Welcome to 2012. Some of you may have enjoyed some good weather over the break, and if so, well done! For those of us in the north of the country, it was generally wet with little abatement. However, as we enter this first working week of the year it is apparent that the weather has turned a corner and is going to show some serious improvement. Murphy’s Law!
So what has been going on while we have all been relaxing? First off from RCG’s perspective, we are spending some money on improving our website. The new presentation should be completed by February so look out for our new sparkling image and better information emerging from www.rcg.co.nz. There is also an article coming out in the February issue of “NZ Retail” magazine which devotes some space to the new “Z” rebranding of the old Shell petrol stations. RCG will be mentioned so we will support the article with an advertisement outlining how we contributed to the conversion. There was much to think about during the break, all of which needs a mention, so here’s a few observations as we move rapidly into the New Year.
The use of the internet and social networking was never more to the fore than during this past holiday break. It was also fuelled by wet weather and the need for indoor rather than outdoor activities. Checking retail prices before we made a purchase, finding movie tickets, buying travel or booking accommodation, visiting shopping sites such as Amazon or local retailers were just a few indicators of how we are relying more than ever on this new communication and search facility that is now available to all of us in a matter of seconds. So is this rupturing the retailer? Not in our view, it is merely another vehicle for selling merchandise and giving our respective brands some decent exposure. Hence the RCG decision to smarten its online acts up also.
Nevertheless, we had a few debates over the holidays as to the impact of all this modern technology. Simply put, we are crazy if we don’t use it wisely and to our respective benefits. It saves leg time and without doubt gives us the opportunity of researching from our living rooms. Therefore the package available online is what will convince the consumer to make a purchase. OK then there must be an impact on retailing? Not at all. Of course we are all price driven, that never changes. The better the deal then the more you will sell regardless. The use of technology is merely a window for our merchandise. No different to the traditional shopfront. All we are offering is a greater opportunity from which to select. If we all compete on the same playing field, then the better the web site, the better the opportunity for more sales. A couple examples of how one benefits the other is the mobile phone market. The respective dealers were inundated over the holiday period, both online and physically. This proved the point that there is a need for physical contact. “How do I use the phone?” being a common theme, you need personal contact. “Show me how to use it?” The same applies to the purchase of a television or any other gadget we are keen to purchase. We need “knowhow” over and above what is available online.
If this is extended to the supermarket business, we are all inundated with offers, direct to our email address if we are “Onecard” customers. The supermarket operators are aware of what we buy and in advance advise us of the specials that are available based on our previous supermarket purchases. We cannot escape being pursued. Westfield are also using this modern form of communication as they see a need to convey specials to their customers.
Over the summer break, there have been sporting events and world events that have reached us in seconds from occurring. One example of this which will impact, was the scuttling last Friday, on the shores of the tiny Italian Island of Giglo of the cruise ship Costa Concordia with 4,200 passengers and crew on board. What does this have to do with retail and property? Plenty actually. In the first instance, it’s a branding nightmare. The whole Costa brand will be affected as to its safety, and the effect will flow on to other cruise ship companies. They will all be scrambling to convert the comfort and style marketing images to one of safety. Further, coach companies will be using the opportunity to convey their safety and convenience opportunities over cruising. Some of us at RCG have cruised previously and recently cruised on the Costa Mediterranea, a sister ship of the Concordia. There was little English spoken on board and the jostling that went on among the predominant Italian passengers as one boarded the ship would not bode well for a satisfactory evacuation. Cruise lines have huge property, vessel and major retailing interests worldwide. This untimely and sad catastrophe, in the shallow and calm waters of an Italian island, demonstrates that nobody in business can rest on their laurels. Health and safety and image are all part of branding. Hence the need for us to all constantly review what we have on offer. The Internet and social net working facilities are merely a vehicle for delivering a message: we all remain responsible for the ultimate product delivery and the satisfaction of our customers. Welcome to 2012.
SHAREWATCH – MICHAEL HILL INTERNATIONAL
Michael Hill International recently released their trading results for July to December 2011, and overall, the results are quite positive. New Zealand sales were up 9.9% on a same-store basis, while Australian sales fell slightly.
Michael Hill didn’t provide profit figures, but the sales boost in New Zealand is a good sign for profits here, and a good sign for the retail sector. The company noted that “retail has been challenging” in Australia, and that lower margins there “will adversely impact on profits”.
Michael Hill also has smaller operations in Canada and the US, and same-store sales in these countries also grew – by a significant 23.5% for the US. However, both the Canadian and US operations have tended to lose money in the past.
Overall, Michael Hill expects that EBIT will be up slightly for the half year.
IN THE PRESS
LOCAL AND INTERNATIONAL MEDIA HIGHLIGHTS 2 – 16 JANUARY 2012
Ethical shopping comes at a price
A Weekend Herald experiment has found that shopping with a conscience can add a quarter to the weekly food bill. The research found an average supermarket shopping bill jumped approximately 26 per cent when standard food items were replaced with ethical choices such as local, organic, free range and Fairtrade.
(Source: NZ Herald)
Kodak framed for possible bankruptcy
The suspicion that an icon of American business could have an unstable future pushed investors to dump stock in Eastman Kodak recently. The photography pioneer’s shares fell to a new all-time low after the Wall Street Journal reported that Kodak is grooming for a bankruptcy filing “in the coming weeks” should it fail to sell a trove of 1100 digital-imaging patents.
(Source: Inside Retailing)
RWC boost remains largely unseen
A recent Tourism Industry Association New Zealand survey has found just over half of tourism operators in believe the Rugby World Cup didn’t provide the tourism boost expected.
(Source: NZ Herald)
Kiwi fashion brand warms NYC
New Zealand Merino Wool apparel brand Icebreaker continues its international development, this month they open their second New York City store, a 1200sqft retail shop in the Meatpacking District. This store will position the brand within fashion retailers such as Hugo Boss and Stella McCartney in what is rapidly becoming New York’s urban fashion centre.
(Source: NZ Herald)
