1. Retail: Department stores
Briefing notes and sales support
for news media sales teams

2. What’s in this deck?
This deck is split into three sections: Section 1 An overview of the Australian retail market The 2015 Media i Industry Survey asked agencies “what are the most important factors when dealing with media owners”. The most common factor (52% agreed ) was “understanding of your client’s business and category”. Section 1 of this deck won’t make you an instant expert, but it will help get you up to speed on the most important facts about the category.
Section 2 Focus on department stores This report will focus on department stores. Additional reports featuring on the NewsMediaWorks website cover other key retail sectors. Section 3 Support slides for sales presentations Every great sales presentation is tailored for each client, but some points fit most clients within a category. Section 3 contains research about how consumers make department store purchases, and how news media can help drive sales.

3. Section 1 Retail market: an overview

4. Retail: core of the consumer economy
Turnover: $24.9bn month
Almost 135,000 retail businesses employing 1.3m staff
Sources: Australian Bureau of Statistics:
Retail Trade, Australia, March 2016.
Labour Force, Australia, Detailed, Quarterly,
81650 Counts of Australian Businesses, including Entries and Exits, Jun 2011 to Jun 2015.

5. Retail growth prospects for 2016
Retail growth was strong for most of 2015 despite less than expected growth for the Christmas/post-Christmas sales period.
Forecasts for the remainder of 2016 are for continued growth albeit at a reduced rate.
Source: economics.com/australia/retail-sales-annual/forecast; ABS

6. Retail: key sectors $24.9 billion/month Retail Food $10.1bn $4.4bn
Household goods
$4.4bn
Cafes, restaurants & takeaway food
$3.4bn
Clothing, footwear & accessories
$2.0bn
Department stores
$1.6bn
Other retail
Household goods (furniture, housewares, electrical/ electronic goods, hardware, building & garden supplies): 17%
Cafes, restaurants & takeaway: 14%
Clothing, footwear, accessories: 7%
Department stores : 6%
Food retail (supermarket/grocery, liquor, specialty food): 43% of all retail spend
Source: Australian Bureau of Statistics Retail Trade, Australia, March 2016.

7. Retailers: big spenders on advertising
According to the latest Advertisers Report, retailers make up 4 of the top 5 advertisers, and 11 of the top 25.
Retail accounts for 47% of total ad spend for the top 25 advertisers.
Retailers are also big spenders on news media, accounting for almost half of the top 25 news media advertisers.
Source: Ebiquity, 2014 Advertisers Report

8. Section 2 Department stores

9. Department stores: returning to growth
Estimated revenue: $18.8 billion
Annual growth ( ): 2.6%
Annualised growth ( ): -0.1%
Forecast annual growth ( ): 0.5%
Businesses: 143
Source: IBISWorld, Department Stores in Australia, April 2016.

10. Value-oriented stores on solid foundation
Overall visitor numbers declining: -4% (-547,000)
Mid-market or discount department stores such as Target and Kmart have experienced a lower decline in visitor numbers than high-end department stores such as Myer and David Jones.
12-months to:
Figures refer to people who have shopped at a department store in the last 12-months. Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending March 2016.

11. Key market segments
People aged 30 to 44 are most likely to shop at department stores.
Market slightly skewed towards women.
Women: 53%
Men:47%
Women aged 30 to 44 are 9% more likely to shop at department stores compared with the population norm.
Men aged are least likely to shop at department stores: index 9% below population average.
Figures refer to people who have shopped at a department store in the last three months. Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending March 2016.

12. Key product segments
Sales dominated by clothing, footwear and accessories: 35% of total revenue.
But declining as a percentage of total sales due to cautious consumer spending and growing competition from online stores and international retailers.
Household appliances and consumer electronics segment declining
Strong competition from specialist operators, and Myers’ exit from the whitegoods and gaming console categories, have caused these product segments to decline as a percentage of sales.
Source: IBISWorld, Department Stores in Australia, April 2016.

13. Department stores: a changing landscape
Increasing trends
Competition from online stores , major international clothing retailers and specialty retailers.
Department stores’ investment in their own online shopping platforms 
High-end department stores introducing exclusive brands to their product ranges
Product discounting
Share of revenue contributed by books, magazines and other printed materials
Clothing, footwear and accessories segment 
Decreasing trends
Sources: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending March 2016; IBISWorld, Department Stores in Australia, March 2016; Deloitte, More international retailers to target Australian market in 2016.

14. Section 3 Support slides for sales presentations

15. About these slides
The following slides provide general supporting arguments to assist sales teams when building client-specific presentations. The purpose is to open discussion, to demonstrate a basic understanding of factors that drive sales in department stores, and to show how news media can help to influence the sales process.
These slides are intended to be used in a presentation after recapping the brief, and before presenting analysis and recommendations tailored to the specific client. Needless to say, they can and be should be adapted to suit your particular presentation requirements.
Recap client/agency brief
Supermarket industry support slides
Client specific analysis
Recommendations

16. Department stores: still big business
10.7 million consumers shopped at a department store in the last month.
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending March 2016.

