Post on 04-Sep-2014
MGT303 - Business Information Analysis
Research Investigation and Proposal
Rachel Lai - 00036197TVicki Hetherington
29.01.12Table of Contents
PHASE 1: THE BUSINESS PROBLEM & RESEARCH OBJECTIVES
BACKGROUND INFORMATION…………………………….…………………………………………………………….…3
BUSINESS & RESEARCH PROBLEM……………………………………………………………………………….……….4
LIST OF INFORMATION…………………………………………………………………………………………………………5
RESEARCH OBJECTIVES…………………………………………………………………………………………………………6
PHASE 2: SUMMARY OF FINDINGS
STATISTICS ON RETAIL SALES....................................................................................................7
GROWTH IN ONLINE RETAILING................................................................................................8
REASONS FOR ONLINE RETAILING.............................................................................................9
KEY TRENDS.............................................................................................................................11
BENEFITS OF ONLINE RETAILING.............................................................................................12
CASE STUDIES…………………………………………………………………………………………………………….……….12
CONCLUSION……………………………………………………………………………………………………………….……..13
PHASE 3: PRIMARY RESEARCH PROPOSAL
RESEARCH OBJECTIVES……………….…………………………………………………………………………………..….13
APPROACH TO THE PROBLEM…………………………………………………………………………………………..14
RESEARCH METHODOLOGY.....................................................................................................14
POPULATION & SAMPLE..........................................................................................................14
APPENDIX: SAMPLE SURVEY...................................................................................................15
REFERENCES…………………………………………………………………………………………………………………….…16
Phase 1: The Business Problem and Research Objectives
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Background Information:
Myer is Australia’s largest department store group and has been synonymous with style and fashion
for over 100 years. With a valuable footprint of 67 stores in prime retail locations across Australia,
generating total sales of over $3.2 billion in FY2010, Myer is a leader in Australian retailing. Myer has
a strong connection with its customers, with one of the most reputable retail brands in Australia. It is
known for its welcoming, familiar, trusted, stylish and fun shopping environment as well as its strong
culture of philanthropy and local community engagement.
Myer caters for a large number of Australian households, offering more than 600,000 product lines,
comprising 2,400 brands sourced from over 800 suppliers globally. Myer’s offering comprises eleven
core product categories including womenswear; menswear; youth fashion; childrenswear; intimate
apparel; beauty, fragrance and cosmetics; home wares; electrical goods; toys; fashion accessories;
and general merchandise.
The first Myer store in Bendigo, Victoria 1900
Channels of Operations
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The Myer store network includes a footprint of 67 stores in prime retail locations across Australia.
Myer has 28 of the top 30 shopping centers across Australia including the world-class, international
award winning flagship Melbourne store.
Size
Myer currently comprises 13,000 team members, 56, 000 shareholders and 800 global suppliers.
Total assets are $1,977,962.
Financial Position
In financial year 2011, total sales were $3.159 billion. Myer reported a net profit after tax of $162.7
million.
Business Problem
Retail store sales are dropping. Myer is set to close stores in Victoria and New South Wales and
shrink surviving stores. Myer now has the business decision of whether to expand online and if so,
how to successfully enhance its online presence. The online store must be positioned correctly in
order to complement its existing retail stores in a way that is appropriate for its environment.
Research Problem
To investigate and profile the online retailing environment as it relates to large, well established
retail stores.
List of Information
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Case studies of other well established retail companies opening online stores
Web designs and layouts of existing online stores
Online consumer trends i.e. what consumers are spending their money on, where and which
sites are most visited
Statistics on online shopping i.e. growth trends
Statistics on retail sales drops and outcomes for traditional bricks-and-mortar shops
Reasons for consumers shopping online
Opportunities in the online shopping market
Top online stores in Australia and reasons for their success
Issues facing Australian retail sector at present and in the future
E-commerce trends – advancement in technology and the internet and its effects on online
shopping
Background information and statistics on retail giant MYER
Consumer attitudes towards MYER’s current online store
Explanation
This information will assist in resolving the business problem as it will provide an insight into online
shopping trends as well as highlighting the reasons as to why consumers now prefer to shop online
and the advantages of doing so. These trends will determine whether Myer should expand online
and the information sourced from other successful online shopping sites will hopefully assist in
enhancing Myer’s online profile.
