Contemporary Issues in Retail Management - Australian Market Trend - Literature review Example

Contemporary issues in Retail Management Name: Course: Institution: Instructor: Date: Contemporary issues in Retail Management Abstract It is apparent that the recent increase of retail businesses in Australia deserve recognition. However, little literature has been developed in regard to this imperative sector and its contribution to the national economy. In addition, dynamism in this sector has transformed the management trends of these businesses geared towards meeting the heightening consumer demands, matching the changing trends in technological advancements and above all, maintaining a competitive advantage among the firms. The generic objective of this report is to give an insight into the aforementioned phenomenon through exploring some of the contemporary issues in the management of these retail enterprises. However, it is worth noting at this juncture that retail businesses in Australia and in the global scale continue to be confronted by adverse impediments in their efforts to remain competitive and attain a favorable niche in the modern market. Some of the inherent challenges include but not limited to changing consumers preferences, technological dynamics which in turn affect their marketing trends and cut-throat competition, mostly from larger organizations. Therefore, this report will generate a comprehensive understanding on the preceding reality and eventually elicit an ideal management mechanism of the retail businesses in Australia, which can be replicated in other parts of the world. Keywords: Retail, Management, Channel extension, Trends. Table of contents Abstract………………………………………………………………………………..Pg. 2 Introduction……………………………………………………………………………Pg.4 Major Trend identified………………………………………………………………...Pg.4 Contemporary issues in Retail Management…………………………………………..Pg. 4 a. Channel extensions to satisfy the increased demand for Retail Products…Pg. 5 b. Channel extensions to meet the New consumer demands of ‘specificity’…Pg.6 c. Channel extensions to satisfy the changing nature of Australian Economy..Pg.6 d. Channel extensions to counter increased Competitiveness in Australia’s retail Business……………………………………………………………………..Pg.7 e. Channel extension to satisfy the demand for Communication Technology in Retail Business…………………………………………………………………….Pg.8 Mortar and Brick retail shops…………………………………………………………..Pg.8 a. Complex Environment for Growth………………………………………...Pg.8 Conclusion……………………………………………………………………………...Pg.10 References……………………………………………………………………………...Pg.11 Introduction Good management of retail business isn’t limited on the existence of a flashy store. Indeed, the increased competition in retail business all over the world has led to new demands by the businesses that have made it in the retail business. The Australian market just like other large economies has gone retail, where many of the customers have had preference to purchase items from the retail stores that offer the best items at the best prices. The increased demand for customer tailored products which added services such as transport has also led to many customers in Australian to have preference to make orders from the retail stores that are closer to them, as well as those that will give them goods and services that would satisfy their desires. However, the management of these retail outlets is confronted by diverse issues. For instance, MacGregor and Vrazalic, (2006, p.1) cited that despite e-commerce being perceived as a “business enabling technology”, small scale businesses, which mostly encompass the retail outlets have not fully embraced it in a similar manner evident in their large-scale counterparts. Major Trend identified The key trend influencing retailers in Australia currently is the rapid growth of channel extensions of retail stores. In addition, the heightened acceptability of e-commerce in business operations has triggered an avoidable necessity to embrace it among retail outlets. The specific existing retail format that is affected is the mortar and brick retail stores in Australia. Contemporary issues in Retail Management The retailers in Australia have had to come to terms with this changing trend as many new retail channels have been opened in Australia. Indeed, there are main changes in the market that has affected business in Australia. The Australian market changes affect the retailer the most since most of the retail business are the ones that serves the largest percentage of people. Indeed, apart from a few industries which have not gone retail, most of the businesses have gone retail by opening various retail stores in various parts of the country. The contemporary Australian market has been characterized by the expansion of the retail market in the urban centers. The major trend in the Australian retailing business lie in channel extensions as the retail businesses seeks to capture the new markets that were effectively not reached before. The increased population in Australia’s urban population has led to the need for more retail channel extensions of business so as to satisfy the emerging markets. This has been propelled through the advanced technology that is prevalent in the contemporary world. This has also helped in elevation of efficiency in the retail business. According to Huber & Michael (2008, p. 4), technologies in the retail industry are endowed with the capacity of enhancing the efficiencies of the supply chain as well reducing shrinkage. Another trend has been the move towards merging and partnership among the players in the retail industry. This is evident in the pharmacy industry, According to the Management update (2011, p.67), a partnership between Priceline Phamacy, Medimobile and Sanofi Pasteur was forged after a successful pilot professional program in year 2010 which was delivered in contraception and heart health in the