behavior</a>, reducing dissatisfaction and aggression and thus errant activity as well. That is, as long as the shoppers were expecting to have to navigate very crowded stores.</p>
<p>All it takes is one bad seed, however, to ruin the experience for others. Being unable to purchase the advertised product seems unfair, leading to misbehavior and in turn making others more likely to follow suit.</p>
<p>Since an expectation of crowds seemed to make it less likely that shoppers would perceive inequities, posting signs at entrances or in advertisements reminding shoppers to bear with Black Friday’s crowded conditions may help keep customers civil.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/65816/original/image-20141128-9758-1a84t1e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/65816/original/image-20141128-9758-1a84t1e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/65816/original/image-20141128-9758-1a84t1e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=370&fit=crop&dpr=1 600w, https://images.theconversation.com/files/65816/original/image-20141128-9758-1a84t1e.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=370&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/65816/original/image-20141128-9758-1a84t1e.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=370&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/65816/original/image-20141128-9758-1a84t1e.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=465&fit=crop&dpr=1 754w, https://images.theconversation.com/files/65816/original/image-20141128-9758-1a84t1e.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=465&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/65816/original/image-20141128-9758-1a84t1e.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=465&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Thanksgiving Day holiday shoppers line up with television sets on discount at the Target retail store in Chicago, Illinois, in 2013.</span>
<span class="attribution"><span class="source">Reuters</span></span>
</figcaption>
</figure>
<h2>Emotional shoppers</h2>
<p>In <a href="http://dx.doi.org/10.1080/20932685.2017.1321967">a 2017 study</a> we examined how our emotions and personality traits influence consumers and whether there are differences between women and men. </p>
<p>We designed an online survey in which participants – 411 students who indicated they had previously shopped on Black Friday – were randomly assigned to read one of three scenarios involving a customer trying to buy a discounted item the day after Thanksgiving.</p>
<p>In two of the scenarios, the customer went home empty-handed after not being able to make a desired purchase, either because the retailer ran out of the product or because the promotion had ended. In the third one, the participant read about a customer who managed to successfully snare the desired product – either a smartphone or clothing – at the greatly reduced price. </p>
<p>After reading the assigned scenario, participants completed a series of scales that assessed their emotions such as anger and thrill, their personality traits and their likelihood to misbehave on Black Friday.</p>
<p>Our findings showed that participants – both men and women – who had an emotional response to the scenarios, whether negative or positive, were more likely to be willing to engage in consumer misbehavior.</p>
<p>As for differences between the sexes, we found that men’s capacity for self-control was the primary trait that determined whether they were likely to behave badly on Black Friday. </p>
<p>In other words, possessing more self-control mitigated any anger that might lead to misbehavior. For women, self-control was irrelevant. What mattered for them was public self-consciousness – that is, how others viewed them. And surprisingly, women deemed to have a high degree of public self-consciousness were more likely to misbehave if they got angry.</p>
<h2>Battle of the fittest</h2>
<p>Black Friday creates a competitive environment since not all shoppers can get what they want. Thus, this competitive environment causes both positive and negative emotions. Consumers are thrilled when they get what they want and frustrated when they do not. </p>
<p>For retailers, Black Friday is meant explicitly to attract these large crowds in hopes of ringing in more sales. But besides leading to minor misbehavior, more people jostling over a small number of deeply discounted items can also lead to injuries or even wrongful death lawsuits. Retailers need to balance making more money and the safety of their customers and workers. </p>
<p>In general, reducing the number of <a href="http://heinonlinebackup.com/hol-cgi-bin/get_pdf.cgi?handle=hein.journals/saclr50&section=23">unpleasant customers</a> would improve the shopping experience for other shoppers as well as for store employees. Rather than ignoring or accommodating such shoppers, retailers should be proactive by clearly communicating store policies and quickly reacting to signs of aggression by removing the bad actors. Other steps retailers could take include adding checkout lanes to speed up traffic and putting more employees on the sales floor to improve responsiveness to shopper concerns. </p>
<p>Ultimately, customers are responsible for their own behavior. When shoppers behave responsibly, the Black Friday experience isn’t spoiled for their fellow customers and everyone is able to buy their digital goods and clothes in a safe and relatively stress-free environment. </p>
<p><em>This article incorporates elements of a <a href="https://theconversation.com/retail-rage-why-black-friday-leads-shoppers-to-behave-badly-34041">piece</a> written by the same author and published on Nov. 28, 2014.</em></p><img src="https://counter.theconversation.com/content/87647/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jaeha Lee does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A retail scholar explains what drives consumers to behave badly on one of the busiest shopping days of the year.Jaeha Lee, Associate Professor of Apparel, Design and Hospitality Management, North Dakota State UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/855272017-10-29T19:11:09Z2017-10-29T19:11:09ZHistory says department stores will struggle in the future<figure><img src="https://images.theconversation.com/files/192145/original/file-20171026-13311-1ev5me2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Once proud, department stores are just a shell of their former selves.</span> <span class="attribution"><span class="source">Rousel Studios. Collection: Museum of Applied Arts and Sciences.</span></span></figcaption></figure><p>Explanations for the <a href="http://www.smh.com.au/business/property/solly-lew-tells-myer-to-fess-up-on-sales-20171016-gz1udm.html">poor performance of Australian department stores</a> vary broadly. They have focused on the <a href="http://www.news.com.au/finance/business/retail/why-our-big-department-stores-are-struggling/news-story/460eed4ce498e3d811e9982a94638b00">challenges of online competition</a>, <a href="http://www.smh.com.au/business/retail/department-stores-face-uncertain-future-as-sales-seen-shrinking-over-coming-years-20170301-gunxmh.html">weak consumer sentiment</a> and the influx of <a href="https://thewest.com.au/business/commercial-property/westfield-boss-admits-department-stores-are-in-decline-ng-b88440070z">international retailers</a>. </p>
<p>A few years ago, it was <a href="http://www.abc.net.au/news/2011-08-05/elliott---myer2c-myer-on-the-wall2c-who27s-got-the-worst-ser/2824866">poor service</a>, botched online strategies, and a host of other <a href="https://www.smartcompany.com.au/people-human-resources/managing/david-jones-and-myer-slide-into-irrelevance-why-our-department-stores-are-failing/">operational and marketing issues</a>. These critiques are valid, but they are also part of a much longer story. </p>
<p>Department stores began as retail innovators. They arose within a changing consumer environment distributing mass produced goods. The scale of their operations, and the breadth of their product ranges helped establish retail dominance. Bit by bit, their competitive advantage has eroded.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-shopping-centres-are-changing-to-fight-online-shopping-80056">How shopping centres are changing to fight online shopping</a>
</strong>
</em>
</p>
<hr>
<p>The latest results from <a href="http://www.asx.com.au//asxpdf/20170914/pdf/43mb4wwg6xnfm0.pdf">Myer</a> and <a href="http://www.afr.com/business/retail/david-jones-profit-falls-29-pc-as-costs-markdowns-soar-20170824-gy3era">David Jones</a> don’t inspire confidence. Myer experienced an 80% drop in profits over the past year, while for David Jones it was 25%.</p>
<p>Myer chief executive <a href="http://www.abc.net.au/news/2017-09-14/myer-profit-tumbles-80pc-on-falling-sales-and-write-downs/8944142">Richard Umbers</a> pointed to “heightened competition, subdued consumer sentiment and discount fatigue”. </p>
<p>David Jones chief executive John Dixon blamed the costs involved in turning around a business that he said had been “<a href="http://www.afr.com/business/retail/david-jones-profit-falls-29-pc-as-costs-markdowns-soar-20170824-gy3era">in a form of managed decline</a>” prior to being acquired by the South African Woolworths company in 2014.</p>
<h2>Changing cities</h2>
<p>Department stores emerged in Britain and France in the 19th century. They introduced several new innovations, including set prices rather than allowing haggling, a move away from credit to cash sales, off-the rack clothing, improvements in stock control and a high turnover sales model. </p>
<p>In the second half of the century, large-scale, purpose-built stores that stocked goods meeting a full range of needs for the home, as well as ready-made clothing, were constructed in major cities across Europe, North America and Australasia. These included Harrods in London, Le Bon Marché in Paris, Macy’s and Alexander Turney Stewart’s “Marble Palace” in New York and David Jones in Australia.</p>
<p>These stores reached their height in the interwar years, and despite setbacks during the Great Depression and World War II, dominated consumer imaginations and urban skylines until the late-1950s.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/191783/original/file-20171025-5841-xwronb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/191783/original/file-20171025-5841-xwronb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/191783/original/file-20171025-5841-xwronb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=368&fit=crop&dpr=1 600w, https://images.theconversation.com/files/191783/original/file-20171025-5841-xwronb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=368&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/191783/original/file-20171025-5841-xwronb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=368&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/191783/original/file-20171025-5841-xwronb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=463&fit=crop&dpr=1 754w, https://images.theconversation.com/files/191783/original/file-20171025-5841-xwronb.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=463&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/191783/original/file-20171025-5841-xwronb.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=463&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Mark Foy’s Limited, Sydney - the new ‘Piazza’ store at Liverpool, Castlereagh & Elizabeth Streets, circa 1930.</span>
<span class="attribution"><span class="source">Artist unknown, Caroline Simpson Library & Research Collection, Sydney Living Museums, Record No. 37955</span></span>
</figcaption>
</figure>
<p>Their retail preeminence was based on urban environments built around public transport. The rise of the automobile posed an existential threat. The great city stores that survived longest in Australia – David Jones, Myer and Grace Bros – were those that embraced suburban expansion through shopping centre development. </p>
<p>Firms that were once household names - Farmers, Anthony Hordern & Sons, Foy & Gibson, Buckley & Nunn and a host of others - have all disappeared.</p>
<p>However, by developing and taking tenancies in shopping centres – an innovation that sustained and prolonged their lifespan – department stores created a powerful competitor. With more efficient, specialist retailers serving as its departments, what is a shopping centre but a department store on a larger scale? </p>
<p>Until the 1970s, department stores were also able to buy customer loyalty by offering exclusive credit provisions. This occurred through store cards that customers could use to make purchases at that store and its branches.</p>
