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HomeminewsQ1 Retail Confidence Expected to Turn

Q1 Retail Confidence Expected to Turn

Australian retailers continue to be pessimistic about their performance, according to the latest Dun & Bradstreet Business Expectations Survey. According to the report for the first quarter of 2012, ending March, 55 per cent of retailers sited slow demand as the biggest barrier in the year ahead.

Sales expectations fell 15 points against expectations surveyed the same time last year, while profit expectations dropped 22 points for the same period.

However, there appeared to be some improvement from late last year, with sales expectations at their highest level in 12 months. Profit expectations remain more than 20 points below this time last year with business owners concerned about wages growth and increasing operating costs.

The survey shows 56 per cent of retailers expect online sellers to have an adverse effect on traditional retailing business.

It’s an issue that is increasingly impacting optometry practices around Australia, as you’ll read in the lead story in this edition of mivision; “Shifting Scripts”. Optometrists have reported that customers are more comfortable than ever before to request their scripts following an eye examination so they can shop around online or at eyewear discounters. The wise ones are implementing new strategies to fight back and maintain their business.

“The situation is likely to deteriorate for those retailers unwilling or unable to adapt to changing consumer behaviour,” Dun & Bradstreet chief executive Christine Christian has warned.

Award winningMelbournebased optometrist, Jim Papas agrees that in order to remain relevant, and succeed, optometry practices must be prepared to change and innovate. “The optical profession is such a conservative industry, we have a long way to go, but if we don’t start to make changes now, we won’t survive,” said Mr. Papas.

“One of the greatest short-term challenges we currently face isAustralia’s slow sales environment. Retail sales remain significantly below trend because consumers are focused on achieving higher savings, they’re shopping online or overseas and they’re also dealing with higher living expenses which leaves them with less disposable income,” he said.

According to Mr. Papas, part of the solution is change and innovation, which needs to occur at all levels. “At eyeclarity we continue to re-invent ourselves. We have developed our brand, introduced new ways of doing things and invested in technology. That new technology has made us more efficient and cost effective operationally, which in turn has allowed us to deliver a better service. For example, by creating our myeyes sales software, we’re now able to provide a unique experience for our patients and our customers.”

Mr. Papas developed the unique myeyes sales software five years ago because there was a shortage of trained dispensers to employ in the western suburbs ofMelbourne. The software guides customers through eyewear choices while at the same time allowing Mr. Papas to cut the cost of floor staff by AUD $6 an hour. It has directly contributed to prescription retention in a highly competitive environment.

“Customers who walk in to get a prescription tend to buy glasses or contact lenses at the store rather than heading off to a low cost competitor – because they can instantly see that we have the solution that meets their needs,” he said.

The software earned Mr. Papas the 2011 BRW AMP Retailer of the Year award in the category Innovation in Retail. His practice also picked up the 2011 Field Agent Retail Innovator of the Year award at the recent Australian Retail Awards (ARA).

ARAexecutive director Russell Zimmerman said eyeclarity and 7-Eleven, which won Retailer of the Year, stood above a host of excellent competitors.

Speaking of the award, Field Agent General Manager Kate Gorman said: “eyeclarity is a pioneer in the future of optical retailing by implementing a business model which seamlessly integrates customer service, product innovation and technology to make for a truly amazing shopping experience.

“I am all praise for Jim (Papas) for his vision and leadership in driving his business forward and innovating to achieve retail excellence, and what an honour to sponsor a winner who had the confidence to implement a unique and successful business model,” said Ms. Gorman.

Mr. Papas said the award recognises that eyeclarity is more than just a leader in the optical industry. “We’ve now been recognised as a leader in the highly competitive retail industry – its great that people have noticed the innovation and uniqueness of what we’re doing.”

Size Isn’t Everything

Mr. Papas said the award demonstrates that businesses don’t need masses of resources or money to be innovative and successful. “You can be small and independent – you just need ideas and innovation to make it happen,” he told mivision.

He said strategic business relationships are important. He has developed his own partnership model of five optical stores, which he says, has allowed each of his partners to “increase efficiencies, gain economies of scale and, as a result, re-invest in delivering a better customer experience and service.

“It is increasingly difficult for independent optometrists to compete on a single basis because while the cost of retailing has increased, we are now open to greater competition and falling spectacle prices,” says Mr. Papas. “But even companies that focus on selling low cost frames are vulnerable to price erosion from online discounters, so I believe the only way forward is to become integrated – for independent optometrists to pool resources like back end services and keep developing new services.”

Not All Bad News

Despite the challenges in the short term, according to the Dun & Bradstreet Business Expectations Survey, it’s not all bad news. Dr. Duncan Ironmonger, Dun & Bradstreet’s economic consultant, said the latest Survey shows improving prospects for the year ahead with all aspects of the first quarter of 2012 being much better than those for the last three quarters of 2011.

“Despite volatility in international financial markets in recent weeks, current financial conditions in Australia have become easier with bank lending rates for some housing and business loans being reduced. This change has contributed to a more confident outlook,” Dr. Ironmonger said.