Executive summary

This analytical report provides an analysis on the current and complex fashion market

situation of Myer. It examines Myer who is not only a fashion organization but also

offers Fashion and Lifestyle product lines. This report required an in-depth

understanding of theories and principles. The purpose of this report is instilling deep

sense of Strategies in Fashion and Textiles Marketing. The report further examines an

exploration of the Environment, Strategies of Myer and recommended Strategies for

the future of Myer.

The report finds Myer being in a difficult period of time in the Fashion Industry. The

major areas of weakness are their adaption to the rapid changes of technology and that

consumers now think of Myer as a price cutting company and not a prestigious

company. Their major strengths are having a loyal customer base and the historic

reputation that Myer withhold. The report also finds Myer has the ability to be a major

leader in the industry and progress on Sustainability once they furthermore their

procedures and strategies. The market isnt in an attractive position at the moment but

their company has a very high strength in order to not fall under. Myer have the power

to venture overseas and touch a new market segment.

Recommendations discussed in the analytical report include, Myer progressing to

become more sustainable and ethical, and to provide full transparency and

traceability. To expand overseas where department stores arent decreasing such as the

U.S.A. Adding more facilities such as a Childcare Centre within Myer to attract

parents who want to shop that have children and launching local Australian brands to

support their own country which consumers will be attracted to.

During the progression of this analytical report, limitations that arose were that a
university student using secondary research undertook the research. The use of

secondary research limits the accuracy of the information and data. All results found

were based on past performance and not present performance.

1.0 Introduction/ Context

This report analyses complex Fashion Business environment, market situation,

competitive position of Myer and recommend Strategies for the future growth.

The report touches upon the historical timeline of Myer, a brief geographical

scope of Myer, brands that are owned by Myer and brands that are Myers private

labels. Key strengths and weaknesses are also touched upon before they get more

in-depth within the TOWS Analysis. An analysis was then conducted within the

company and through analyzing Myer, recommendations were suggested. The

method of collecting this data was used through secondary research.

2.2 Strategic Time Line/Historical perspectives from 1990 2014

In 1990 the first Myer store was opened in Bendigo. Sidney Myer and his brother

whom were immigrants founded Myer. Sidney then opened another Myer in 1908

in Bendigo. Myers inventive advertising and exciting promotions acted as a

major draw card, increasing customer loyalty (Myer, 2016). Sidney then went

and opened another Myer in Bourke Street, which continues to trade today. They

called this Myer store, Myer Emporium.

The Myer Emporium catered to not only the wealthy, but to customers of all lives.

Myer was years ahead of any other retailers in offering visually appealing

merchandise set in an exciting shopping environment (Myer, 2016). Sidney brought

2
innovative marketing and sales campaigns to customers. The increasing demand for

new products led to the opening of the first Myer factories in 1915.

By 1920, Myer Emporium became a focal point of Melbourne rapidly. Although The

Great Depression happened in 1929 (till 1939), it was said, Myer Emporium

emerged triumphant and Sidney would become a local hero through his selfless acts

of generosity (Myer, 2016). It was then in 1928 that Myer opened another store in

Adelaide.

At the end of the war, it provided the Myer family with the perfect opportunity to

bring all the theatre and excitement of shopping at the Myer Emporium to a new retail

market (Myer, 2016). In 1950 shopping at Myer evolved into a cultural experience

for consumers. In 1956 the Summer Olympic Games were held in Melbourne, which

saw Myers windows have a display of the Olympic Rings in Bourke St. Still to this

day, this is a traditional aspect of Myer. In 1960, Myer Emporium built and opened

Chadstone Shopping centre.

Myer continued to rapidly expand in the 60s and 70s. Myer had diversification for

the business, seeing Myer branch into discount department stores, specialty

fashion retailers, fast food outlets and ventures in land development, travel, finance

and film production (Myer, 2016).

In 1985 Coles and Myer merged. It was a $1.07 billion merge. It was the largest deal

in Australian Corporate History (Myer, 2016). Because of Coles and Myers merge,

they continued to diversify. They introduced diffusion lines such as Myer Sport, Myer

Electric, Myer Home, Myer BIB, Megamart and Good Buy Warehouse. Throughout

the 90s Myer gained a strategy to bring back customers; Myer One Loyalty Program.

