This year at the Property Council of Australia’s (PCA) Retail Outlook breakfast, retail experts aligned to discuss the need to put customers in the heart of all decisions to create strategies that address customer needs and wants; going back to the fundamental adage of the yesteryear where customers come first. Another highlighted trend is the need to embrace change and that reinvention is of critical importance to grow and remain relevant in the eyes of today’s consumers. Despite media reports of the retail industry’s doom and gloom, the panel of retailers and landlords were surprisingly upbeat on the retail outlook – all supporting bricks and mortar as the sustainable pathway.
Jenni Dill, Chief Marketing Officer, McDonalds Australia
Jenni Dill, Chief Marketing Officer of McDonalds Australia kicked off the event showcasing their brand – which has a 100% brand recall worldwide. However, she made no claims that this always resulted in great sales and marketshare. Although McDonalds serves two million customers a day, in the category of Informal Eating Out (IEO), it only has a 15% marketshare, so there’s plenty of opportunity to grow. Dill explained that having a share at this level makes the company innovate and change on many fronts – and their intention is to grow with the opening of their 1,000th store opening later this year with a ground-breaking new format, focused on sustainability.
Despite major brand recall for the iconic golden arches, the business invests in a 12 month calendar of constant advertising to ensure their strong position is not lost with their customers. For regulars, they release a new product every 4-6 weeks to keep the menu fresh. They are listening to their customers and using their customer’s language in advertising messages, calling themselves Maccas and not having the urge to alter the brand that is so well-known.
Known more commonly as Maccas
Their core priorities Great Experience, Great Taste, Great Value and Great Brand are at the heart of what they do but of recent times they have had to diversify product ranges to remain relevant and address serious issues important to customers like sustainability. Their Australia first supplier policy is at the centre of the notion of giving back to their communities and the numbers sell it – $1.4 billion is spent on Aussie ingredients annually.
Dill’s presentation proved that they have considered all aspects of their business in terms of serving customers, as well as keeping their eye on growth. Their Simple Growth Model focuses on more customers, more often, with more spend per visit.
Her final call out was to landlords to get in touch as they plan to open (with their chequebooks in hand!) another 100 restaurants over the next three years.
Maria Tsaousis, Head of Retail, MECCA
One of the most inspiring retailers on the landscape is MECCA Brands. The audience of nearly 900 attendees heard from Maria Tsaousis, their Head of Retail. Many would consider this brand an overnight success, but it’s been an evolution. The first store was opened 23 years ago in Melbourne and with a solid foundation the business continues to grow. Their mission back in 1998 was “to help our customers and team look, feel and be their best”. This has never changed in what they deliver everyday to their customers and stakeholders.
With 109 stores, the brand has more than 100 exclusive brand partnerships with a customer-focused service model delivering differentiated experience to customers. Layered on top is a sophisticated and engaging loyalty program that allows the organisation access to buying data of more than 2 million customers.
Where other retailers are looking to way to lower costs, MECCA are continuing evolving to make their store network stronger. The 600m2 flagship store in GPT’s Highpoint Shopping Centre, for example, has had three refurbishments in five years to allow for more experiential and service space. In 2020 MECCA will create a retail monument in the heart of the Sydney CBD at the corner of Market and George St within the old Gowings bulding. The 3 level store will offered a unparalleled beauty offering with 200+ brands featured in a beauty product and service wonderland. Their latest format allocates 20-30% to service with the idea of nailing ‘excitement per sqm’, maybe not a financial way to measure but they believe investment in this area will generate long-term sales and customer loyalty.
Mecca opened 100th store in Rundle Mall last year. Photo Credit – Josh Geelen
In the retail panel facilitated by Jessica Wilkinson, Senior Research Manager at Lendlease, many important issues facing retail were discussed.
Carolyn Viney, Chief Development Officer at Vicinity Centres stated “It’s about staying close to the customer and keeping pace with change”.
With a portfolio of some of the best performing centres in Australia, Vicinity Centres has evolved with mixed-use formats opening The Chadstone Hotel late last year and ensuring their retail mixes attract new customers. At Emporium Melbourne, an Australia first gaming destination Fortress has opened, a break away from traditional retail but one that brings hoards of customers in to the centre daily. Viney said the need to look at different usages is important. In the same centre they have reduced Myer’s footprint and used the space for a co-working office – addressing a customer need to improving space productivity.
Brian Walker, Founder and CEO of the Retail Doctor said the industry is “moving away from terms like omnichannel and good retailers are not treating their businesses as just retail but as a brand”. This impacts what they do positively and makes retailers focus on the experience in many different facets.
Walker called for a ‘more human focus on the customer’ and making sure customer experience is the best it can be.
Greg Chubb, Retail CEO, Charter Hall
Greg Chubb, Retail CEO of Charter Hall was asked if the media reports shining a negative light on retail were really true.
Chubb said “Absolutely NO, if you focus on convenience and service (which equals value) – you have a good formula. He noted performance was stable and good.”
With a portfolio generating more than $5 billion on sales and $3.5 billion being grocery, Charter Hall have a firm hold on the stable and solid convenience sector of retail.
McDonald’s Dill emphasised that being customer centric provides a huge runway to growth and a internal motivation for change. McDonalds only has 15% of the market – not 50% so it’s a platform that makes our team innovate and develop strategies to grow. A good example if they now look at sites and locations they would have never considered the past, they need to be flexible to get the best locations.
Dill said there was once a day when a McDonalds store was stuck in the back of the centre or food court to drive traffic, now they want to be front and centre – in high traffic areas where they want to be seen. They need to partner with landlords to get their objectives met and they are willing to adapt format and invest in design to achieve desired outcomes.
Meagan Wakefield, Regional Director, Retail Services Pacific for CBRE said “More than ever we need to be tuned to what our customers want and desire. Sure in some categories there are declines but consumers still want to consume but maybe different things, like entertainment, services and even co-working spaces”.
However Wakefield stated “If you don’t have the right location, the right access and you’re not listening to you customers”, you can never save a centre in decline.
A question was asked about the trend of declining sales of major stores and MECCA chimed in:
In terms of majors, Tsaousis said they are looking for more space unlike some of the major stores downsizing. “The storefront in a centre is a valuable asset giving access to many eyeballs and customers. We are looking for landlords to understand that we need more space for services and experience, and in turn MECCA will bring more customers to the centre.” When Mecca opens a new store they do take a hit on online sales which proves that if customers are provided with great service and products in-store they will always choose the physical store over online.
Chubb said not all majors were doing badly, “The major grocery brands – ALDI, Coles and Woolworths are focused on customer experience and are growing and expanding.”
When asked about the movement to less consumerism and concerns over the on environment Wakefield responded “That the good thing is as a group – as an industry we are committed to be more sustainable and we need to think of assets as social and community hubs. It’s not just about environment, it’s also about how we provide back to the society too.”
Shopping Centre News were guests of the PCA at the 2019 Retail Outlook breakfast. The event was sponsored by Mainbrace Constructions.