Research Objectives
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To understand the online environment as it relates to consumer behaviour
To gain an insight into e-commerce trends
To appreciate the changing pace of technology and its effects on businesses
To predict consumer attitudes in order to come up with innovative ways of maintaining profits in
retail during financial downturns
To investigate Australia’s most popular online retailers and the reasons for their success
To research Myer’s current financial position and the potential need and means to improve
online sales
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Phase 2: Summary of Findings
Online shopping is a form of electronic commerce whereby consumers directly buy goods or services
from a seller over the Internet without an intermediary service. The growth in popularity of online
shopping has had considerable media coverage recently and is expected to grow by 5.1 per cent per
annum over the next five years in Australia (IBIS World). The strong Australian dollar, low costs,
technological advancements, and the willingness of overseas businesses to reduce profit margins
have contributed to the increase in online shopping at the expense of bricks-and-mortar shopping
centres (Woodings, T., Capital, A. & Holtzer, M. 2011). These factors create a major competitive risk
for Australian retailers, significantly impacting Australia’s $300 million retail sector.
Statistics on Retail Sales
-0.8
-0.6
-0.4
-0.2
0
0.2
0.4
0.6
0.8
Retail Sales
Food retailing Household goods retail-ing Cafes, restaurants and takeaway food services Other retailing Clothing, footwear and personal accessory retail-ing Department stores
2011
%
The following industries rose in trend terms in October 2011: Food retailing (0.4%), Household goods
retailing (0.6%), Cafes, restaurants and takeaway food services (0.7%) and other retailing (0.4%).
Clothing, footwear and personal accessory retailing (-0.7%) and Department stores (-0.5%) fell in
trend terms in October 2011 (Australian Bureau of Statistics, 2011). The drop in the latter two is a
possible reflection of poor consumer confidence and the subsequent trend toward online shopping.
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Growth in Online Retailing
(The Nielsen Company, 2011)
Statistics
The surge in online spending will increase by 25% to almost $6 billion in 2011 as mentioned in a
report by Price Waterhouse Coopers (Greenblat, E. & Yeates, C. 2011). It also states that Australians
will each spend more than an estimated $600 online in 2011 compared with $536 in 2010. This
shows significant growth in the sector with online retail sales said to rise by 12.6% a year between
now and 2015 thanks to growing popularity of mobile web devices such as smart phones. GetPrice
report showed 47% of users are now searching for deals on their mobiles and that 30% of those
smart phone users are actually using their phones to shop (Stafford, P. 2011).
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Online Consumer Trends
(The Nielsen Company, 2010)
Reasons for Online Retailing
The rise of e-tailing can be attributed to lower prices, convenience and access to a wider range of
products (Price Waterhouse Coopers, 2011). As consumers are hit by rising interest rates and a
steeper cost of living, they are forced to save rather than spend and so shop online for cheap
bargains. This robs local retail stores of revenue and forces many to engage in massive discounting.
Furthermore, research from PayPal last year shows 40% of all online spending went overseas where
prices can be as much as 50% lower than in Australia (Stafford, P. 2011). This has impacted
negatively on local retail stores with many retailers citing the internet for their dwindling sales. Book
chains Borders and Angus and Robertson, which collapsed early 2011, said online purchases has hurt
its business. The expansion of Amazon, the world’s largest online retailer, significantly impacted
sales of bricks-and-mortar book stores. Retail giant Myer is also set to close stores in VIC and NSW
and shrink surviving stores as it tries to generate as much as 10% of its sales revenue online (AAP,
2011).
