I’m not alone in wondering how long Myer (ASX:MYR) is going to be around. Sales have been trending down for some time now. The share price is going in the same direction. Myer has $2.7 billion in lease commitments thanks to its previous private equity owners. A shrinking business with high fixed costs sounds dangerous.
Improving the bricks and mortar experience
If Myer is going to survive, things need to change. The company’s ability to compete – indeed any department store’s ability to compete – is in offering a unique customer experience.
Sephora is a great example of a full-service retail store. Stores are always well-staffed with professionals who are genuinely passionate about cosmetics. Sales staff can tell you about products from various different brands and recommend something specific to you, according to your skin type and concerns.
Myer has been doing the opposite. Cutting costs and reducing staff and thinking that sales will hold up. My past experiences at Myer involved walking into a giant multi-level store and trying to find my way to the product I was looking for. It usually involved minimal human interaction. Most people I have spoken to have had similar experiences.
That’s why I was very interested to hear from Robbie Tutt, the General Manager of Omni Channel at Myer, when I attended the Online Retailer conference in Sydney late last month. He was quick to admit that the current Myer experience is simply not good enough.
When asked how Myer plans to compete with Amazon, Robbie responded that they would survive by sticking to their core and improving customer service in-store. “Myer has 63 stores. Something that Amazon doesn’t have”.
Some anecdotal evidence
On my way back to the office after the conference I ducked into Myer on Pitt Street to see whether there was any change to back up the rhetoric. I wandered straight up to the womenswear section where I noticed a senior manager standing in a huddle with a number of sales staff.
They were discussing product placement and how to best interact with customers. Every time I turned around, there was an employee offering to assist. At one point I had a sales assistant hand-selecting items and offering advice on different styles, sizing and fit. She then walked me to the counter and put the sale through herself. It felt almost like a personal shopper experience.
There might be some recency bias at play here but it certainly didn’t feel like the other times I shopped at Myer. I walked out with a new jacket. My first Myer purchase in a couple of years.
Not an easy path
It seems Myer is acknowledging the issues with their current model. Anecdotal evidence suggests that the company is actively trying to improve the customer experience.
It’s not that simple though. Myer gained popularity in a time when department stores were smaller, and trained staff were able to assist across multiple brands and product lines. In the big box stores we see today this kind of service might not be possible. I’m not convinced at this stage. We won’t be buying the stock in a hurry but my recent store experience has given me a little bit of hope. Has anyone else noticed a change in the customer service experience at Myer?
8 thoughts on “Is Myer Moving in the Right Direction?”
Funny you mention this as I too purchased a jacket from Myer last week
As many others I have been watching the progress / demise of Myer over the past couple years looking for signs of a turn around that could very profitable for shareholders.
As a male that avoids shopping as much as possible and minimises the duration, I found myself wandering around in a large store (Garden City Brisbane) trying to find the men’s section with limited staff members
What did surprise me was once I found the menswear section the assistant was excellent she was knowledgeable on the products and also took me right through to the checkout.
Far from an expert but my personal opinion is that this won’t be enough to get me back in store regularly
A few things I noticed:
Many store items were on sale
There were very few customers in store
There were no visual displays that jumped out at you only on sale signs
No interaction from other staff that I walked past
Maybe the only hope lies with Solomon Lew?
I went to a presentation Myer did to it’s suppliers and other key accounts about 18 months ago and it was basically filled with empty management rhetoric. Talking about “busy mums called Jenny” or the happy couple in the inner city. I thought about it again recently when Solomon Lew had a go at them for the amount of money they spend on consultants. I’ve been in the Bourke St Melbourne store a number of times this year and nothing seems different. There is always some sort of sale on. The staff were fairly disinterested. And the layout seems to be perpetually stuck in the 90’s, despite the Private Equity refit.
It was funny when they were talking about making the store more mum friendly and my only thought was, you make everyone enter through a tight labyrinth of expensive, breakable glass bottles. Once they get through that, they then need to go in and out of an elevantor with their pram 4 times to get to all the floors they need to go for all their shopping. Give the mum’s an express, separate entrance to a floor with a parents room, with a decent selection of women’s clothes, kids clothes, toys and small cafe and you’ll be trending on social media more than “Kmart Hacks”!
No. They have frequent so-called sales which discount much of their current stock by up to 40 percent. This is current stock, not old clearance stock, though that too is perpetually discounted. The only people likely to pay full price for clothing in particular, are the unaware or the impatient. In fact I’d suggest that anyone paying full price at anytime should feel ripped off, as there is every chance the same item could be on sale at a big discount within the following few days
The suburban stores I have been in to are frequently almost empty, and there are few of the critical younger comsumers of the future to be seen.
All anecdotal of course. I understand there is usually a price for just about anything, and Forager have a track record in that type of situation, but “dog with fleas” and all that…
Stock prices have reduced dramatically. The company definitely need a new direction and a new plan or otherwise it could be bought and merged with another one.
I typically do my business shirt shopping at Myer and from time to time I buy casual clothes as well. But Im not into paying $120 or more for a brand name especially when the majority of shirts including so called designer brands are made in China.
Secondly Im disappointed at the overall quality of clothing. I have seen t-shirts on the rack where the material is so thin that the collar is worn out before its first wash. I remember when a t-shirt used to last 2-3years but now a days its about profits.
Id be happy to pay a premium for quality but Myer needs to put pressure on its suppliers to lift their game and offer a quality product.
I sense a lot of bad management and poor investments.
Whilst Myer’s sales are great, the stores themselves are not appealing. The monotonous wooden flooring makes is hard to distinguish one department from the next. Whilst the men’s department is ok. There is no one to help you with advice and sizing. They don’t seem to have the well-known brands of good quality to justify the price Es they charge.
Was there yesterday in the tech section in Bourke St, customer came in wanting to buy an Apple iPad and the staff member told him they didn’t have it, go and check Chadstone or JB HiFi, before returning to chat with this workmate. As someone who’s spent 25+ years in sales and or customer service at some level, I almost had a go at him then and there. Needless to say I wouldn’t buy the stock.