latter year. However, the following have been the major trends in regard to retail management in Australia. a. Channel extensions to satisfy the increased demand for Retail Products Australia’s consumer market today’s has been subjected to an increase in demand for retail products. This has been so evident in the household products, as well as other consumables. There has been an increased number of consumers of products such as food, clothing, and other items who would want to make their purchases from the retail centers. Jensen and Webster (2008, p. 132) determined that one of the most prevalent trends in most developed countries including Australia is the elevated market penetration for general or basic goods. This is best exemplified by the fact that in the period 1986-2004, there was a considerable increase in the amount of income that was spent on goods that are sold in supermarkets. Most of the urban dwellers prefer the products from retail stores because of the flexibility of access to the retail stores, as well as the flexibility of the costs due to the varieties of brands that are present in most of the retail stores. This has caused the demand for retail products to rise, and thus has welcomed the trends of establishing new brands, as well as to expand the channel extensions so as to satisfy this demands. Today, the Australian retail market is rapidly expanding, new channels are being established, as well as the common brands are now being split to more specific brands to capture the demands of the specified market segments. b. Channel extensions to meet the New consumer demands of ‘specificity’ The open market fully fledged capitalistic economy has led to increased flow of products into and out of the country. This has had a significant impact to the economy. This is because the economy has been characterized by customers developing much more specific demands for goods and services. The increased demand with regard to specific requirements that certain segment of consumers would want has made the big stores to split their operation into retail stores that offers the tailor made services and products that the consumers want in that market. This has led to increased need to develop new brands of products that would satisfy the specific need that the consumers have developed. c. Channel extensions to satisfy the changing nature of Australian Economy The Australian market has been for a long time been characterized by large stores and business ventures that have controlled the economy. However, the increased opening of the market has led to new business ventures which has changed the way business runs. Today, Australia has many retail stores that run their business in the country. Indeed, the economy has changed from being dominated from the large stores to retail stores. Even the large stores have considered opening new retail stores so as to increase sales. The influence of the customer in the businesses has also been elevated. This latter transformation in the retail sector has been propelled by the internet which has enhanced the level of knowledge among the consumers. In this regard, comparison shopping online has been paramount in enabling the consumers to possess the best knowledge before they move in to purchase the products. This has increased the pressure on the retail shops, increasing the level of competition and price ‘wars’ among the players (Natalie, 2011, p. 34). d. Channel extensions to counter increased Competitiveness in Australia’s retail Business The retailers in the Australian market due to the market forces also have had to come to terms with increased competition that has characterized by the economy. It is evident that the economy has risen to be very competitive due to both internal and external factors. The new global patterns of business have influenced retail business as the local retail stores strive to meet the global standards of business. According to Northcliffe Newspapers Group Limited (2010, p. 14), this has necessitated the advent of competitions among budding retail entrepreneurs aimed at generating prudent ideas in retail business. This has been necessitated by the changes that are evident in retail and the levels of unemployment. Thus, these retail competitions are practical ways of transforming an idea into a career. Increased competition has also been boosted by the free market where other investors from states such as the United States have come to invest in the economy. This has led to the businesses taking initiatives to attract the target consumers. The increased competitiveness in retail business has developed the need to increase branding of the retail products, as well as to expand the channels by which the products can be sold. e. Channel extension to satisfy the demand for Communication Technology in Retail Business The developing business communication technology has also affected retail business in Australia. This has been through changing the modes by which the consumers would make orders from the stores, or be informed of the brands which are available in the market. In the past, most of the retail stores were brick and mortar stores, however today most of the stores have introduced e-business where the consumers can be able to get to know the available brands in the stores, their prices, as well as make orders and pay for the products or services by online means (Wamba & Boeck 2008, p. 92). In addition, MacGregor and Vrazalic (2006, p.3) cited gender factors as a major impediment to the adoption of e-commerce. They inferred that there is a relationship between e-commerce barriers and gender which has a massive implication for the eventual adoption of technology. Mortar and Brick retail shops As previously discussed, the key trend influencing retailers in Australia is the rapid increase in channel extensions by retail businesses. The specific existing retail format