<p>The bankcard rollout, <a href="http://www.smh.com.au/news/national/bankcard-bound-for-the-shredder/2006/02/02/1138836371952.html">beginning in 1974</a>, and the bank credit cards that followed, helped to democratise credit provision, freeing customers to shop wherever they liked. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/191782/original/file-20171025-5838-1dtkv4l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/191782/original/file-20171025-5838-1dtkv4l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/191782/original/file-20171025-5838-1dtkv4l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=381&fit=crop&dpr=1 600w, https://images.theconversation.com/files/191782/original/file-20171025-5838-1dtkv4l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=381&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/191782/original/file-20171025-5838-1dtkv4l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=381&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/191782/original/file-20171025-5838-1dtkv4l.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=479&fit=crop&dpr=1 754w, https://images.theconversation.com/files/191782/original/file-20171025-5838-1dtkv4l.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=479&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/191782/original/file-20171025-5838-1dtkv4l.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=479&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Exteriors of the Anthony Hordern and Sons department store, 1901-1938.</span>
<span class="attribution"><span class="source">State Library of New South Wales, ID No. IE1001822</span></span>
</figcaption>
</figure>
<h2>Discounters and category killers</h2>
<p>The next existential threat emerged from a retail innovation that took the United States by storm in the 1950s: discount department stores that used the self-service supermarket retail model to sell department store merchandise. </p>
<p><a href="http://onlinelibrary.wiley.com/doi/10.1111/aehr.12107/abstract">In Australia</a>, Coles saw an expansion opportunity and launched <a href="http://www.kmart.com.au/about-kmart">Kmart</a> in 1969. Myer, observing the impact of discount department stores on traditional department stores in the US, rolled out <a href="https://www.target.com.au/company/about-us/our-history">Target</a>. Woolworths lagged, but introduced <a href="https://www.woolworthsgroup.com.au/page/about-us/our-brands/portfolio-businesses/BIG_W">Big W</a> in the mid-1970s.</p>
<p>Over time, these stores took a heavy toll on the sales of traditional department stores. Figures provided by <a href="https://urbis.com.au/insights-news/global-retail-trends-department-stores-a-dying-breed/">Urbis</a> show that in 1974, traditional department stores accounted for 27% of sales of department store-type merchandise such as home furnishings, apparel and cosmetics, with discount stores making just 2% of such sales. By 1991, the figures were 12% and 11% respectively.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/not-the-end-for-department-stores-but-time-is-running-out-to-embrace-technology-9730">Not the end for department stores - but time is running out to embrace technology</a>
</strong>
</em>
</p>
<hr>
<p>Since then, both have had trouble competing, not only with each other, but with “<a href="http://www.sciencedirect.com/science/article/pii/S0024630197000757">category killers</a>” that took the self-service model and applied it to specific categories of goods.</p>
<p>This allowed them to achieve efficiencies of scale and brand recognition, while providing deep product ranges, specialist service and cheap prices. Think Toys-R-Us, Rebel, Lincraft, The Good Guys, Harvey Norman, Freedom and Officeworks.</p>
<p>You can still buy toys in Myer, but who does? You can buy a fridge if you are happy to pay a significant premium. This is niche retailing – a complete inversion of the mass-market retail principles that underscored the original department store business model.</p>
<p>International fast fashion is just the latest category killer for a product segment sold by department stores. If department stores lose fashion, they are gone. And the retailers they are competing with – Zara, H&M, Uniqlo and others – operate <a href="http://www.fastretailing.com/eng/ir/direction/position.html">on a scale</a> that eclipses national department store chains.</p>
<h2>What’s next?</h2>
<p>Department stores may well extend their lifespan. There are plenty of pundits offering solutions, both <a href="http://www.theaustralian.com.au/business/business-spectator/the-future-of-shopping-in-australia-/news-story/0cd2d46c8b2bd5f3fa37c214169cc89a">here</a> and <a href="http://www.therobinreport.com/the-future-of-department-stores/">overseas</a>. </p>
<p>Nevertheless, it’s likely Australia will see further market rationalisation. Three chains are likely to be left: David Jones or Myer at the top, Myer or Target in the middle, and Kmart at the bottom. This is not definitive – innovative management can turn around a brand within a few years as <a href="http://www.afr.com/business/retail/the-turnaround-king-of-kmart-20100917-iuvaz">Guy Russo</a> did with Kmart recently and <a href="http://www.ausfoodnews.com.au/2015/11/09/supermarket-history-cycle-begins-again.html">Paul Simons</a> did with Woolworths in the late-1980s. </p>
<p>But rationalisation will continue. Time has brought department stores back to the pack. The weakest will merge or fall.</p><img src="https://counter.theconversation.com/content/85527/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Matthew Bailey does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Department stores created many of the familiar aspects of modern retailing, from off-the rack clothing to loyalty cards. But much of their business has been taken by others.Matthew Bailey, Lecturer, Retail History, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/839872017-09-26T16:43:59Z2017-09-26T16:43:59ZHere’s why South Africa’s online shoppers keep coming back for more<figure><img src="https://images.theconversation.com/files/185822/original/file-20170913-23154-1d3reon.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Online retailing is a relatively new phenomenon and a small element of retailing in Africa.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>Online shopping is becoming ubiquitous in many parts of the world. The internet today enables retailers to open online and serve customers at any time of the day without the need for them to visit a physical store.</p>
<p>This is especially true in countries like China, the US and the UK, which <a href="https://www.business.com/articles/10-of-the-largest-ecommerce-markets-in-the-world-b/">lead the pack</a> when it comes to e-commerce. Globally, e-commerce is a trillion-dollar industry and <a href="http://www.emarketer.com/Article/Global-B2C-Ecommerce-Sales-Hit-15-Trillion-This-Year-Driven-by-Growth-EmergingMarkets/1010575">online retailing</a> is a major part of it.</p>
<p>Online retailing is a relatively new phenomenon and still a small element of total retailing in Africa. In South Africa, for instance, <a href="http://mybroadband.co.za/news/business/105151-big-money-behind-online-shopping-in-south-africa.html%20http://mybroad%20band.co.za/news/business/105151-big-money-behind-online-shopping-in-south-africa.html">total online sales</a> in 2016 were estimated at <a href="https://www.moneyweb.co.za/in-depth/ecommerce/growth-of-ecommerce-in-sa-still-exceptionally-high/">R9 billion</a> which was only 1% of <a href="http://www.worldwideworx.com/retail2016/">total retail sales</a>.</p>
<p>The <a href="http://www.itnewsafrica.com/2017/03/nigeria-leads-africas-7-highest-internet-using-countries/">rapid penetration</a> of internet technologies around the continent provides hope for e-commerce’s continued growth. Firms that want to enter the online retailing market must learn and develop strategies that will help them benefit from this growth.</p>
<p>I undertook a <a href="http://www.tandfonline.com/doi/full/10.1080/20421338.2016.1222752">study</a> that looked at various factors that influence customer attitudes towards online stores. It focused on existing online shoppers from South Africa’s Gauteng province, which is the country’s economic powerhouse. There were 201 respondents in the study. All were older than 18 and from the middle- to upper-income groups according to the <a href="http://www.saarf.co.za/lsm/lsms.asp">South African Living Standard Measure</a>. 98 were men and 103 were women. </p>
<p>The respondents completed a structured questionnaire. They gave answers on a scale from 1 (strongly disagree) with a statement to 5 (strongly agree). The customers were asked to have a specific online store in mind when answering the questions.</p>
<h2>The findings</h2>
<p>The findings showed that customers, in general, were positive about the online retail stores they were using. Four main factors influenced their attitudes and intentions to shop at a particular online store again. These were: </p>
<ol>
<li><p>Store offerings: Denoted by the choice of products and the price at which the products are offered, this emerged as the main source of customer value associated with a store. Customers rate an online store’s offering as high when they are happy with the type and quality of products on offer as well as the price at which these are offered.</p></li>
<li><p>Navigation aids: This refers to website elements that help shoppers to easily find what they are looking for. Navigation aids can make online store visits easy and encourage shoppers to take desirable action like visiting more pages associated with an online store and purchasing products. Examples of online store navigation aids include a good site map, a FAQ (frequently asked questions) section and a built in search facility.</p></li>
<li><p>Security concerns: Online shopping entails sharing of personal information, including credit card details and many respondents were anxious about the security of such information. They worry about data breaches and the possibility of their personal information ending up in the hands of hackers or other unauthorised people. </p></li>
<li><p>Fulfilment reliability: this refers to dependability in the way in which online shopping orders are processed. It is about having the right products delivered to customers within stipulated time frames.</p></li>
</ol>
<h2>Implications for retailers</h2>
<p>Online retailers need to realise that not everyone who has access to internet is a potential customer. Segmentation and target marketing is key to ensuring that customers are satisfied with an online store’s offering. When this is properly done, it will help an online store to stock products and implement pricing strategies that will have high appeal to the target market. </p>
<p>It’s also important to give serious attention to online store design issues. They need to provide good navigation aids to facilitate the provision of access and search convenience. Ease of navigation is critical to enhancing any online customer’s shopping experience. </p>
<p>Thirdly, online retailers need to appreciate that their customers are likely to have some security concerns. Online retailers have a duty to help ensure their customers’ security by keeping up to date with technological developments in this area and using the best security systems available. </p>
<p>The study’s findings about order fulfilment show how important it is to invest in a good order processing system. Customers need a clear indication of when they can expect their orders. If there are any delays customers must be informed in good time to quell their anxiety. Online retailers should invest in order tracking services so customers can easily follow the progress of their orders. </p>
<p>It is worth noting that focusing on these four factors – store offerings, navigation aids, security concerns and reliability in order fulfilment – can encourage customers to repurchase from the same store. Any online retailer must work not just to acquire new customers, but to retain existing ones.</p>
<h2>Limitations and future studies</h2>
<p>All these findings must be understood bearing in mind that the study had some limitations.</p>
<p>It was based on a sample of respondents drawn from Gauteng, which is South Africa’s most urbanised province. This means the findings may not be generalised to all parts of the country. </p>
<p>Secondly, it looked at online stores in general rather than those in a particular industry. This means that any industry differences in factors that influence attitude towards online stores could not be established. </p>
<p>Future studies may include samples drawn from different parts of the country or the continent as well as aim at establishing industry differences or similarities by focusing on retailing within a single or a few industries.</p><img src="https://counter.theconversation.com/content/83987/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mercy Mpinganjira receives funding from University of Johannesburg. </span></em></p>The rapid penetration of internet technologies in Africa provides hope for e-commerce’s continued growth. Potential online stores need to understand what draws or pushes customers away.Mercy Mpinganjira, Professor, Director: School of Consumer Intelligence and Information Systems, University of JohannesburgLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/810832017-07-17T02:51:03Z2017-07-17T02:51:03ZGetting rid of plastic bags: a windfall for supermarkets but it won’t do much for the environment<p>Moves by major supermarkets to stop providing free plastic bags could earn these businesses more than A$1 million a year, but may only have a small impact on the environment. </p>