17. …but competition is intense
Competition is increasing as department stores compete with specialist stores and online retailers to retain market share.

18. Mess reach and engagement
News media provides mass reach and drive shoppers in-store
With department stores appealing to most of the population, they need mass reach media to communicate their offers. News media performs this role perfectly, reaching 93 per cent of department store customers every month.
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending March 2016; Nielsen DRM March 2016, People 14+ only.

19. Shoppers are frequent and engaged news readers
Newspapers rate No.1 for heavy media consumption in regular department stores shoppers, indexing higher than any other media in comparison to all people.
Regular department store shoppers are 11% more likely to be heavy newspaper readers (7+ issues per week)
Regular discount department store shoppers are 14% more likely to be heavy newspaper readers (7+ issues per week)
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending March 2016.

20. Engaging with digital news on all platforms
Department store shoppers’ liking for news extends to the various digital formats too, with 59 per cent of readers of digital news content having visited a department stores within the last month.
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending March 2016; Nielsen DRM March 2016, People 14+ only.

21. Newspapers aid decision-making
1 in 4 buyers identify newspapers as the most helpful media to turn to when they’re in the market for white goods, consumer technology and homewares.
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending March 2016; Nielsen DRM March 2016, People 14+ only.

22. Readers are better prospects than non-readers
News media readers buy more often than non-readers
They are 12% more likely to have shopped at a department store in the last month than non-readers.
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending March 2016; Nielsen DRM March 2016, People 14+ only.

23. High-value consumers
News media readers are happy to spend big across key department store categories
Compared with non-readers, news media readers are 31% more likely to be among the top 20 per cent of spenders on white goods.
Readers of digital news content are 11% more likely to be among the top 20 per cent of spenders on audio-visual equipment than non-readers.
They are 30% more likely to be among the top 20 per cent of spenders on watches, jewellery and accessories than non-readers.
The top 20 per cent of spenders on homewares, furnishing and men’s footwear are 11% more likely to be heavy newspaper readers.
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending March 2016; Nielsen DRM March 2016, People 14+ only.

24. News media readers share their opinions
83 per cent of consumers believe recommendations from friends and family over all forms of advertising
News media reaches 92 per cent of those who are regularly asked for their opinion on key categories within department stores, and encourage purchase because of a good experience
News media reaches:
2 million readers who encourage others to buy fashion items
92% of people who encourage others to buy luxury goods
700,000 readers who are often the first person in their network to try-out new cosmetics
28%
of news media readers influence others to buy tech gadgets
Sources: Nielsen, Global Trust in Advertising, September 2015; emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending March 2016; Nielsen DRM March 2016, People 14+ only.

25. Readers respond to online offerings
News media reaches 92 per cent of online shoppers.
Digital audience are 13 per cent more likely to shop online in the last month than non-readers.
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending March 2016; Nielsen DRM March 2016, People 14+ only.

26. Go local
Research shows that both regional and community newspapers are more effective at driving shoppers to stores than other local media
Readers of regional and community newspapers are far more likely to act on newspaper content versus something they see on local TV, hear on local radio or see in catalogues or flyers:
Some 58% of regional newspaper readers and 62% of community newspaper readers say they have visited a store because of newspaper advertising.
With regional and community newspapers having defined geographical footprints, department stores can localise their advertising, targeting consumers with offers in specific stores.
Source: Newsmediaworks, Window shopping: department stores still big business, May 2014.

27. Print ads work hard for retailers
A recent Creative Benchmarking study shows newspaper advertising drives consumers in-store and improves brand perceptions.
More than one in three (35%) women who saw Myer’s Estée Lauder ad were excited by the offer, saying the ad gave them a reason to visit Myer.
One in four (23%) said they would visit one of the stores advertised, while 14% said they would make a purchase in Myer based on the ad (that’s 8% more than the newspaper norm).
The ad also significantly boosted brand equity for Myer. Some 28 per cent of readers said the ad gave them a positive feeling towards Myer.
Source: Newsmediaworks, Creative Benchmarking: DJs v Myer: How creative made a difference, January 2015.

28. 93% 72% 78% Combine and conquer
Print
72%
Digital
78%
The combined reach of print and digital news media:
93%
of people who have shopped at a department store
in the last month.
Source: emma™ conducted by Ipsos MediaCT, People 14+ for the 12 months ending March 2016; Nielsen DRM March 2016, People 14+ only.

29. Client specific analysis & recommendations
This is the point to bridge to a client specific discussion.
Each presentation will need to be individually tailored to suit the client and their objectives, but the logical flow from here is to move on to
Analyses that address the client’s specific situation, challenges and opportunities.
Solutions using your inventory, giving clear reasons why they are appropriate to the client’s specific needs, and suggestions on how they can be used most effectively.