In 2009, Myer was joined on board with the Australian Securities Exchange. In 2014,

3
Myer have officially 67 stores located across Australia, in prime retail spots.

1.2 Geographical Scope

At the moment Myer is a regional niche company. They have 67 stores located across

Australia, those of being in Victoria, Tasmania, Queensland, New South Wales,

Western Australia, South Australia and Canberra. For Myer, international expansion

seems inevitable. There arent many new sites where we can build Myer stores so we

are forced to look overseas (Brookes, 2010). Before Myer ventures overseas they

need to make sure that they are generating sales and more sales than they expected so

that they can assure they will be successful overseas. Although the target market will

be different as its in a different country, Myer need to make sure they are above their

game in their home country before venturing overseas.

1.3 Brands / Markets / Products

Myer owns/private labels

Sass & Bide fashion wardrobe for women, they are available in over twenty

countries and ships overseas to the UK, USA and NZ (Sass & Bide, 2016).

Piper youth fashion for girls, they are available in twenty stores across VIC, NSW,

SA and WA and also on ten websites (Arch Fashion 2016).

Miss Shop youth fashion for girls, they are only available in Myer concession stores

in Sydney and Melbourne and are available online through the Myer website (Miss

Shop, 2016).

4
Chloe and Lola intimate apparel for women, they are available in fifteen stores

across Melbourne and Sydney and are also available on ten global websites (Net-e-

porter, 2016).

Basque fashion for middle-aged women, only available at Myer in Melbourne and

through Myers online website. (Myer, 2016).

Brands available at Myer

Asilio fashion wardrobe for women, they are available in fifteen stores around VIC,

NSW, SA and are available in Myer. They are across thirty online stores and they are

also about to launch in the U.S (Arch Fashion, 2016).

Acler fashion wardrobe for women, they are available in sixty-six stores across

Australia and America and also feature in ten online websites including their own

(Acler, 2016).

Misha Collection high-end fashion for women, they are available in only five stores

across NSW, SA and VIC and they are also available across eight online stores (Arch

Fashion, 2016).

By Johnny high-end fashion for women, they are available in fifteen stores around

NSW, QLD, SA and are available in Myer. They also have their own website and are

available through two other online websites (Arch Fashion, 2016).

5
White Suede fashion wardrobe for women, they are available in Melbourne and

Sydney, having three boutiques and two concession stores and are also available

online globally (White Suede, 2016).

1.4 Key Strengths and Weaknesses

Strengths

Australian chain of upscale mid to high range departmental store

Myer has stores all across Australia
Variety of brands in affordable price gives consumer a lot of choices
Strong brand presence and reputation in Australia
Customer-focused service
Loyal customers
Strong brand equity

Weaknesses

Undeveloped distribution channel, which serves only in some locations in

Australia
Retail area prices are increasing still it has inadequate usage of area in

showrooms
Target consumers are present only in Australia and no global presence
Undeveloped online presence
Not innovative
Not diversified

(Zigu, 2016)

2.0 Analysis of Environment

2.1 Environment (PESTEL) leading to key Opportunities and threats

Political

Foreign Trade Policies

6
 Tariffs
Cheaper Imports/exports
Stability of Government
Entry Mode Regulations

Threats that could potentially have an influence on Myer are the foreign trade policies

with Asia. This could affect Myer as if the trade policies change, Myer have to make

changes to suit them. Tariffs are also a major influence as most companies would

rather not pay a tariff so having it in place means its more expensive. Myer need to

consider how much tariffs are when they are purchasing. Myer could also come across

a period of time where it is cheaper to import merchandise rather than export or

importing could become cheaper all together which means Myer are more likely to do

a lot of importing in that period of time to allow them to save money. Stability of a

government is critically important as if the government isnt stable it provides the

industry with instability. Entry mode regulations differ in degree of risk they present,

the control and commitment of resources they require and the return on investment

the other party promise (Pestle Analysis, 2016).