<p>Australia’s two supermarket giants, <a href="http://www.abc.net.au/news/2017-07-14/woolworths-to-phase-out-plastic-bags-around-the-country/8709336">Woolworths and Coles</a>, have announced that their stores will stop offering their regular plastic bags within 12 months. Instead, customers will be able to buy a more durable plastic bag at 15 cents apiece, or simply bring their own.</p>
<p>These bags are factored into the cost of doing business for these supermarkets. There are costs beyond just the bags themselves, such as the costs associated with sourcing and negotiating with packaging suppliers, procuring them, shipping and warehousing them, and distributing them to stores only to then give them away.</p>
<p>Supermarket margins are already feeling the strain of price deflation. These businesses are generally <a href="https://theconversation.com/why-australian-supermarkets-continue-to-look-to-the-uk-for-leadership-71562">making less than 6c in the dollar</a>, so the opportunity to phase out this cost certainly makes good business sense. The table below provides an estimate of current costs.</p>
<p><strong>Estimated current costs</strong></p>
<iframe src="https://datawrapper.dwcdn.net/nCISJ/1/" scrolling="no" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="134"></iframe>
<p>While retailers stand to pocket this saving, the switch to stronger, multi-use plastic bag brings with it its own costs. To begin with, the bags alone cost more (9c each) and also have associated procurement costs.</p>
<p>However, the new scheme will immediately reduce customers’ bag usage. Being optimistic, it would be reasonable to see an 80% decline in plastic bag use as shoppers actively search for alternatives to free bags. </p>
<p>Most shoppers will probably reuse the 15c bag, or look to other options like canvas bags, polyethylene bags or cardboard boxes. In turn, while the new re-usable bag may cost more than the thinner single-use bag, fewer will be used and therefore ordered. Retailers can expect to see a reduction in these packaging costs.</p>
<p><strong>Estimated costs under new scheme</strong></p>
<iframe src="https://datawrapper.dwcdn.net/8EiSX/2/" scrolling="no" frameborder="0" allowtransparency="true" allowfullscreen="allowfullscreen" webkitallowfullscreen="webkitallowfullscreen" mozallowfullscreen="mozallowfullscreen" oallowfullscreen="oallowfullscreen" msallowfullscreen="msallowfullscreen" width="100%" height="134"></iframe>
<p>It’s estimated that Australian retailers <a href="http://www.abc.net.au/science/features/bags/">give away 6 billion plastic bags each year</a>. Woolworths alone say they provide <a href="https://www.woolworthsgroup.com.au/page/media/Latest_News/woolworths-group-announces-move-away-from-single-use-lightweight-plastic-shopping-bags-nationwide/">3.2 billion each year</a>. Coles has not provided an estimate of bag use, but claim to process <a href="https://www.google.com.au/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0ahUKEwjsusHeyorVAhUDlpQKHX13BXkQFggqMAE&url=https%3A%2F%2Fwww.coles.com.au%2F%7E%2Fmedia%2Ffiles%2Fcoles%2Fpdfs%2F2016%2Fannual%2520report%2Fcoles_year_in_review_2016.pdf&usg=AFQjCNHXb44vuwMpb6jiosd7M-qSalqrgQ">21 million transactions each week</a>. With fewer stores than Woolworths, I estimate that Coles may give away up to 2.7 billion bags annually.</p>
<p>With each bag costing almost 3c, retailers stand to save more than A$170 million a year in direct costs. Selling these new bags at 15c each effectively creates another revenue stream potentially adding up to A$71 million in gross profit (6c x 1.18 billion units).</p>
<h2>It might not actually reduce bags</h2>
<p>In 2013, Target <a href="https://theconversation.com/targets-plastic-bag-backdown-a-loss-for-the-silent-majority-18794">reverted back to providing free plastic bags</a> after three years of charging 10c per bag. Other than hardware retailer Bunnings, no other large retailer has initiated a voluntary ban on single-use plastic bags. </p>
<p>Some Australian state and federal governments have been pushing for single-use plastic bag ban for almost 10 years. South Australia was the first to ban plastic bags from supermarkets in 2009, followed by the ACT in 2010, Northern Territory in 2011 and Tasmania in 2012. </p>
<p>In 2016 the Queensland Government <a href="https://cabinet.qld.gov.au/documents/2016/Jul/Pbags/Attachments/Paper.PDF">released a discussion paper</a> on the proposed ban. It is predicted all states will fall into line by mid-2018. </p>
<p>The past impact of applying a charge to the use of plastic bags has provided positive, but mixed results. In Australia, <a href="https://cabinet.qld.gov.au/documents/2016/Jul/Pbags/Attachments/Paper.PDF">Bunnings reported an 80% reduction</a> after implementing a charge for plastic bags, while a 2008 trial undertaken in three Victorian regional towns by Coles, Woolworths and IGA resulted in a 79% reduction. </p>
<p>In 2002, Ireland <a href="http://www.irishtimes.com/news/plastic-bag-levy-to-rise-to-22-cent-1.803547">applied a 15 pence (22c) charge</a> to single-use plastic bags, claiming a 90% reduction within 6 months (this was before the transition to the euro currency in the same year). Then in 2007 it increased the charge to 22 euro cents (32c) in response to increased bag usage. Sadly, shoppers had become conditioned to the 15p charge and returned to their old habits. </p>
<p>The UK government likewise reported an 85% reduction in single-use plastic bags in the first 6 months after <a href="https://www.theguardian.com/environment/2016/jul/30/england-plastic-bag-usage-drops-85-per-cent-since-5p-charged-introduced">a 5p charge (8c) was implemented</a> in 2015. Similar results have been reported in the US, with <a href="https://static1.squarespace.com/static/54d3a62be4b068e9347ca880/t/57dc50aae6f2e1bd882d91a2/1474056363151/Merged+Plastic+Bag+Impacts+and+Bag+Ban+Results.pdf">a 94% reduction</a> in Los Angeles County from the introduction of a charge for bags. </p>
<p>In the above cases (excluding Australian examples), single-use bags were still available, however a levy was applied, creating revenue for governments to channel back into environmental programs. This model is not the planned approach for Australia, were all single-use bags will be replaced with either the heavy duty (>35 micron, LDPE) option at 15c or the “green” polyethylene bag. </p>
<h2>Charging for bags has minimal impact on the environment</h2>
<p>Unfortunately, introducing a charge for bags doesn’t help the environment in isolation. While plastic bags represent only <a href="http://www.epa.nsw.gov.au/resources/waste/160143-plastic-shopping-bags-options.pdf">about 2% of landfill</a>, there is certainly <a href="https://www.csiro.au/en/Research/OandA/Areas/Marine-resources-and-industries/Marine-debris">sufficient scientific evidence</a> that plastic bags do present risks to marine life and clog waterways. </p>
<p>However, simply charging for a plastic bag, without directing these funds into environmental programs, does not necessarily resolve the problem. Shoppers slowly return to old habits, governments and retailers stop educating consumers and re-usable bags soon make their way into water ways and landfill. </p>
<p>Some shoppers simply forget to bring re-usable bags with them. The <a href="http://www.telegraph.co.uk/goodlife/11773047/The-hidden-dangers-of-plastic-bags.html">UK Department for Environment, Food and Rural Affairs found</a> that the average UK household had 40 plastic bags stashed away around the home. Also a South Australian parliamentary review found that only about 30% of shoppers <a href="http://www.adelaidenow.com.au/news/south-australia/plastic-bag-use-still-rife-despite-south-australias-shopping-bag-ban/news-story/a02398d8295da04dcbe04b5343377186?sv=467d4722e2060125ce98c7a555a90d2f">actually recycled their re-usable bags</a>.</p>
<p>In the US, studies indicated 40% of shoppers continued to use disposable bags, <a href="https://theconversation.com/paper-or-plastic-how-disposable-bag-bans-fees-and-taxes-affect-consumer-behavior-48858">despite a 5 cent levy</a>.<br>
Moving to a reusable option also doesn’t stop people discarding these new bags either. <a href="http://www.austintexas.gov/edims/document.cfm?id=232679%20p20-21">Another US study</a> found many people still threw away reusable bags. </p>
<p>Ultimately, “banning the bag” is only the beginning. Retailers will need to remedy customer complaints as the phasing out of plastic bags begins.</p>
<p><a href="https://www.theguardian.com/environment/2016/jul/30/england-plastic-bag-usage-drops-85-per-cent-since-5p-charged-introduced">Like UK retailers</a>, Australian supermarkets could choose to funnel some of the profits derived from the 15c reusable bag into community programs or environmental groups. Australian governments will also need fund ongoing education campaigns to draw attention to bans, alternatives and outcomes.</p><img src="https://counter.theconversation.com/content/81083/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gary Mortimer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Moves by major to supermarkets to only offer plastic bags for a charge could make these businesses more than a million dollars a year, but it may only have a small impact on the environment.Gary Mortimer, Associate Professor, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/753822017-03-29T19:20:29Z2017-03-29T19:20:29ZAmazon in Australia might not be the end of retail as we know it<p>After months of teasing, Amazon will reportedly “<a href="http://www.smh.com.au/business/retail/amazon-lays-out-australian-commitment-20170324-gv5puo.html">greatly expand</a>” its online offer in Australia over the next year. The move has been predicted to “<a href="http://www.heraldsun.com.au/business/amazon-plans-to-decimate-australian-retailers/news-story/e8a48ce155af2f21230048ece6d06e81">decimate retailing as we know it</a>”, but the sky will not fall in. Our shopping centres won’t close and retail will survive. </p>
<p>Amazon has not committed to opening physical stores in Australia, and it recently announced a <a href="https://www.wsj.com/articles/amazon-delays-convenience-store-opening-to-work-out-kinks-1490616133?mod=pls_whats_news_us_business_f">temporary hold</a> to the rollout of its Amazon Go convenience stores. With no physical stores, Australia represents a very small market for the retail giant. </p>
<p>Shoppers in Australia <a href="http://business.nab.com.au/nab-online-retail-sales-index-indepth-report-december-2016-22325/">spent just A$21.65 billion online in 2016</a>. While that may seem significant, it only represents 7.1% of what was spent in “bricks and mortar” shops. And as a result of a weak Australian dollar, 80% of the money spent online last year was with Australian retailers and online shops. </p>
<p>Meanwhile, <a href="https://www.usnews.com/news/articles/2016-12-20/with-online-sales-booming-is-brick-and-mortar-on-the-way-out">US$117 billion was spent online in the US last year</a> and £133 billion <a href="https://www.ons.gov.uk/businessindustryandtrade/retailindustry/bulletins/retailsales/jan2017">was spent online in the UK</a>. </p>
<p>But ecommerce is also not the juggernaut it was. Globally, growth of online shopping has slowed as department stores, supermarkets and <a href="http://www.smartcompany.com.au/industries/retail/bunnings-uk-shoppers-get-online-store-hasnt-hardware-chain-ever-started-one-australia/">other retailers</a> saturate this channel. Even in markets where Amazon features services like Amazon Fresh (groceries), Amazon Prime (free shipping and streaming) and Prime Now (express delivery), <a href="http://phx.corporate-ir.net/phoenix.zhtml?c=97664&p=irol-newsArticle&ID=2241835">sales growth has slowed</a>.</p>
<h2>The challenges</h2>
<p>There are also other challenges for Amazon trying to conquer the Australian market. Consumer habits, perceptions of risk, market size and distribution among them.</p>
<p>Shoppers are <a href="http://www.sciencedirect.com/science/article/pii/S1057740809001065">creatures of habit</a>. We generally shop with the same retailers, buy the same brands and spend a similar amount of money every month. <a href="https://www.researchgate.net/publication/289983043_Online_grocery_shopping_the_impact_of_shopping_frequency_on_perceived_risk">Research</a> has demonstrated that infrequent online shoppers will continue to be infrequent online shoppers. Non-users will continue to be non-users.</p>
