Detail: Domestic buyer

David Jones is not only Australia’s oldest department store but the oldest department store in the world still trading under its original name. Founded in 1838, by (miraculously) a man called David Jones, his mission was to sell and stock the best and most exclusive goods. We became one of the first vertical retailers in the country, setting up a manufacturing plant in Sydney in the early 1900s. In the 1920s we built out first flagship store in Elizabeth Street and not long after the men’s store across the road in Market Street. In 1948, just after the end of the Second World War, we convinced Christian Dior to come to the other side of the world to show what was then his “new-look” design and that is actually the only time that Christian Dior has shown outside Paris. In 1954, the Queen chose David Jones as the destination for a royal reception, although we have had a number of other types of queens walk through the door since 1954.

1959 saw David Jones expand its retail empire into the suburbs taking its brand and all the brands in our store to the customer. So in 1980s we refurbished our Elizabeth Street, Sydney, store and in the 1990s we started to talk to our customers in a very different way and created a loyalty program. Also in the  ‘90s we created something we’re very proud of, which is the “David Jones believes in Australian fashion” campaign, which still runs today in various forms. So my point here is that the David Jones strategy has not changed in 178 years: our tactics have changed but we remain consistently focused on carrying the best brands, offering the best service, in the best environments and the best locations.

I just lied to you earlier when I said that David Jones has had the same strategy for the last 178 years. That’s not actually true. In the early ‘90s, just before David Jones floated as a public company on the stock exchange, somebody had the great idea to import a husband and wife team to run David Jones. They arrived in Australia straight off the boat and decided that it would be a really good idea from a profit perspective to ramp up the percentage of private label in our business – brands were worth nothing and it was all about private label for David Jones. I think within two years, they were gone. And I can still remember the day that some of my colleagues came out of the boardroom saying “ding dong the witch is dead” when they left the building. Needless to say, that was an abject disaster. The David Jones customer did not respond to this strategy. They were not interested in crepe jackets from China at $69.95. It was an absolute disaster and thankfully we rectified the situation and moved back to the strategy that had done so well for David Jones in the preceding years.

Let’s talk about today’s retail environment in Australia for a moment. Our currency is strong, but consumer sentiment is weak. It’s a challenge. There are increasing input costs, which of course are driving up the cost of manufacture; new environmental legislation in China is resulting in factory closures and tightening supply; the strong Australian dollar, which is great for us when we decide to travel, also means that Australian consumers can afford to shop offshore. New competition is entering the market and we need to consider what that means for our businesses, because it will change the face of Australian retailing. New business formats – online. How much business is leaving the country because the consumer is shopping online? Increased local competition: great brands are popping up all over the place. And interestingly, new and increased levels of consumer loyalty are being sought by retail big and small. And most importantly, consumers are demanding value – more than ever before. And value is not necessarily just price. Our consumers see great value in a $4000 Celine dress as they do in a $29.95 Esprit t-shirt. But as somebody once said to me, “the consumer has gone to night school and she knows more than you do”. They understand quality, they know what is out in the marketplace and there are more opportunities for them to access great product.

I don’t profess to have the answers to any of these questions but certainly they are questions that we as retailers and brands need to answer if we want to be successful. The consumer is fashion-savvy and they expect the brand to offer them a point of difference and something that represents their lifestyle. They want to be excited, they want to be engaged by brands and they will be loyal – as long as you look after them, as long as you deliver on your promise all day, every day, 365 days a year. So what’s important in my view? Having a vision and a strategy for your brand, differentiating yourself from the competition, having a clear and well-articulated customer focus. Thinking about the long-term health of your brand. Not making short-term decisions and thinking about where your brand will be in five or 10 years’ time. Building a relationship with your customers, whether that’s online, through choosing the right retail partner, opening your own stores and thinking about the locations of those stores. Being adaptable. The days of being a slow ship and taking six or 12 months to turn are long gone – we have to be on our toes. Choosing the right business partners. And most importantly, having a sustainable business model.