Social

Aging Population
Trends
Lifestyle Changes
Competition
Distribution of Wealth
Educational Levels

7
The aging population is on an increase which influences Myer heavily as in future

they will need to cater more to the aging population rather than the younger

generations or they could potentially have another level for an older target market

which they dont necessarily have. Forth-coming trends have a substantially large

impact on Myer as they need to be able to keep up with this and being able to forecast

trends will allow Myer to do so. Changes in lifestyles are important to Myer, as they

need to recognize and act upon these once these changes start occurring. Competition

is high for Myer as David Jones is a very strong competitor so Myer can either step-

up to their competition by using technology to their advantage or stay behind their

competitors. Distribution of wealth and educational levels can also impact Myer

(Pestle Analysis, 2016).

Ecological

Sustainable Practices
Ethical Practices
Waste Disposal Laws
Environmental Protection Laws
Energy Consumption Regulation
Consumers Attitudes Transforming

Myer claim to have sustainable practices although according to IBIS World reports

they received a C for sustainable and ethical procedures. Sustainability is becoming

8
more of a set-life style rather than a trend and over the years Sustainability will

become more important to those who arent necessarily concerned about it now. Myer

recycle 58.3% of their waste according to the Myer Annual Report, 2016. Ethical

procedures such as buying from companies where they know no person is being

exploited or miss-treated is an opportunity for large companies like Myer to be a step

ahead of their competitors. Myer have the ability to become a major leader in the

industry which means recycling should come after going through sustainable and

ethical procedures to get their merchandise. Myers reduction of green house gas

emission was only 3% (Myer Company Review, 2015), which could be dramatically

increased. Waste disposal laws, environmental protection laws and energy

consumption regulation are all of interest that impact Myer. Consumers have more of

a popular attitude towards the environment, which is becoming more than a trend

(Pestle Analysis, 2016).

Economic

Recession
Employment Rate Decreasing
Disposable Income of Buyers
Credit Accessibility
Fluctuation of Australian Dollar
Interest Rates
Inflation

If there was to be a recession, this would impact Myer on a whole other level as they

would have to cut prices down dramatically which could help them in the longer run

as Myer could win time and wait for more advantageous circumstances which would

be a better situation in the market. Myer would hopefully survive this period and

9
could potentially rebuild itself in the future, which could also provide the company

with better conditions. A recession though, could impact Myer very negatively as they

could lose a whole heap of money. Studies suggest employment rate is decreasing for

young people which, could have an impact on Myers hiring process and also the way

consumers spend their money as its normally younger generations who spend the

most money but if the chances of them receiving jobs are low they will a less chance

to spend more money. Disposable income of buyers and credit accessibility also

impact Myer and they can either take an opportunity to strategically attract those

consumers or not attract them towards buying. The fluctuation of the Australian dollar

is a major influence to Myer as it determines whether or not they can import and

export, as sometimes it will work in their favor but other times not so much. Interest

rates and Inflation are also necessary to Myer as they can be a threat or to seize an

opportunity (Pestle Analysis, 2016).

Technological

Technological Advances
Rate of Technological Obsolescence
New Technological Platforms
New Discoveries and New Innovations

Advances in technology could be a potential threat to Myer if they do not continue to

seek ways in innovating. Technology is going to continue on an up-rising spiral so

Myer must keep up with this. Technology advances can also be a major opportunity

for Myer to reach a wider range of consumers across the globe and their home

country. As Myer have been known to be quite late to adapt to technology, they cant

10
afford to play catch-up in the industry as they might get too far back and fail to keep

up with their competitors. Rate of technological obsolescence is increasing so Myer

need to keep very close with this whilst also new technological platforms are also

increasing. New discoveries and innovations are created every day, which Myer need

to be on top of (Pestle Analysis, 2016).

