The “store of the future”: DJs outlines its plans for online retail

By Claire Reilly

When David Jones announced a 20 per cent decline in its half-yearly profits on Wednesday, the results were quickly followed by a lengthy statement from the company, outlining the steps it intends to take to return the company to profitability over the coming years.

This “3 Point Strategy” also included a large section on DJs’ plans for Omni Channel Retailing (OCR). Omni Channel Retailing is certainly a buzz-word at the moment, with Myer and Harvey Norman both recently using the phrase to describe their forays into the online world (despite Gerry Harvey saying there are “no internet sales in the world [of Whitegoods] to speak of” and that “sales on the internet are zilch” for furniture).

While it’s easy to espouse (or deny) the benefits of going online, David Jones is one of the few companies in Australian retail to outline its plans for OCR.

According to DJs CEO Paul Zahra, “There is great potential for well managed Omni Channel department store businesses that build on their existing network of stores, their existing customer base and their existing brand positioning to offer customers new ways to shop and different shopping experiences".

Zahra also acknowledged that the company’s “transformation into an OCR will take time,” but said “we are confident we can move at the right pace to capitalise on this opportunity”.

And there are certainly plenty of motivating factors for expanding online, with Zahra saying that “Omni Channel shoppers are four to six times more valuable than single channel customers”.

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In its 3 Point Strategy, the company detailed the inroads it had made into online retail, including the launch of a mobile site in September 2011, and the launch of Gift Finder and Christmas Hub sections of the site at the close of the year, as well as a dedicated Brand Finder.

Moving forward, the company plans to implement new order and warehouse management systems, with the launch of a new webstore expected to launch in the first quarter of 2013. The webstore will expand from 9,000 SKUs up to 90,000, and will feature “enhanced functionality such as customer reviews and ratings, additional carrier options and additional payment plans” to “ensure that David Jones’ online offer is competitive from both a local and international perspective”.

The company also plans to launch a “transactional mobile web-store” to allow customers to “research, browse and shop on the go across all major mobile devices”; a new mobile application and a “Social Commerce Store” which will allow consumers to shop through the David Jones Facebook page.

“The Company is planning to invest, learn and respond to its customer’s needs and to continue evolving. Significant capital has been set aside in the Company’s Capex [Capital Expenditure] allocation each year to address components of its OCR offer.”

With Zahra himself noting that online retail made up 4.9 per cent of total retail sales in 2011, the company is certainly making a hefty investment in its future for something that may not seem a large part of its core business. Whether this “store of the future format” will be successful remains to be seen.

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