<p>Many consumers still avoid online shopping, <a href="https://www.researchgate.net/publication/289983043_Online_grocery_shopping_the_impact_of_shopping_frequency_on_perceived_risk">concerned</a> about credit card fraud, quality and returns policies. Not being able to touch and try on before purchasing <a href="http://www.pitneybowes.com/au/global-ecommerce/case-studies/global-online-shopping-study.html">presents a real barrier to ecommerce</a>, as do long delivery times, delivery fees and currency fluctuations.</p>
<p>As far as online grocery shopping is concerned, <a href="http://www.roymorgan.com/findings/7076-australians-yet-to-embrace-online-grocery-shopping-201612060915">research</a> has shown that only 3% of consumers shop online for their food and groceries. And this market is already well serviced by a wide variety of players, from Coles and Woolworths through to pure-play online grocers like <a href="https://www.aussiefarmers.com.au/">Aussie Farmers Direct</a>, <a href="https://www.groceryrun.com.au/">Grocery Run</a> and <a href="https://www.kogan.com/au/shop/pantry/">Kogan Pantry</a>. Amazon will need to come to this market with a significant offer to convince this small group of incumbent shoppers to switch.</p>
<p>The online purchase of clothing, footwear and accessories has increased substantially in the Australian market, <a href="http://business.nab.com.au/nab-online-retail-sales-index-indepth-report-december-2016-22325/">representing</a> 16% of sales in physical stores. These sales have been driven through establish brands, discount department stores, global entrants and pure-play retailers like Net-a-Porter, Shoes of Prey and The Iconic. But many of these businesses may also choose to sell their wares through the Amazon “<a href="https://www.amazon.com/b?node=8296344011">marketplace</a>”, which would mean no significant loss of sales to brands, but simply a switch between channels.</p>
<p>Amazon competes not just on price and product range but also free or speedy delivery. While Amazon Prime and Amazon Prime Now might work well in the US or UK, due to the large and concentrated populations in some areas, it will be more challenging in Australia. Less than half of us live in the three major capital cities and even these areas may not be economical to service in this fashion. Just look at the <a href="http://www.theiconic.com.au/lp-express-delivery-3-hour/">restricted delivery areas</a> of the ecommerce sites already established. </p>
<h2>Retailers need to adapt</h2>
<p>Consumer electronics and toy retailers may be the most exposed to Amazon’s arrival. When you are shopping for toys it matters little whether you are buying through Amazon or Big W, it simply comes down to price. With its economies of scale, Amazon will win on price. Similarly, consumer electronics. A digital camera is a digital camera, whether it’s purchased through Harvey Norman or Amazon. </p>
<p>But as it stands, Amazon still appears a way off. Operationally, there is little indication of Amazon setting up warehouses and other infrastructure, or recruiting pickers and drivers needed for such a large operation. Although all of this is set to happen, we are told, in the next few months. </p>
<p>Ultimately, Amazon won’t kill Australian retail. Australian retail will kill itself if it doesn’t adapt to an ever changing consumer and focus on experience over price. </p>
<p>We need to see more technology like <a href="https://www.pwc.com/us/en/retail-consumer/publications/assets/pwc-insights-technology-breakthroughs.pdf">iBeacon</a>, which allows physical retailers to use customers’ phones to deliver customised experiences. This has already been <a href="http://www.cmo.com.au/article/586876/latest-beacon-trials-aimed-tailoring-retail-offers-assisting-prospective-students/">trialled</a> at a shopping centre in Sydney. And as Amazon will provide a platform for brands to sell direct to the market, the brands we trust will become more important. So smart pure-play retailers, like Kogan and Catch of the Day have moved quickly to buy brands like <a href="http://www.afr.com/business/retail/catch-group-to-relaunch-pumpkin-patch-after-buying-ip-20170322-gv3xtl">Pumpkin Patch</a> and <a href="http://www.abc.net.au/news/2016-03-15/kogan-buys-dick-smith-online-business/7247136">Dick Smith</a>. In doing so, locking these well known brands away.</p><img src="https://counter.theconversation.com/content/75382/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gary Mortimer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>After a lot of hype, it looks like Amazon will finally come to Australian shores. But it won’t be the end of Aussie retail.Gary Mortimer, Associate Professor, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/726442017-03-07T19:24:04Z2017-03-07T19:24:04ZContested spaces: you can’t stop the music – the sounds that divide shoppers<figure><img src="https://images.theconversation.com/files/159061/original/image-20170302-5504-12rga5c.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">When they hear the music, some people want to dance. Other shoppers want to flee.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/jmarty/2116501096/in/photolist-4e2C3d-pqc27e-sryATK-8oZnm3-FRQfnv-74r7Ld-9EFWRq-d5Cpi9-7bDupA-oJhDHH-nDCvey-jV3CQH-gz1iag-9Cmud2-c8wCWb-cdTQoq-a473KK-8vyHpC-csFj5j-gezE1D-qw6V5m-by8nJ9-92hS7f-djfa46-bjKzNz-ecajo4-fc3Rxp-qmQcz8-cNwztA-8CMwZ3-2F8zHA-h6j3hC-cR6Vtj-8Vazh4-gCo6Jk-cNgZaL-cNwD35-edatti-fU3uGz-ni6bYb-fTZUJr-92eKik-fxYVmv-fnk9qx-pUGRo7-a9JBEM-gDKEPu-cXwics-4V54ua-6ovXhu">Justin/flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p><em>This is the third article in our <a href="https://theconversation.com/au/topics/contested-spaces-36316">Contested Spaces</a> series. These pieces look at the conflicting uses, expectations and norms that people bring to public spaces, the clashes that result and how we can resolve these.</em></p>
<hr>
<p>Sound is everywhere. In urban areas, it forms part of how we feel about and negotiate various social settings. </p>
<p>The space we focus on here is the retail environment. Based on interviews with shoppers about the kinds of music and sounds encountered, we are examining how and why the acoustic dimension can either heighten or diminish the shopping experience.</p>
<p>When successful, music in retail spaces stimulates positive corporeal and other sensory responses in shoppers. The other side of the coin is that a majority of interview participants reported unpleasant musical experiences in retail situations. </p>
<p>Interviewees who liked to hear music when shopping reported that it added a sense of rhythm to what they were doing. It made the experience feel more dynamic or lively than otherwise might have been the case. </p>
<p>Some shoppers reported being so energised by the music that they worried they might engage in conspicuous behaviour such as dancing, singing and other conduct not usually found in retail settings. One participant said she was so responsive and captive to music in the shops that she feared being considered a “public weirdo” by retail staff and other shoppers.</p>
<p>Those who had negative responses to music included consumers who sensed that the music played in certain stores was “discriminatory”. This was because it seemed aimed at particular gender or age groups that excluded them.</p>
<p>Volume was another important source of disquiet. The greater the volume, the greater the imposition these shoppers felt. </p>
<p>Some shoppers avoided altogether “noisy” or “loud” retail spaces. Others reported getting through the shopping experience faster than they would have liked. And some resorted to the “privatisation” of their aural experience by using personal musical devices.</p>
<h2>In what ways does music offend?</h2>
<p>But why should music and sound be contentious in retail settings? There is a long history of people using music and sound to augment the experiences of events like festivals, community and religious celebrations, as well as markets and fairs.</p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/159059/original/image-20170302-5538-1ngmm75.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/159059/original/image-20170302-5538-1ngmm75.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/159059/original/image-20170302-5538-1ngmm75.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=600&fit=crop&dpr=1 600w, https://images.theconversation.com/files/159059/original/image-20170302-5538-1ngmm75.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=600&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/159059/original/image-20170302-5538-1ngmm75.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=600&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/159059/original/image-20170302-5538-1ngmm75.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=754&fit=crop&dpr=1 754w, https://images.theconversation.com/files/159059/original/image-20170302-5538-1ngmm75.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=754&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/159059/original/image-20170302-5538-1ngmm75.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=754&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Some shoppers may feel music is part of a retail strategy to manipulate them into buying more.</span>
<span class="attribution"><a class="source" href="https://pixabay.com/en/speakers-announcement-213232/">pixabay</a></span>
</figcaption>
</figure>
<p>One possibility is that consumers are concerned that retail atmospheres are designed to manipulate them into buying things <a href="http://journals.sagepub.com/doi/abs/10.1177/0013916503254749">through music</a> and other forms of sensory conditioning, such as lighting, smell, temperature and colour schemes. However, this doesn’t really explain why some consumers reported feeling dislocated or not “at home” in retail environments. </p>
<p>Music and sound can often offend shoppers for other reasons, we suggest. Following the insights of microsociologist <a href="https://books.google.com.au/books/about/The_Presentation_of_Self_in_Everyday_Lif.html?id=Sdt-cDkV8pQC">Erving Goffman</a>, we think the acoustic environment of retail shopping is a complex “<a href="http://www.jstor.org/stable/2095141?seq=1#page_scan_tab_contents">interaction order</a>”, which is more fragile than we realise. </p>
<p>We contend that music and sound can impinge upon what Goffman termed the “<a href="https://books.google.com.au/books?id=ApSW54vTsYwC&pg=PA28&source=gbs_selected_pages&cad=3#v=onepage&q&f=false">territories of the self</a>”. This refers to the physical and mental space that the individual expects others will provide to them. Thus, music that is perceived as “noisy”, “loud” or “annoying” – as reported by the interview subjects – threatens the boundaries that the individual seeks to protect, and expects others will observe.</p>
<p>Unlike vision or touch, sound is much more difficult to control or protect oneself one from; sound spills across thresholds and enters into situations where it is unwelcome. </p>
<p>Equally, when interview subjects reported annoyance at retail environments starting to resemble nightclubs or pubs, they were highlighting concerns about what Goffman called “<a href="http://onlinelibrary.wiley.com/doi/10.1002/9780470674871.wbespm092/abstract">frame disputes</a>”. Music can counteract “situationally appropriate” framing, if the shopper comes to feel that the acoustic environment is not providing the right scripts, cues or definition of the situation.</p>
<h2>Can and should retailers stop the music?</h2>
<p>So how might retailers respond to the kind of “territorial offences” that some of our interview subjects identified? </p>
<p>Some have reacted to the frictions generated by sound, and other types of sensory overload, by introducing “quiet hour shopping”. As one Adelaide <a href="http://www.glamadelaide.com.au/main/silence-frewville-foodland-to-host-quiet-hour-shopping-this-tuesday/">lifestyle website</a> reported, at Frewville Foodland:</p>
<blockquote>
<p>The lights will be dimmed, music and pager messages switched off, volume of the ‘beeps’ on the check-outs lowered, there will be no coffee grinding and strong smells will be reduced where possible. </p>
</blockquote>
<p>We applaud attempts to creatively redesign the shopping experience and to provide consumers with sensorially enriched retail environments. However, we would caution against simplistic understandings of the impacts of sound on the retail experience; nor do we condone seeing music and sound as something that should be avoided. </p>
<p>It is true that humans possess a limited capacity to process auditory information. At worst, this leaves scope for exploitation in the form of <a href="https://www.thenation.com/article/disco-inferno/">sonic torture</a> and <a href="https://theconversation.com/friday-essay-the-sound-of-fear-65230">sonic weaponry</a>. But it is also true, as our respondents reported, that music and sound can enrich experiences by enhancing the mood, tempo and liveliness associated with certain activities. </p>