that is affected is the mortar and brick retail shops. The retailers who have practiced business in this format have been affected by the increasing channel extensions of stores in the following ways. a. Complex Environment for Growth. In Australia, the retailers have faced the challenge to push their growth due to the complex environment that is expected to boost trade. In the past, the retailers have attracted customers by building flashy stores, employing high technology, as well as stocking their stores with the latest fashions and products ad this has effectively worked (Georgios & Asspasia 2011, p 248). Today, the Australian market is much complex since most of the consumers are not driven by these variables instead they have other specific needs they would consider before making a purchase (Mantrala, 2010, p.101). It is evident that the traditional growth models used by retailers which were more focused on rolling out more stores, as well as product lines today have not guaranteed a high return on investment as they did in the past. However, despite this challenge research has revealed that a handful of the current retailers in the Australian market have significantly outperformed the market. This has made the retailers to dig deeper into research on how retail business can be promoted. This has led the retailers to take on new branding initiatives that would attract the existing consumers. This is because the retailers have had to adapt to the new environment and custom tailor their services so as to attract the consumers (Marrett &Worthington 2011, p. 118-121). In addition to the mentioned dimension, the Australian retail business has developed to fit to the ‘margin-driven business environment’ that has become in Australia. This is through employing smart business decisions in their actions. In this case, the retailers have developed much interest in developing decisions that are aligned to the business goals (Jeffrey 2010, p. 16-17). Technology dimension has also played a big role in shaping the retail market in Australia, and has affected the decisions that retailers have had to make. This is because most of the consumers of retail stores are well equipped with the 2.0 technology, and this has shaped their tastes and preferences of the products. In addition, the retail business has been characterized by in-store advertising, alongside the use of promotional emails to conduct business. ‘Kiosk’ kind of retail stores are being replaced by new payment technologies such as vending machines (Wamba, & Boeck 2011, p. 97-101). As mentioned before, development of new brand, as well as establishment of new channel extensions has characterized the new trend in retail business in Australia. This trend has been necessitated by the desire by the retailers in Australia to expand their sales amidst the increasing complexity that has developed in this The Australian retail market has also taken on two main formats, where the retails businesses in the economy have been split into two. The mega-retail formats which is made of the large stores, and the specialists dominating stores which have specialized on certain products. For a long period of time, the retail stores have been characterized by sale of a variety of brands, though today an increasing number of stores have specialized their products, as well as services so as to attract a specific customers. Conclusion All in all, we cannot underestimate the Australian market trend that is driven by the desire by the local retailers to build a sustainable retail practice. The pressure to develop more environmentally friendly retailing practice has also been evident in Australia. This is advanced with regard to how the retail stores design, source, pack, and distribute their products. The paper has identified the market trends of retail business in Australia, as well as how the retailers have had to respond to the trends. The dimensions by which the retail business has taken on have been discussed even as the market is said to get much more complex with time. References Georgios, G..K & Asspasia, D, (2011),Normative Conflicts in electronic Contracts, Electronic Commerce, Research and Application, 10 (2), 247-267. Huber, N. & Michael, K. (2007). Minimizing Product Shrinkage across the Supply Chain using Radio Frequency Identification. University of Wollongong, Dubai. 1-8. Jeffrey, E (2010), Retail Strategies, Managed Healthcare Executive, 20 (9),16-17. Jensen, P. H. & Webster, E (2008), Labelling characteristics and Demand for Retail Grocery Products in Australia, Australian Economic papers, 47 (2), 130-140. MacGregor, G& Vrazalic, L (2006) Sector Driven Variations on E-commerce Adoption Barriers in Regional Small Businesses: An Australian Study, University of Wollongong, Dubai, 1-5. MacGregor, R & Vrazalic, L, (2009) The Role of Gender in the Perception of barriers to E-commerce Adoption in SMEs: An Australian Study’, Communications of the IBIMA, (4) 18, 141-147. Management update (2011), Priceline Rolls out Australia’s largest walk-in Immunization Program; Better Retail news from Mid-2011, The Australian Journal of Pharmacy, 92, (1092), 67. Marrett, G & Worthington, A (2011), ‘The Month-of-the-year Effect in the Australian Stock Market: A Short Technical Note on the Market, Industry and Firm Size Impacts’, Australasian Accounting Business and Finance Journal, 5 (1), 117-123. Mantrala, K. (2010), Retailing in the 21st Century: Current and Future Trends. London: Springer. Natalie, A (2011), Australia's retail revolution, Charter, 82 (5), 32-35. Northcliffe Newspapers Group Limited (2010) ‘Retail competition offers chance to set up business’ Evening post, 11, January, p. 14 Wamba, S. F & Boeck,H (2008) ‘Enhancing information flow in a retail supply chain using RFID and the EPC network: a proof-of-concept approach’, Journal of Theoretical and Applied Electronic Commerce, 3 (1), 92-105. Read More