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MYER Net Profit after Tax ($m)
(Myer Holdings Ltd, Annual Report 2011)
Total sales for the full year ended 30 July 2011, were $3.158 billion, down 3.8 percent on last year,
reflecting an unprecedented trading environment and weak consumer sentiment. Myer reported a
net profit after tax of $162.7 million, down 3.6 percent on last year.
Continued…
It is evident that having an online presence is essential to opening up new channels and
opportunities. It acts as a sales window to the physical store which enhances the company’s overall
presence. Many of the large, well established retail stores remained either inactive or ineffective to
this trend, stating complexity and high costs as issues. However, these retailers are now starting to
realise the benefits and embrace an online presence with the launch of web stores for giants David
Jones, Myer and Westfield. Myer started selling a limited range of products online in 2008 and have
now launched a full scale ecommerce operation, showing that online retailing is now being taken
seriously (Hitchen, C. 2007).
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Key Trends
The trend in shopping is now heading toward a multi-channel experience and the mobile phone is
now one of the most important of those channels. PayPal said recently that mobile phone payments
grew from $2.7 million in 2009 to a massive $35 million in 2010 (Stafford, P. 2011). These payments
enable e-commerce merchants to expand their offerings and create new experiences on the phone.
0
5
10
15
20
25
30
35
40
Paypal Mobile Phone Payments
20102011
Year
$m
Australian retailers are rapidly rolling out their online strategies, which will implement a multi-
channel approach to sales and delivery of product. A survey by the Aberdeen Group revealed that
33.3% of worldwide retailers and consumer goods manufacturers engage three channels in their
marketing: store, catalogue and online. “85% of businesses that adopt an ecommerce strategy do so
to take up new market trends” so creating a website to represent and sell ones products is a starting
point (Hitchen, C. 2007). To be successful, Myer will need to define the channels that will work for it
and implement those channels.
The past few years have also delivered another key trend for online retailers – socialisation. This is
evident in the phenomenon of group-buying which is apparent in the Australian market through
group discount sites such as Cudo, Spreets and JumpOnIt. Allowing users to make comments and
reviews, connecting shopping carts to social networks and ensuring customers are able to talk to
each other are the elements of online retail that are becoming more important (Stafford, P. 2011).
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Benefits of Online Retailing
According to Urbis, the net effect of online retailing on shopping centres will be lower future rates of
growth. For this reason, there is a need to expand and cash in on the opportunities of the online
environment. An online store is important as it allows people to research, compare pricing and
browse products they want to buy (Stafford, P. 2011). It also allows them to engage with the brand
other than directly walking into retail shopping centres. While Australia’s largest retailers might be
focused on increasing footfall into their stores, they would be well-advised to create a consistent
multi-channel environment that fosters customer loyalty, drives incremental sales, increases brand
recall and loyalty, and allows them to get to know their customers better (Hitchen, C. 2007). Leading
Australian retailers should also consider ways to differentiate themselves by providing superior add-
on services.
Case Studies
JB Hi-Fi and Dick Smith are two of Australia’s top ten retailers in 2011 according to a survey
conducted by SmartCompany (Stafford, P. 2011). JB Hi-Fi offers free shipping on certain days and
items and has been one of the few success stories in retail during 2010 and that success extends to
online. Dick Smith has been in the top ten for the past three years and its site is bright and bold with
solid branding. This makes it easy to manoeuvre around the site and customers are provided with a
multitude of information to assist in product searches. Customers can also see if a product is in
stock at a local store. These are all value add-ons that enhance the appeal of online shopping. Myer
is yet to break into the top ten even though it is one of Australia’s leading retailers. However, it is yet
to reproduce this same success in online sales. Due to its large variety of stock it poses a greater
challenge to compete with other online stores with more specific product categories. For this
reason, Myer needs to come up with ways to compete with other more popular e-tailers.