<p>The last thing we want is for all retail spaces to sound the same. As experimental composer and Zen Buddhism practitioner <a href="https://books.google.com.au/books?id=1ECundMF9xAC&printsec=frontcover&dq=Silence+JOhn+cage&hl=en&sa=X&ved=0ahUKEwj-4pXpyrbSAhWMXbwKHbYtC0sQ6AEIJTAC#v=onepage&q=make%20a%20silence&f=false">John Cage noted</a>:</p>
<blockquote>
<p>There is no such thing as an empty space or an empty time. There is always something to see, something to hear. In fact, try as we may to make a silence, we cannot.</p>
</blockquote>
<p>We tend to be annoyed because, when we bump into them in the supermarket aisle, sounds don’t say “excuse me”. However, if Cage is right and there is no such thing as a silent retail space, we might as well as learn to share supermarket aisles with sounds beyond our control and sounds not on our playlists.</p>
<hr>
<p><em>You can read other pieces in the series as they are published <a href="https://theconversation.com/au/topics/contested-spaces-36316">here</a>.</em></p><img src="https://counter.theconversation.com/content/72644/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Unlike vision or touch, sound is much more difficult to control or avoid; music in particular spills across thresholds and intrudes into situations where it is unwelcome.Michael James Walsh, Assistant Professor of Social Science, University of CanberraEduardo de la Fuente, Senior Lecturer in Creativity and Innovation, James Cook UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/699362016-12-19T02:23:59Z2016-12-19T02:23:59ZBrick-and-mortar retailers should nix deep discounts to make most of jittery shopping season<p>Brick-and-mortar retailers have been on a bit of a roller coaster ride this holiday season as early expectations of strong consumer spending were weighed down by the uncertainty prompted by the election. </p>
<p>That’s on top of the usual jitters about the slow demise of Black Friday and more consumer cash gravitating to online retail. </p>
<p>That has made projections about this year’s holiday shopping season <a href="http://time.com/money/4551914/2016-holiday-shopping-season-deals-trends-sales/">more of a guessing game than usual</a>, but one aspect has now become clear: The rush by retailers to deeply discount merchandise will likely not prove to be beneficial to these retailers in the long term. </p>
<p><a href="http://link.springer.com/article/10.1007/s11747-015-0467-0">My research in “business to business” marketing suggests</a> that instead of enacting ever-steeper price cuts that erode margins, both major retailers like Macy’s and small mom-and-pop stores would be much better off leveraging their physical presence as a source of strength rather than weakness by focusing on the personal touch that only they can provide. </p>
<h2>From robust to jittery</h2>
<p>Prior to the elections, analysts were predicting <a href="https://www.bostonglobe.com/business/2016/10/04/holiday-sales-expected-percent/TzM3EZ0dj1Cxh0k2ZBAwdP/story.html">robust</a> holiday shopping with spending expected to increase by 3.6 percent amid a strengthening economy. </p>
<p>It was a smart guess. Even though income remains unevenly distributed, <a href="http://www.wsj.com/articles/u-s-nonfarm-payrolls-rose-178-000-in-november-unemployment-rate-4-6-1480685541?mod=djemalertMARKET">unemployment has fallen</a>, the <a href="https://www.statista.com/statistics/200463/us-poverty-rate-since-1990/">poverty rate has dropped</a> and housing prices <a href="http://www.wsj.com/articles/u-s-home-prices-set-a-record-in-september-case-shiller-says-1480428083">have mostly recovered</a>. Thus, economic factors were looking positive for the holiday retail market.</p>
<p>Then Donald Trump was elected as U.S. president. Immediately, shoppers <a href="http://www.cnbc.com/2016/11/18/shoppers-cut-back-their-spending-in-days-after-the-election.html">cut back</a> spending, and some predicted <a href="http://adage.com/article/cmo-strategy/trump-win-means-holiday-sales/306683/">a drop</a> in purchases of big-ticket items due to the uncertainty. Pundits even said that “<a href="http://www.usatoday.com/story/money/2016/11/09/after-election-some-consumers-no-mood-shop-holiday/93550176/">post-election trauma</a>” meant consumers were too depressed, worried or stressed to shop.</p>
<h2>The shift online</h2>
<p>Another complication for retailers is the continued upending of traditional shopping patterns. </p>
<p>Some analysts have even been predicting the <a href="http://www.businessinsider.com/black-friday-is-dying-a-slow-death-2016-11">demise of Black Friday</a>, once touted as the most important shopping day of the year for physical retailers. The Wall Street Journal <a href="http://www.wsj.com/articles/retailers-vie-for-black-friday-dollars-1480071604">reported</a> that in-store sales on the Friday after Thanksgiving appear to have declined this year, quoting a retail analyst as saying that in 40 years, “I’ve never seen the crowds this soft on Friday morning.” </p>
<p>But the data suggest we’re probably not seeing the death of Black Friday. Rather, why should consumers venture out? If all that was being touted by physical retailers was price discounts, all the real deals – and there were many – were available online. <a href="http://www.usatoday.com/story/money/2016/11/27/online-sales-overshadow-stores-4-day-shopping-frenzy/94510322/">USA Today reported</a> that 44 percent of consumers shopped online during the four-day span of the Thanksgiving holiday, a 4.2 percent increase from 2015. And Black Friday online sales jumped 22 percent to US$3.34 billion, breaking $3 billion for the first time. </p>
<h2>The power of the personal touch</h2>
<p>So what can brick-and-mortar retailers do to attract customers? </p>
<p>Certainly not offer more deals – you can’t beat the ease of online comparison shopping. But many retailers, fearing the worst, seem to <a href="http://www.wsj.com/articles/inventory-check-we-went-to-the-stores-1480701344">have gone overboard</a> with discounting, even though all the same deals were available online. </p>
<p>So even as consumers were <a href="http://www.cnbc.com/2016/11/27/black-friday-deals-pulled-in-more-shoppers-but-they-spent-less-nrf-data-shows.html">filling their baskets</a> over Black Friday weekend, they may have been spending less due to the multitude of deals. </p>
<p>Having already given deep discounts, retailers should hold the line on additional cuts. Those discounts may be good for customers, but they come at the cost of retailer margins. With repeated discounts, consumers learn to postpone buying in anticipation of imminent deals, leading to a vicious cycle of discounts and deal-buying.</p>
<p>Instead, retailers <a href="http://link.springer.com/article/10.1007/s11747-015-0467-0">should employ the human touch</a> – since <a href="https://faculty.fuqua.duke.edu/%7Emela/bio/papers/Ataman_Mela_Van_Heerde_2006.pdf">research shows</a> that discounting is not likely to help much in the long term – and create a holiday atmosphere that gets consumers in the festive mood. Personal shopping assistants who actually talk to shoppers and share ideas and expert advice make the experience more special and enjoyable, as does hiring local musicians to play and entertain those waiting in long lines.</p>
<p>In other words, physical retailers can stand out by selling the “experience” of the holiday – something you can’t get with a smartphone or computer. By focusing on crafting the best possible customer experience, retailers <a href="http://www.mmaglobal.org/publications/MMJ/MMJ-Issues/2005-Spring/MMJ-2005-Spring-Vol15-Issue1-Chatterjee-Chaudhuri-pp1-16.pdf">can better build brand trust</a> and make it more likely shoppers will choose to come back rather than shift their purchases online. </p>
<h2>Growth and uncertainty</h2>
<p>In general, retailers face two competing forces this holiday season: generally positive economic news and feelings of uncertainty and unease that prevent these consumers from opening their wallets much. Basically things are better, but many people don’t necessarily feel better.</p>
<p>Right after the election, the force of uncertainty was dominant. By Thanksgiving, the pendulum of public perception seemed to have swung the other way. Thus, in my view, it is increasingly likely that we will see that predicted 3.6 percent increase in consumer spending this holiday season. </p>
<p>Brick-and-mortar outlets can share that bounty by going beyond the discount to creating a full shopping experience. Still, as we have learned this year, perceptions can be fickle and could shift before the New Year.</p><img src="https://counter.theconversation.com/content/69936/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sharmila C. Chatterjee does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>A mix of economic unease and fears of the growth of online shopping is pushing retailers to offer ever-steeper discounts, but there’s a better strategy to make it through the holidays in the black.Sharmila C. Chatterjee, Academic Head, Enterprise Management Track; Senior Lecturer, Marketing, MIT Sloan School of ManagementLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/639352016-08-22T00:29:26Z2016-08-22T00:29:26ZThe Panopticons are coming! And they’ll know when we think the grass is greener<figure><img src="https://images.theconversation.com/files/134712/original/image-20160819-12292-1ht8iqa.png?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Tracking what you stop to pay attention to and what you 'don't see' can tell us a lot about what might be going on inside your mind.</span> <span class="attribution"><span class="license">Author provided</span></span></figcaption></figure><p>Does a walk in the park during your lunch break make you feel relaxed? Does lush greenery or a glint of sunlight on running water catch your eye and allow you to stare and rest your brain? </p>
<p>We recently turned our attention to these questions when we asked park users in the City of Melbourne to view films of walks. </p>
<p>We used eye tracking – a technology that allows us to look deeply into exactly what you are looking at or paying attention to. Eye trackers follow your gaze as you look naturally around a scene. We see where your eye dwells and what things you skip over. </p>
<p>Where you stop is called a fixation and where the eye darts around is called a saccade. During saccades the eye is effectively blind. Watching what you stop to pay attention to and what you “don’t see” can tell us a lot about what might be going on inside your mind – what is driving your eyes to move about the way they do.</p>
<p>What you see can affect where you go, what you buy and how prone you are to accidents.</p>
<p>In addition, park designs have been shaped by a number of theories.</p>
<p><a href="https://en.wikipedia.org/wiki/Attention_restoration_theory">Attention Restoration Theory</a>, for example, predicts that natural scenes promote fixations, and these allow the brain to recover from extended periods of concentration. This explains why parks are relaxing.</p>
<p><a href="https://prezi.com/sydoyajztv-j/prospect-refuge-theory/">Prospect Refuge Theory</a> predicts that we feel safer when we have a clear view of a scene and so can identify potential dangers. This explains why people take certain paths and not others.</p>
<h2>Putting theories to the test</h2>
<p>Eye tracking can test these theories. In our study, 35 respondents were shown four short films of walks through Melbourne parks such as the one in this video. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/l9QTAr0xG-E?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">A walk through Royal Park was one of the videos used.</span></figcaption>
</figure>
<p>Respondents’ eye-tracking data were then overlaid with features that were automatically identified in the video, such as trees, the path and man-made objects such as lamp-posts. Our analysis required every tree, rock, shrub, pathway, seat, person and sky regions to be automatically segmented out, as shown below, and then data from these regions collated. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/134645/original/image-20160818-12284-1lzm6a2.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/134645/original/image-20160818-12284-1lzm6a2.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/134645/original/image-20160818-12284-1lzm6a2.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=318&fit=crop&dpr=1 600w, https://images.theconversation.com/files/134645/original/image-20160818-12284-1lzm6a2.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=318&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/134645/original/image-20160818-12284-1lzm6a2.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=318&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/134645/original/image-20160818-12284-1lzm6a2.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=400&fit=crop&dpr=1 754w, https://images.theconversation.com/files/134645/original/image-20160818-12284-1lzm6a2.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=400&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/134645/original/image-20160818-12284-1lzm6a2.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=400&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Each element of every frame of the video is segmented out to analyse what the viewer is looking at any moment.</span>