Legal

Workers Rights
Consumer Education
Income Distribution
Trade Embargo
Employment Regulations, Product Regulations, Competitive Regulations
Health & Safety Regulations

Workers rights can be an opportunity for Myer to be a major leader in the industry and

gain more customers by doing the right thing by the world. Consumers are starting to

become more educated on ethical procedures and starting to care more for where their

products are coming from. It can be a threat to Myer if consumers found out that they

arent having their products manufactured in a company where there are no workers

rights or standards. Traceability and transparency should be key items to Myers

strategy. Income distribution is also a major factor within the company, as everyone

needs to be paid equally and fair. Child labor should be important to Myer, as

consumers wouldnt buy from Myer if they were exploiting kids. Myer could put a

11
trade embargo on suppliers or countries where they know it isnt ethical to buy from.

There are changes within employment regulations, product regulations, competitive

regulations and health & safety regulations that Myer need to follow that can change

the way Myer thought they would be able to run the company (Pestle Analysis, 2016).

2.2 TOWS Analysis

External Opportunities External Threats

Exclusive Competition from

partnership with other department
Topshop/Topman stores; David Jones
Access and ability Cannot succeed if
to house they dont keep up
international with their strong
brands relationships with
Overseas suppliers and team
expansion members
Technology
advances
Technology
obsolescence

Internal Strengths Maxi-Maxi Strategy (SO) Maxi-Mini Strategy (ST)

Rolled out a Go overseas with Adding restaurants

number of popular international and cafes
brands brands Adding child-care
Strong sales Furthermore centre
increase Myers brands Adding more
High customer Provide better technology
visits service to existing platforms around
Four major customers to bring Myer
refurbishments, 2 in new customers Brand
new stores Expand Myer collaborations
Strong growth in overseas
Get more

12
 online sales technology in store
5 million Myer
One Members
Long-term
relationship with
their suppliers
Proud Australian
history
Know their
customer
Proud heritage of
community support
Donated over $2.6
million to charities

Internal Weaknesses Mini-Maxi Strategy (WO) Mini-Mini Strategy (WT)

2015: $600 million House more Reduction of costs

debt (Myer Annual womens Keep up to date
Report, 2016) international & with technology
Poor performance Australian brands Stronger brand
in womens wear Optimize stores to ambassadors
Gross profit margin improve sales per
declined to 40.4% meter
(Myer Annual Take advantage of
Report, 2016) online styles to
Stock to many of help with womens
the same wear
generation brands Diversifying
Not prestigious brands; they are
because of price missing
slashes generations of
womens wear
Emergence of
newer technology

13
 Threat of Competition Rivalry Supplier Power Buyer Threa

New Entry Power Substitu

Low Moderate High Low Low Moderate Low Mo

Reasons: Reasons: Reasons: Reasons: Reasons:

Investment is High level of High Competing New

higher competition; fixed prices with desi

New
David Jones, costs other retailers Not
Sales
Zara End of eno

season stock sale

2.3 Industry Analysis (Porter Five Forces)

14
2.4 Portfolio Analysis: GE Mckinsey Model

Sass & Bide (owned by Myer)

Market Attractiveness
Business Strength Weight (1-10) Rating (1-5) Value (W*R)
Market Size 3 4 1.2
Market Growth 3 2 .6
Competitive Intensity 4 2 .8
Total: 2.6

Company Position

Business Strength Weight (1-10) Rating (1-5) Value (W*R)

Relative Share 3 4 1.2
Customer Loyalty 3 3 .9
Brand Image 4 4 1.6
Total: 3.7

Invest Invest Hold

15
 Invest Hold Divest/Harvest

SASS & BIDE

Hold Divest/Harvest Divest/Harvest

3.0 Recommendations

3.1 TOWS

Diversifying Brands

Myer level different generations of womens wear on the same leveled floor and are

missing some generations. A suggestion could be to diversify brands. Myer could

house younger generations brands on another floor to an older generations brands. For

example, Myer have placed Sass & Bide and White Suede right next to Kate Millen.

Sass & Bide and White Suede are two completely different companies compared to

Kate Millen and dont attract the same consumer. It may not seem like a crucial

change, but as Myer is a large department store, customers can get confused with the

clutter they have. Having each level of Myer simply placed with the correct target

market will attract consumers. It will make the shopping experience a lot more

enjoyable and successful for the consumer. Entering this new market will gain more

customers and help Myer against their competition.

