Q: As Fashion Exposed 2012 exhibitors, what are your thoughts on the current trading conditions in Australia?
Gary Novis
CEO and managing director of Retail Apparel Group (RAG) menswear
The nature of our product and our absolute focus on our customer has enabled RAG to trade well in most market conditions. Having said this, I found conditions to be challenging since the beginning of 2010 when we had many unfortunate natural disasters, low consumer confidence (partly due to uncertainty on government policy) and high levels of household savings (more than 10 per cent of disposable income). However, I feel the tide is turning and I believe retail is definitely returning to more stable and predictable patterns. Currently, I believe we have better market conditions than a year ago and trade is certainly reflecting this. The interest rate decrease in early November was good for confidence. In my opinion the outlook is positive for retail, especially for specialty retailers that are focused on a specific target market and offer great service and overall in-store experience. There is definitively more confidence in the local market and this really is all that counts. I don’t feel that the current financial crisis in Europe or anywhere else effects our customers decision to buy a new shirt for Friday. The current talk is about the negative sentiment in the department store space and around big box retailing including electrical, but there are good focused retailers doing well in the current environment.
Melissa Anderson
Director of Naudic womenswear
A thriving economy and lower priced garments, due to off-shore manufacturing, caused consumers in the past to flock to stores leading up to the global financial crisis. Fashion was dictated to consumers and their was little choice or thought by the consumer but to accept what was being offered. But consumer spending behaviour has changed since the economic downturn and clothing retailers are suffering due to the unstable global economy. Consumers remain nervous about high interest rates, soaring petrol prices and living costs. The fashion industry has had to rationalise to combat changing consumer expectations and fight fashion fatigue. The arrival of global brands in Australia and shopping websites has altered the fashion industry landscape - consumers now have more power to accept or reject what is offered in store. I believe the trend now and in the future will be towards people dressing to please themselves. Consumers are becoming more self reliant and want to express their individuality. There will be a noticeable move away from status dressing. Consumers will demand fashion, but will require more understated styles that combine realism and comfort. I think that changing work environments and lifestyles will see the evolution of a more casual look. The return to local strip shopping will continue to become more attractive as the large shopping centres, with unrealistic rents, are only occupied by vertical retailers who continue to offer bland homogeneous product. I also think fashion retailers will continue to establish a multi-channel format of store, website and Facebook to counter the overseas internet experience.
David Sibel
Managing director of Boo Radley womenswear
In the past traditional seasonal buying and deliveries has created peaks and troughs causing cash flow challengers in ladies fashion, which historically have been handled by bank overdraft or surplus cash. Inventory gluts and clearance sales which were used to clear end of season stock are common in smaller boutiques struggling to compete in a market that has now changed. Consumers in the past bought on traditional season cycles where there was much less product information. Discounting and perpetual sales have further eroded margins for retailers that have not adapted well to the change in market conditions and rely heavily on traditional practices. Consumers are now more determined to research the products they buy. There is now more pressure on retailers than ever before with a consumer expectation changing and customer service more vital than ever before in what is now a global market. Setting a high standard, global retailers have seen this as an opportunity to enter the Australian market, where fresh regular deliveries in limited runs excite customers. Minimal discounting and a large variety of cross marketing educate consumers on the ‘new offers’, adding to the customers excitement and experience. While the market size is relatively stable, increased competition has made market conditions challenging.
Speed to market has never been more relevant than now and this will only continue as new technology improves. Looking ahead, retailers that seek to improve their communication and customer experience, as well as their buying patterns, will be in a good position to increase market share and take advantage of a new playing field.