<span class="attribution"><span class="source">Author provided</span></span>
</figcaption>
</figure>
<p>In Royal Park, one of the drier-looking grassland-featured parks, the study showed that overwhelmingly respondents spent more time looking at man-made objects, relative to their appearance in the video. As an example, the figure below shows the proportion of different elements in the video for Royal Park. The next figure shows the relative amounts of time respondent A spent looking at those elements.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/134646/original/image-20160818-12281-10jha9k.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/134646/original/image-20160818-12281-10jha9k.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/134646/original/image-20160818-12281-10jha9k.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=318&fit=crop&dpr=1 600w, https://images.theconversation.com/files/134646/original/image-20160818-12281-10jha9k.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=318&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/134646/original/image-20160818-12281-10jha9k.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=318&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/134646/original/image-20160818-12281-10jha9k.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=400&fit=crop&dpr=1 754w, https://images.theconversation.com/files/134646/original/image-20160818-12281-10jha9k.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=400&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/134646/original/image-20160818-12281-10jha9k.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=400&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Proportion of different elements appearing in the video for Royal Park.</span>
<span class="attribution"><span class="source">Authors</span></span>
</figcaption>
</figure>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/134647/original/image-20160818-12298-r6a2d6.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/134647/original/image-20160818-12298-r6a2d6.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/134647/original/image-20160818-12298-r6a2d6.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=318&fit=crop&dpr=1 600w, https://images.theconversation.com/files/134647/original/image-20160818-12298-r6a2d6.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=318&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/134647/original/image-20160818-12298-r6a2d6.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=318&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/134647/original/image-20160818-12298-r6a2d6.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=400&fit=crop&dpr=1 754w, https://images.theconversation.com/files/134647/original/image-20160818-12298-r6a2d6.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=400&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/134647/original/image-20160818-12298-r6a2d6.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=400&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Proportion of time spent respondent A spent looking at different elements in Royal Park video.</span>
<span class="attribution"><span class="source">Author provided</span></span>
</figcaption>
</figure>
<p>On the other hand, in Fitzroy Gardens with its dense green foliage, participants spent much more time looking at the bushes. In this case man-made objects weren’t as salient. </p>
<p>This seemed to correlate with the opinions that respondents had of the parks. In our study, Fitzroy Gardens came out as the favourite park with its lush green foliage, abundant bird sounds and water features.</p>
<p>Using data in this way will allow researchers to analyse and identify what matters to users of outdoor spaces. Urban decision-makers will be able to use this information to better refine urban design, signage and safety.</p>
<h2>Observation as a means of control</h2>
<p>At the same time, with eye trackers becoming cheaper and more ubiquitous, the collection of this kind of data could become a double-edged sword. </p>
<p>Studying what we “eye-ball” is of keen interest to advertisers. In academic research, subjects know we are watching what they look at, as do the users of <a href="https://theconversation.com/smile-face-recognition-for-google-glass-is-here-thanks-to-hackers-16262">Google Glasses</a> or Microsoft’s <a href="https://theconversation.com/with-hololens-the-future-of-reality-is-augmented-37104">Hololens</a>. However, we may be unaware of how data from our eyes are gathered by other means, as <a href="http://www.cnet.com/au/news/no-dummy-this-mannequin-is-spying-on-you/">spying mannequins demonstrate</a> . </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/HSDtTxYxpJY?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">‘Spying’ mannequins can be used to observe us in shops.</span></figcaption>
</figure>
<p>In 1791, the English philosopher Jeremy Bentham coined the term “<a href="http://studymore.org.uk/ybenfou.htm">panopticon</a>”: an inspection house that allowed guards to see all cells in a prison, while remaining hidden from view. Although few prisons with panopticons were ever built, they became an <a href="https://www.theguardian.com/technology/2015/jul/23/panopticon-digital-surveillance-jeremy-bentham">essential concept for the analysis</a> of cities and government during the 20th century. </p>
<p>French philosopher Michel Foucault <a href="http://foucault.info/doc/documents/disciplineandpunish/foucault-disciplineandpunish-panopticism-html">argued</a> that a panopticon ably maintains social and power imbalances while using that most passive method of control: observation. As governments and private corporations increasingly use eye-tracking data, everyone can act as observers, recorders and the observed – whether they intended to or not. </p>
<p>In this sense we could argue that the increasing development of eye tracking could usher in the age of the mass panopticon. Yet, the relationship between a selfie society, an “all-seeing, all-knowing” culture and the future of eye tracking in open domains remains to be “seen”.</p>
<hr>
<p><em>Jodi Sita and Marco Amati will discuss the study findings in a presentation at the RMIT city campus from 2.30-3.30pm on Tuesday, August 23. You can register to attend <a href="https://www.eventbrite.com.au/e/the-panopticons-are-coming-applying-eye-tracking-research-in-urban-policy-tickets-26576331523">here</a>.</em></p><img src="https://counter.theconversation.com/content/63935/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jodi Sita received funding from the City of Melbourne to conduct the research from which this article has been based.</span></em></p><p class="fine-print"><em><span>Marco Amati received funding from the City of Melbourne for this work. </span></em></p><p class="fine-print"><em><span>Chris McCarthy and Ebadat Parmehr do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Eye-tracking technology helps us understand how people interact with their environment. This can improve policy and design, but can also be a tool for surveillance and control.Jodi Sita, Senior Lecturer, Faculty of Health Sciences, Australian Catholic UniversityChris McCarthy, Lecturer of Computer Science, Swinburne University of TechnologyEbadat Parmehr, Research Officer, School of Global, Urban and Social Studies, RMIT UniversityMarco Amati, Associate Professor of International Planning, Centre for Urban Research, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/532822016-01-18T04:45:42Z2016-01-18T04:45:42ZMasters was spoiled from the start, now Woolworths must go back to basics<figure><img src="https://images.theconversation.com/files/108392/original/image-20160118-13796-67g9ew.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Or not.</span> <span class="attribution"><span class="source">AS 1979/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>Masters, of Woolworths, has died at the age of five after a long illness. Its passing was a surprise to few. It will live on in the memory and superannuation accounts of Woolworths investors and, it is hoped, in the boardrooms of Australia forever.</p>
<p>Masters was a surprise offspring of the well-matured Woolworths family. Many rightly speculated it was conceived in response to the wonderfully successful Bunnings, from Woolworths’ corporate nemesis, Wesfarmers. It was an odd motivation for the venerable Woolworths family to bring into this world another sibling for such an established brood. With the benefit of hindsight, Woolworths would have been better to focus its time and energy on what was working well, rather than bringing into the world a business that could never thrive.</p>
<p>The adjective “prodigal” seems apt for Masters. Perhaps most associated with the Prodigal Son, the offspring who partied away his father’s wealth and then returned in sorrow. Masters consumed so much time, energy and money from Woolworths that it left Woolworths exhausted, demoralised and financially frustrated.</p>
<h2>An anatomy of a disaster</h2>
<p>Masters was never intended to succeed on its own merits. It <a href="http://www.smh.com.au/business/retail/woolworths-executive-grilled-over-dumped-masters-property-deal-20150527-ghawvt.html">was both spoiled</a> and a spoiler from the start. Woolworths hoped to sap the financial strength of Wesfarmers by reducing Bunnings’ operating margins – little did it know a <a href="https://theconversation.com/the-aldification-of-woolworths-is-destroying-its-value-48885">much smarter operator</a> (Aldi) was about the play the same trick on Woolworths’ main grocery and alcohol business – albeit much more successfully.</p>
<p>Rather than Masters weakening Woolworths’ corporate enemies, the reverse is true. Bunnings has grown from strength to strength and will now make even greater profits for its parent, Wesfarmers. Wesfarmers shares rose as much as 4% on the news. The Masters debacle has <a href="http://www.news.com.au/finance/business/retail/were-all-in-trouble-if-bunnings-keeps-dominating-masters/news-story/deb0f1abf8df5b632059a8316b19eb25">clearly reduced overall competition in hardware retail,</a> and its exit will not reverse this.</p>
<p>Woolworths’ retail competitors will also be carefully looking at the Masters stores that Woolworths will now abandon at great cost. Could these emerge as new locations for the next Bunnings, <a href="http://thenewdaily.com.au/news/2016/01/10/costco-gaining-ground-australia/">Costco</a> and the like? If so, this would be the second free kick by Woolworths with long-term consequences. Many Masters stores, however, are doomed to lay dormant and empty for many years as many Masters locations were simply duds.</p>
<p>In hindsight, it is worth pondering what might have been had Woolworths tried to replicate the success of Costco, building something new for Australian retail customers, rather than trying to wreck Bunnings’ success. There were always better options to pursue.</p>
<p>The damage by Masters has been both direct and indirect. The direct financial losses are huge, and yet to be finally quantified. Woolworths and its one-third partner Lowe’s have poured perhaps A$3.5 billion into Masters over the last six years. Lowe’s, with great prescience, negotiated an exit option that shifted much of the risk to Woolworths. This has cauterised Lowes’ losses to perhaps US$500 million – at the expense of Woolworths shareholders.</p>
<p>In the final analysis, the direct losses to Woolworths shareholders may be around A$2 billion when all is said and done. This is far from small change - but it is around the <a href="http://www.reuters.com/article/woolworths-masters-sale-idUSL3N1510SH">market capitalisation growth</a> that happened when Woolworths shares spiked by more than 6% after today’s announcement. Over the long term, however, much greater costs will emerge.</p>
<h2>Costs yet to come</h2>
<p>Extricating itself from long-term, yet newly established, leases will keep property lawyers busy for a while. How well these leases were negotiated by Woolworths will tell us much about how self-deluded Woolworths was about the viability of Masters.</p>
<p>The massive financial and managerial distraction created by Masters has left little time and money to focus on the core grocery business. This has been especially problematic as Aldi has been triumphantly focused on rolling out new stores across Australia. Reinvigorating Woolworths’ core business is an immediate and pressing challenge.</p>