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Conclusion
This information highlights the increasing trend toward online retailing as a result of advancements
in technology and the internet and the resultant demise in sales of traditional bricks-and-mortar
shopping centres. It expresses the increased use of smart phones as a catalyst for this trend and how
shopping is now headed toward a more multi-channel experience focusing on socialisation and the
group-buying model. These trends emphasise the direction online retailing is going and pinpoints the
need for traditional retail stores to expand online and in what capacity to ensure success in the
competitive retail environment. The business problem of whether Myer should expand online is
evident through the literature review but in what capacity that is appropriate for its surroundings is
still unknown.
Consumer attitudes toward the existing Myer website need to be analysed in order to reveal what
improvements can be made to enhance the online shopping experience with a focus on user-centred
design. The outcome of this information will also enable Myer to discover consumer preferences and
buying habits. Statistics on the number of page visits of more successful retail websites would
provide a benchmark comparison for these improvements. Facts on the demographic that Myer is
selling to will further determine how best to attract them to the website and have them buy. As
online sales become more important, information on sales trends will also be critical to compete
with other retailers.
Phase 3: Primary Research Proposal
Research Objectives
To reveal consumer attitudes toward existing Myer website
To collect statistics on other retail website hits to reveal most popular shopping websites
To understand the need for user-centred design
To analyse consumer behaviour regarding sales items and frequencies of sales
To examine the demographic of Myer’s target audience
To discover the proximity of consumers to retail stores such as Myer and whether location
influences online sales
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Approach to the Problem
The overall methodology to be used should be Descriptive in nature. This type of research is used
extensively when the research purpose is to explain, monitor and test hypotheses, and can also be
used to a lesser extent to help make predictions and for discovery. It is essentially used to describe
situations.
Descriptive research is an appropriate channel for this research proposal as it can be an important
tool in understanding consumer behaviour. It involves the use of survey data such as questionnaires
which contain specifically formulated questions that are objective or subjective in nature and gather
facts such as demographics and opinions from respondents as well as satisfaction, involvement and
perceptions. This is especially beneficial in sourcing information relating to Myer’s customer base
and personal attitudes so to be able to identify key aspects that will enhance Myer’s online store and
boost overall sales.
Research Methodology
The specific research techniques to be used will be interviews and surveys incorporating a series of
closed and open ended questions such as dichotomous, multiple choice and scaled response
formats.
Population & Sample
A population refers to the entire group of people, events or things of interest that the researcher
wishes to investigate (Sukaran, 2009: p. 262). The population in this study is all existing online
shoppers resident in Australia. Sampling is the process of selecting a sufficient number of elements
from the population for a sample. The sample in this study is consumers aware of Myer and size 30 <
n < 500.
The sample will be obtained via shopping centres, websites, social media networks and
telemarketing and will be done through the provision of incentives. For example, a pop-up ad survey
may appear after an online purchase has been made with an offer of a shopping voucher or discount
as an incentive to complete the survey.
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APPENDIX: MYER SAMPLE SURVEY