16
House more Womens Australian & International Brands

Myer need to house more Australian brand womens wear. Having more Australian

brands creates a sense that Myer are supporting locally and showing to be a

sustainable and ethical company. Housing more international brands also gives the

consumer a wider range of selection. David Jones and Myer are very similar and as

they are at head-to-head with each other, having different brands that are located in

Australia and Internationally, Myer can compete with David Jones knowing they will

attract more consumers and have a wider range of choice. Consumers in todays

society, do not just want different products, they expect different products. As

technology advances, consumers mind-sets advance too. People are finding new

ways to express themselves every-day. Not many people want to be wearing the same

products as their friends over and over again if ever. Clothing is a way to express

yourself so consumers need to seek different brands.

Adding Child-care Centre

A lot of the demographic for Myer is families. Adding a child-care centre where

mothers and fathers can leave their kids whilst they shop could be a successful way to

attract customers. There would be staff that is trained with a child-registration there

and customers would only be able to leave their children there for a certain amount of

hours. Companies such as Ikea and Bunnings have this system and parents are known

to love this.

Expanding Overseas

Large department stores in Australia are slowly decreasing and more consumers dont

want to shop in department stores. Myer could venture overseas and open up a new

store in a market where department stores are still a popular thing. For example, in

17
America, department stores are huge. Myer could find that they generate a lot of sales

through this new expansion and also reach a whole new segment of consumers.

3.2 - Blue Ocean Strategies

Complete Sustainable Department Store

Myer could become a complete sustainable department store. Myer would be stocking

only ethical and sustainable brands. Although this would be difficult having to slash

brands that receive a low grade for ethical and sustainability, Myer would be a major

leader in the industry and this is what companies are now aiming for.

Support Local High-end Brands

Myer could also start to support more local high-end brands of Australia, which

means they are supporting brands, and companies that are supplied and manufactured

in Australia, which also would come under sustainability. By doing this, they are

showing consumers they care about the country they are living in and by supporting

them, consumers will be attracted to this.

Release Annual Sustainability Report

Myer release an annual report that touches upon Sustainability, but they should

release annual sustainability report so that consumers can see they have complete

transparency and traceability.

Carbon Neutral Warehouse

18
Myer could use warehouses where they have there products manufactured, completely

carbon neutral. This reduces their carbon footprint and also reflects upon

Sustainability.

Multi-way Shipment

Multi-way shipment could be a potential opportunity for Myer to play a major role in

the industry. Instead of going through different sources of suppliers, the merchandise

could be shipped all together instead of separately to reduce their carbon footprint.

This could also reduce release of the merchandise time, as it is all coming together.

Green Energy Powered Warehouse

Green Energy could power Myers department stores and Green Energy could also

power their warehouses. This again reduces the carbon footprint and represents

Sustainability.

3.3 Ansoff

Market Penetration: Continuing to push their merchandise in their current market

segments with the use of aggressive marketing. Marketing should be Myers key tool.

This can also be achieved by selling more services and products to established

customers or by finding new customers within the existing market. For the womens

department, using iconic Australian models to advertisement and promote the

merchandise. Myer only use Jen Hawkins, whether they could branch out and

collaborate with a modeling agency such as Chadwicks to reach a wider range of

19
consumers.

Market Development: Gaining different generation brands into Myer and leveling

them out on different levels. This way, the existing product still remains, but a new

market has been opened for customers and future customers. Venturing overseas into a

new market where the market isnt too different. Having more high-end designers in

Myer helps them get their name of being prestigious back. Brands such as Ellery,

Dion Lee and Kit X.

Product Development: Rolling out more International and Australian brands for the

existing market. Differentiation will also help within a competitive level against

David Jones as Myer should stay clear of having similar product to them. Creating

more services that Myer can provide such as the Childcare Centre. Having a Childcare

centre at Myer could go a long way as the demographic is a lot of parents shopping.

Diversification: Myer can become a related diversification and join with their

competitor David Jones. There is potential synergy and together they could generate

more sales and also save a substantially large amount of revenue. It could potentially

be one of the best companies if they were brought together.

20
21