<p>Combating the resurgent Wesfarmers, and the emergent Aldi, means life in general is about to get a whole lot more challenging for Woolworths’ management. Wesfarmers decision to <a href="http://www.smh.com.au/business/retail/wesfarmers-buys-homebase-for-705-million-20160117-gm7xgv">purchase the UK Homebase business</a> for around A$700 million will assist it in building global supply scale economies – adding impetus to higher margins for its Bunnings business.</p>
<p>Most prosaically, Masters has destroyed reputations and careers. Ironically, those most to blame have already <a href="http://www.smh.com.au/business/retail/woolworths-ceo-grant-obrien-to-depart-with-about-10-million-payout-20150911-gjkis1.html">exited with huge payouts</a>. It is the lives of Masters workers and their families that we should consider most. They, and Woolworths shareholders, will carry the burden for Masters far after the last store shuts its doors.</p><img src="https://counter.theconversation.com/content/53282/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Rice is a member of the NTEU and ALP.</span></em></p><p class="fine-print"><em><span>Nigel Martin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The massive financial and managerial distraction created by Masters has left Woolworths little time and money to focus on its core grocery business.John Rice, Professor of Management, University of New EnglandNigel Martin, Lecturer, College of Business and Economics, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/509782015-11-26T19:14:09Z2015-11-26T19:14:09ZFive tricks retailers will use to make you shop this Christmas<p>Australian shoppers are <a href="http://www.retail.org.au/ArticleDetails/tabid/232/ArticleID/902/Aussies-to-spend-46-7-billion-this-Christmas.aspx">predicted to spend nearly A$47 billion</a> this Christmas. But retailers have to work harder and harder to get shoppers to pull out their wallets.</p>
<p>Here are five strategies retailers will be using to get us to part with our hard earned coin. </p>
<h2>Creating the shopper ritual</h2>
<p>A ritual is a sequence of behaviours that have meaning beyond their functional role and are repeated in similar contexts. Very much like a football fan that paints their face with team colours, wears the team jersey and frequents their favourite “watering hole” prior to a match, the ritual itself creates value by giving the act or behaviour meaning and symbolism.</p>
<p>Seasonal events, such as Boxing Day Sales, are <a href="http://www.itv.com/news/2014-11-28/the-secret-of-black-friday-revealed-so-how-do-companies-persuade-us-to-spend/">a good example</a>. Each year, people get up at dawn, catch the first train into the CBD, take-away coffee in hand, wearing their favourite comfortable shoes and sitting patiently, waiting for the department stores’ doors to open. </p>
<p>Similarly, shopping at Christmas time is steeped in tradition that dates back decades - such as viewing the Myer Christmas <a href="http://www.theweeklyreview.com.au/live/jennifer-hawkins-unveils-myer-christmas-window/">windows</a> or Adelaide’s annual <a href="http://www.abc.net.au/news/2015-11-13/christmas-pageant-drivers-ready-for-parade/6924184">John Martins’ Christmas Pageant</a>. </p>
<p>Hollywood has further embedded our secular view that Christmas is a time to shop, not reflect. Movies like Miracle on 34th Street and Elf romanticised shopping at Christmas. Retailers depend greatly on this postmodern interpretation of Christmas and the social mores and rituals associated with Christmas shopping. </p>
<h2>‘Web-rooming’ to drive instore sales</h2>
<p>Christmas is also a time when retailers claw back a bit of market share from the online shopping juggernaut. Web-rooming, <a href="http://www.smartinsights.com/online-brand-strategy/multichannel-strategies/omnichannel-retail-displays-2015/">the act of researching online before heading into a store to purchase the product</a>, grew 10% between 2013 to 2014. </p>
<p>While the growth of online shopping has given rise to omni-channel retailers, it has also increased <a href="http://www.pressherald.com/2015/09/30/retailers-find-online-price-matching-is-good-business/">the transparency of price for shoppers and retailers</a>. Retailers know their customers are checking prices first before walking through their doors, so price matching has become an important competitive tactic. Further, it is expected that as we draw closer to December 25 and delivery windows become tighter, more and more shoppers will research first, then head in store. </p>
<p>The experience of crowded shopping malls, carols, gift wrapping, decorations and lights align with our cultural image of Christmas, more than sitting on your sofa and shopping online. Although some may consider the convenience and efficiency of online shopping more attractive this Christmas, advertising campaigns use traditional images to tap into our interpretation of Christmas. <a href="http://www.adnews.com.au/news/myer-and-clemenger-stop-motion-in-new-christmas-campaign">Myer</a> is promoting symbolic images of snow and reindeer (even though they aren’t traditional symbols in Australia)- while <a href="http://www.smh.com.au/business/retail/woolworths-christmas-ad-campaign-hits-the-spot-20151116-gl09pz.html">Woolworths</a> and Aldi are featuring families gathering around the table, eating, drinking and laughing. </p>
<h2>The importance of food</h2>
<p>No more socks and undies under the Christmas tree this year for dad. Instead think gourmet barbecue marinades, traditional boiled candies, puddings and exquisite fare. The giving of food at Christmas time to friends and family is another long held tradition for retailers like the UK’s <a href="http://www.ft.com/intl/cms/s/0/9dd1e6fc-3072-11e5-8873-775ba7c2ea3d.html#axzz3riSJ3pPW">Waitrose and John Lewis</a>, copied by <a href="http://www.target.com.au/thefabulousfoodcompany">Australian retailers such as Target</a> and <a href="http://shop.davidjones.com.au/djs/en/davidjones/christmas-shop-festive-food">David Jones</a>. Gourmet, unique, bespoke, localised food offerings, all beautifully packaged, adorn shelves of department stores and supermarkets. </p>
<p>This is a time where our food shopping focuses on exclusive brands and premium quality, not everyday low prices. Supermarkets will team up with internationally renowned celebrity chefs to <a href="https://static.mozo.com.au/images/more-on-mozo/media-releases/celeb-chef-christmas.pdf">drive sales and profits</a>. </p>
<h2>Starting it earlier every year</h2>
<p>It was exactly 115 sleeps before Christmas - 1 September - when Myer and David Jones began clearing retail space and setting up their Christmas departments. While this valuable retail space will potentially generate zero revenue for months, the strategy is more about signalling than selling. With the market crowded with competing retailers all chasing their share of the shopper’s wallet, it is important to be first out the gate. </p>
<p>Shoppers also have a <a href="http://www.nj.com/entertainment/index.ssf/2013/11/black_friday_psychology.html">“mental wallet”</a>, a predetermined amount they plan to spend this Christmas. So, stores that showcase gift ideas early allow shoppers to set aside mentally those funds and potentially return and purchase soon after. </p>
<p>While no one is buying decorations, trees or ornaments in September, they were certainly talking about Christmas. And if your shoppers are talking about your store having Christmas on show in September, they will most likely be coming back to see you in November. </p>
<h2>Tap ‘n go and don’t think about it</h2>
<p>While some may question the value of paying $20 for a photo with a shopping centre Santa, many will simply tap'n go it this year, without really thinking about what they are spending. Behavioural economist Richard Thaler explains this as “transaction decoupling”, a phenomenon of vital importance for retailers this Christmas. </p>
<p>Shoppers are more willing to pay for goods when using credit cards, and often purchase more when paying with a debit or credit card than with <a href="http://www.bloomberg.com/bw/articles/2014-10-17/apple-pay-launch-why-retailers-will-love-apples-payment-system">actual cash</a>. </p>
<p>This separation between when a product is purchased and when it is actually paid for encourages us to shop more and spend more. The access to easy credit, interest free periods and temporary credit card limit increases has now become the norm at Christmas. The <a href="http://www.news.com.au/lifestyle/fashion/is-lay-by-staying-ahead-of-the-fashion-pack/story-fnjev484-1227243257009">decline in lay-by</a>, illustrates our desire to “buy now, pay later”. </p>
<p>Shoppers today want immediate gratification and the thought of having to save and sacrifice all year is no longer an attractive option. A little sad, as traditionally the act of saving and sacrificing was once considered - and promoted - as just as important as the gift: “It’s not the gift, but the thought that counts.”</p><img src="https://counter.theconversation.com/content/50978/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gary Mortimer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Not looking forward to the Christmas shopping? Retailers have got ways and means of parting you with your cash.Gary Mortimer, Senior Lecturer, QUT Business School, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/508322015-11-25T05:03:51Z2015-11-25T05:03:51ZIs Black Friday a thing of the past?<p>Black Friday is the “traditional” start of the holiday shopping season, when hordes of eager consumers line up outside retailers in the wee hours to ensure they don’t miss out on steeply discounted televisions, faded jeans and smartphones. <a href="https://www.youtube.com/watch?v=zLVhlyOkGbs">Fistfights</a> over printers are known to occur. </p>
<p>But has Black Friday, which occurs the day after Thanksgiving, lost its luster as more retailers downplay its significance as just another Christmas shopping day, pulling the holiday season further away from its traditional moorings in December? And as consumers expect steeper discounts earlier in the year, what does that mean for retailer profit margins? </p>
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<h2>The true meaning of Black Friday</h2>
<p>Once upon a time, the Christmas season – with all its lights, mangers, music and sales – began only after we had time to digest our Thanksgiving turkeys. And that gave Black Friday special significance as its official start. </p>
<p>Black Friday’s <a href="http://www.history.com/news/whats-the-real-history-of-black-friday">origins are murky</a>, with the first recorded use of the term in 1869 to refer to a crash in the gold market that sank the stock market. An oft-cited story claims it refers to the day when retailers are finally in the “black” (profitable) for the year. </p>
<p>The last two months of the year typically account for 20% of retailers’ annual revenues and <a href="http://www.reuters.com/article/2015/10/05/us-usa-retail-holidays-idUSKCN0RZ11Q20151005#LtwftIEX2SfqoPG6.97">as much as a third</a> of their profits. Nonethless, the story is considered inaccurate and more of a marketing myth.</p>
<p>The “true story,” according to the <a href="http://www.history.com/news/whats-the-real-history-of-black-friday">History Channel’s website</a>, is that police in Philadelphia used the term to describe the chaos that descended on the city as suburbanites poured in for the post-Thanksgiving Army-Navy football game. </p>
<p>Regardless, the day’s importance is increasingly fading as “<a href="http://qz.com/532809/how-long-before-we-see-santa-in-july-introducing-quartzs-christmas-creep-calculator/">Christmas creep</a>” – referring to businesses exploiting our holiday spirit before the holiday really begins – gets earlier and earlier every year. </p>
<h2>Seasonal shopping</h2>
<p><a href="http://www.zacks.com/commentary/62217/will-retailers-strike-it-rich-this-holiday-season">Many retailers</a>, such as Walmart, Target and Best Buy, started their seasonal promotional and discount shopping strategies in October or even earlier. </p>
<p>More broadly, retailers are downplaying the significance of Black Friday, often still offering the especially steep discounts to lure customers but also on the day before and, in Walmart’s case, online for the first time.</p>
<p>The retailer says its <a href="http://www.dailymail.co.uk/news/article-3330218/After-moving-Black-Friday-Thursday-Walmart-shifts-Cyber-Monday-SUNDAY.html">efforts</a> to lessen the significance of the single day is aimed at public safety: a Walmart employee was trampled to death in 2008 after shoppers rushed the doors at a store in New York state. </p>
<p>But it’s also a reflection of the reach of the internet and that more people will be tackling their Christmas shopping lists online. (A <a href="http://www.pymnts.com/news/2015/amazon-gets-an-early-holiday-shopping-gift/">recent survey</a> claimed more than half of respondents plan to do a majority of their holiday shopping on Amazon.com.)</p>