1. Where do you live? ___________________________________________________________
2. Where is your closest Myer store? _______________________________________________
3. How often do you shop at Myer? ________________________________________________
4. Are you mostly interested in Sales items or specific items? SALES / SPECIFIC
5. Have you used Myer’s online store before? YES / NO
6. Would you be interested in the sale items on offer there? YES / NO
7. What advantages would you see in using Myer’s online store? ________________________
___________________________________________________________________________
8. Do you enjoy shopping online? YES / NO
9. What online shops do you normally frequent? _____________________________________
___________________________________________________________________________
10. How does Myer online compare to this? __________________________________________
___________________________________________________________________________
11. What is your overall rating of the Myer website with 5 being the highest? 1 2 3 4 5
12. Would you use a Myer smartphone app? YES / NO
13. What improvements would you make to the Myer online store? _______________________
___________________________________________________________________________
14. Were you able to find the products that you wanted in the search engine? YES / NO
15. Would you be interested in a weekly email newsletter showing sale items and promotional incentives? YES / NO
16. Have you shopped online at any of the following e-tailers?
a. Catch of the Day
b. Deals Direct
c. Big W
d. Dick Smith
e. JB Hi-Fi
If yes, did you rate this experience greater than that on the Myer website? Why? YES / NO
______________________________________________________________________________
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References:
AAP. 2011. ‘Myer cuts space, boost online sales’, http://www.cio.com.au/article/406970/myer_cuts_space_boosts_online_sales (accessed 23 January 2012)
Australian Bureau of Statistics. 2011. Australian Social Trends – Online @ Home, June, Available: http://www.ausstats.abs.gov.au/ausstats/subscriber.nsf/LookupAttach/4102.0Publication29.06.116/$File/41020_Online_Jun2011.pdf (accessed 23 January 2012)
Australian Bureau of Statistics (2011) Retail Trade Australia, ABS Publications, www.abs.gov.au (accessed 23 January 2012)
Baltzan, P., Phillips, A., Lynch, K. & Blakey, P. 2010. Business driven Information Systems (Australian and New Zealand Edition) McGraw Hill, North Ryde, NSW
Cummins, C. 2011. ‘Myer to close or shrink stores as retail malaise bites’, http://www.theage.com.au/business/myer-to-close-or-shrink-stores-as-retail-malaise-bites-20111218-1p0q4.html (accessed 23 January 2012)
Godfrey, A. 2011. ‘Overseas internet spending is killing off Australian retail, but don’t blame the GST’, http://www.news.com.au/money/money-matters/overseas-internet-spending-is-killing-off-australian-retail/story-e6frfmd9-1226101760658 (accessed 23 January 2012)
Greenblat, E. Yeates, C. 2011. ‘As stores close doors, consumers open wallets on Internet’, http://www.smh.com.au/business/as-stores-close-doors-consumers-open-wallets-on-internet-20110725-1hx57.html (accessed 23 January 2012)
Hitchen, C. 2007. ‘Five things holding back online retail in Australia’, http://www.getprice.com.au/5-things-holding-back-online-retail-in-australia.htm (accessed 23 January 2012)
Myer Holdings Limited. 2011. Myer Annual Report, Available: http://media.corporate-ir.net/media_files/IROL/23/231681/Myer_Holdings_Limited_2011_Annual_Report_to_Shareholders.pdf (accessed 23 January 2012)
Myer Pty Ltd. 2011. Available: http://www.myer.com.au (accessed 23 January 2012)
Rumbold, S. 2011. ‘Unravelling Online Retail – Urbis Reveals All’, http://www.urbis.com.au/think-tank/white-papers/unravelling-online-retail-%E2%80%93-urbis-reveals-all (accessed 23 January 2012)
Stafford, P. 2011. ‘Australia’s Top 10 Online Retailers 2011’, http://www.smartcompany.com.au/internet/20110217-australia-s-top-10-online-retailers-2011.html (accessed 23 January 2012)
The Nielsen Company. 2008. Trends in Online Shopping – A Global Nielsen Consumer Report, February, Available: http://th.nielsen.com/site/documents/GlobalOnlineShoppingReportFeb08.pdf (accessed 23 January 2012)
The Nielsen Company. 2010. Global Trends in Online Shopping – A Nielsen Global Consumer Report, June, Available: http://hk.nielsen.com/documents/Q12010OnlineShoppingTrendsReport.pdf (accessed 23 January 2012)
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The Nielsen Company. 2011. Nielsen Online Shopping Behaviour, March, Available: http://tw.en.nielsen.com/site/documents/2011ShopperTrendOnlineshopping-en.pdf (accessed 23 January 2012)
Woodings, T., Capital, A. & Holtzer, M. 2011. Ten Issues facing Australian Retail in 2011, Available: http://www.taylorwoodings.com.au/Assets/files/F2-Turnabout-Retail-V1-(2).pdf (accessed 23 January 2012)
Zikmund, W.G, Ward, S., Lowe, B. & Winzar, H. 2007. Marketing Research (Asia Pacific Edition) Cengage Learning Australia Pty Limited
*Word Count: 2481 (excluding title page, contents, appendix and references)
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