<p>Other consumer <a href="https://newsroom.accenture.com/news/more-us-shoppers-plan-to-increase-holiday-spending-annual-accenture-survey-reveals.htm">surveys</a> bear out the move away from Black Friday. Almost a third of shoppers said they planned to do most of their shopping before the week of Black Friday, while about 66% of millennials said they intend to complete a majority of their shopping by December 1.</p>
<p>Clothing retailer Gap, another company jumping on the bandwagon, <a href="http://seekingalpha.com/article/3707456-american-eagle-abercrombie-and-fitch-and-express-send-promising-signals-holiday-countdown-week-3">informed</a> shoppers a week ago that “Black Friday Starts Now,” and many other retails did the same thing, diminishing the day as a “promotional hot button.”</p>
<h2>Bye bye Black Friday?</h2>
<p>But before we kiss goodbye to Black Friday as the herald of the traditional shopping season, a few retailers are fighting back or trying something entirely different – in part to <a href="http://www.zacks.com/commentary/62217/will-retailers-strike-it-rich-this-holiday-season">protect their thinning margins</a>. </p>
<p>Nordstrom, for example, is holding tight to its <a href="http://abcnews.go.com/Lifestyle/nordstrom-praised-social-media-shunning-christmas-creep/story?id=35099108">long-standing policy</a> of not putting up holiday decorations until the day after Thanksgiving. </p>
<p>The Seattle-based clothing retailer has also <a href="http://www.marketwatch.com/story/nordstroms-earnings-show-its-pulling-away-from-the-pack-2015-08-14">cut</a> the number of “clearance” events – days with promotional markdowns – by 20% this year than a couple of years ago and will trim it by another 25% in 2016. </p>
<p>Teen apparel retailers Abercrombie and Fitch and Aeropostale are also focusing more on minimizing promotions, as opposed to the deeper cuts offered last year. </p>
<p>REI, on the other hand, is trying an entirely different tack. It <a href="http://www.rei.com/black-friday">says</a> it will close on Black Friday and give its staff the day off to enjoy the outdoors. </p>
<h2>Resistance is futile</h2>
<p>But <a href="http://www.reuters.com/article/2015/10/05/us-usa-retail-holidays-idUSKCN0RZ11Q20151005#LtwftIEX2SfqoPG6.97">how far they can go</a> in fighting this trend and resisting heavily discounting items in the face of heavy competition isn’t clear, given how pre-conditioned consumers are to the seasonal promotions.</p>
<p>Retailers with overstocked inventories have little choice but to move product, even if they have to lower prices, even as the need to protect margins and profits grows in a bumpy economic environment. Balancing each will be a genuine challenge with a fair amount of risk in getting it wrong. </p>
<p>A recent <a href="https://www.pwc.com/us/en/retail-consumer/assets/pwc-2016-holiday-report.pdf">PricewaterhouseCoopers survey</a> indicates that about 87% of consumers are considering price the primary driver of their purchase decisions – particularly households making less than US$50,000 a year – up three percentage points from last year, while a still-weak recovery suggests people will remain stingy about how they spend their money. </p>
<p>Forecasts for holiday sales growth, meanwhile, have been mixed. Market research firm NPD <a href="http://www.reuters.com/article/2015/10/05/us-usa-retail-holidays-idUSKCN0RZ11Q20151005">says</a> this season may slow the slowest year-on-year growth since 2009, or about 3%, while eMarketer <a href="http://www.emarketer.com/Article/Happy-Holiday-Season-Expected-Retailers/1012898">expects</a> a 5.7% jump in sales, the most since 2011. The biggest increases are seen in online sales, which are expected to account for about 9% of total sales, up from 8.3% in 2014, thanks to the growing importance of Cyber Monday, the first business day after Black Friday.</p>
<p>In the end, whatever the original origins of the phrase, all that really matters to retailers is whether Black Friday and the rest of the holiday shopping season will in fact put them in the black – or leave them in the red.</p><img src="https://counter.theconversation.com/content/50832/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>George Cook does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>‘Christmas creep’ is pushing the holiday shopping season earlier and earlier. Has Black Friday – its traditional start – lost its luster?George Cook, Executive Professor of Marketing Emeritus at Simon Business School, University of RochesterLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/481512015-09-28T03:25:33Z2015-09-28T03:25:33ZDown, down but not different: Australia’s supermarkets in a race to the bottom<p>For 25 years, Woolworths <a href="http://mumbrella.com.au/woolworths-brings-back-fresh-food-people-positioning-brand-campaign-leo-burnett-243805">told shoppers</a> they were “the fresh food people”. It was a very clear point of difference and delivered the group a sustainable competitive advantage. Any attempt by a competitor to replicate it would have been dismissed as lacking credence; a simple market-follower strategy. </p>
<p>In contrast, Coles appeared lost and without direction, the result of an ever-changing senior leadership team, until Ian McLeod arrived in 2008. Prior to 2000, Coles was “serving us better”, then in 2002 shoppers were “saving everyday”. In 2004, Coles was “delighting their customer” and then things were getting a “little better … every day”. Finally, the more recent “down, down” campaign has aligned with its “quality food costs less at Coles” slogan, <a href="http://www.roymorgan.com/findings/5013-supermarkets-low-price-perception-march-2013-201307030140">cutting through with shoppers</a>.</p>
<p>Somewhere along the way Woolworths was blindsided. The group fell <a href="http://www.theaustralian.com.au/business/companies/woolworths-under-fire-as-suppliers-list-their-complaints/story-fn91v9q3-1227546332364">out of favour</a> with suppliers and was distracted by its troubled Masters hardware chain. The turnaround plan suffered a further blow with the <a href="http://www.smh.com.au/business/retail/woolworths-chief-executive-grant-obrien-to-retire-20150616-ghpr0a">news chief executive Grant O'Brien would step down</a> after less than four years in the job.</p>
<h2>Lack of differentiation</h2>
<p>At the same time Coles was <a href="http://www.smh.com.au/business/coles-outperforms-woolies--again-20130418-2i1ju.html">closing underperforming stores</a>, <a href="http://www.smartcompany.com.au/growth/economy/1462-coles-to-cut-its-product-range-by-30.html">cutting its range</a> to streamline supply chains, cutting overhead costs and investing heavily in store refurbishments.</p>
<p>The fastest, although not the smartest, way to compete with an aggressive competitor is to replicate; that’s exactly what Woolworths and more recently IGA did. A quick look at Coles’, Woolworths’ and IGA’s catalogues and stores today illustrates the same deep discounting strategy. </p>
<p>It was clearly an <a href="http://www.smartcompany.com.au/growth/economy/22834-how-woolworths-let-coles-back-in-the-grocery-game-five-strategy-lessons.html">error of judgement</a> for Woolworths to move away from its very successful “fresh food people” position. The “cheap, cheap” campaign confused loyal shoppers and played into the hands of Coles, which was better positioned to deliver on price. With both majors driving a message of “price”, more shoppers also started <a href="http://www.news.com.au/finance/business/the-supermarket-switch-is-on-as-aldi-takes-top-award-in-customer-satisfaction/story-fnkgdftz-1227450718972">trailing the German discounter Aldi</a>.</p>
<h2>The lowest price doesn’t necessarily win</h2>
<p>If you are not a discounter, move away from price. While most supermarkets will carry a range of low-priced, generic private-label products to service the discount-shopper segment, sending the message that you sell groceries “cheap, cheap” and “down, down” every day is risky. </p>
<p>Even Metcash-owned IGA has moved away from its <a href="http://www.campaignbrief.com/2013/05/iga-launches-second-stage-of-i.html">“local” campaign</a> to now promote itself as “the same” as the big two with a recently launched <a href="http://www.news.com.au/finance/business/new-challenger-takes-on-coles-woolies-with-supermarket-price-match-war/story-fnkgdftz-1227408996343">“price match” campaign</a>. Price is easily comparable and replicated, and this has been played out across Australian supermarkets over the last few years.</p>
<p>Internationally, grocery discounters like Lidl and Aldi continue to <a href="http://www.kantarworldpanel.com/global/News/Grocery-price-war-continues-to-stall-market-growth-in-the-UK">take market share away</a> from the major full-line supermarkets, while the supermarkets continue to discount heavily. The practice of deep, unsustainable and potentially unprofitable deep discounting has even begun to attract <a href="http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11423518/Tesco-fightback-hits-Asda-sales.html">criticism</a> for grocers. </p>
<p>However, while Australian supermarkets and independent grocers continue to focus on price, shoppers will continue to shop between all brands for the lowest; <a href="http://www.smartcompany.com.au/finance/48321-shelf-life-iga-tops-supermarket-loyalty-stakes-as-just-7-of-shoppers-exclusively-buy-at-aldi.html">loyalty is lost</a>. This is most evident with Aldi, which in Australia has the lowest customer loyalty at 7%, compared to the majors at 25% and IGA at 30%. Supermarket retailing in Australia has become a race to the bottom.</p>
<h2>Fresh – the future fight</h2>
<p>Discounters will always win on price. The smart approach to combating this threat is <a href="http://www.smh.com.au/business/retail/coles-woolworths-urged-to-target-aldis-weaknesses-20150527-ghav10.html">not to position yourself as the same</a>, but different. A focus on what the discounters don’t offer – such as range, value, service and fresh foods – is a much smarter approach. </p>
<p>The price of a litre of milk or a loaf of bread is easily comparable, whereas “fresh” is not. The fresh food component of a supermarket also <a href="http://www.afr.com/business/fresh-food-the-real-revolution-in-supermarket-aisles-20130402-jhz1i">delivers more profit</a> than dry groceries. Fresh is where the next battle will be fought and won. </p>
<p>Now that Coles has established its position as the provider of low-priced groceries, its next move will be to focus on the <a href="http://mumbrella.com.au/coles-takes-fresh-food-battle-to-woolworths-as-supermarket-marketing-war-goes-on-306280">“fresh food” space</a> now vacated by Woolworths, which still appears to be <a href="http://www.smh.com.au/business/retail/woolworths-redfaced-after-nielsen-refuses-to-endorse-price-claims-20150914-gjm8d8.html">cutting prices</a>. </p>
<h2>The future of convenience</h2>
<p>When shoppers have been conditioned to think about the price they pay each week for a basket of groceries, the franchised grocer model no longer works. Already, <a href="http://www.theaustralian.com.au/business/companies/aldi-growing-but-metcash-doomed-says-hamish-douglass/story-fn91v9q3-1227521819361">experts have suggested</a> that within 10 years Metcash’s independent grocers will no longer feature in the Australian grocery market. </p>
<p>Yet overseas the convenience store model is growing faster than full-line supermarkets. While some of this growth comes from the ability to embed small store footprints into high streets and high-density areas, much of it is the result of major <a href="http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11426085/How-convenience-stores-helped-to-destroy-the-supermarket.html">supermarkets moving into this space</a> with their brands: Tesco Metro, Tesco Express, Sainsbury’s Local and Carrefour Metro.</p>
<p>With Roy Morgan’s latest shopper loyalty research illustrating IGA has the most committed shoppers, even with perceived higher prices, IGA would be best to walk away from a price war. If IGA is unable to defend against the <a href="http://www.abc.net.au/news/2015-03-05/aldi-threat-growing-for-coles2c-woolworths/6282558">growth of Aldi</a> and a re-energised Coles and Woolworths, it is highly probable it will either exit the market or reposition itself <a href="http://hartbeat.hartman-group.com/hartbeat/512/value-at-whole-foods-market-">upmarket</a> as a premium grocer. </p>
<p>Either way, it is likely that both Woolworths and Coles will look favourably at moving into this space with a chain of Woolworths Metro or Coles Express <a href="http://www.smh.com.au/business/property/woolworths-coles-to-take-on-convenience-stores-20141005-10qhgw.html">convenience stores</a>.</p><img src="https://counter.theconversation.com/content/48151/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gary Mortimer does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Convenience stores could be the next big focus for Australia’s grocery retailing giants.Gary Mortimer, Senior Lecturer, QUT Business School, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.