MYER is ramping up its online presence, spending $9 million on a new website that is expected to generate up to $40m in annual sales revenue.
Chief executive Bernie Brookes said the initial version of the new site would be launched in November, with additional functions to be added in February including one-off “superdeals” and private shopping club services.
“It will be a site that we’ll be very proud of, coming from a site that I would describe at the moment as average,” he said.
“We currently have a million viewers a month on our existing website, but we think we can improve on that significantly.”
Sales were expected to grow quickly, from about $5m currently to about $30m-$40m, the same as an averaged-sized Myer store but with lower operating costs.
“There’s no rent, and rent for a department store is about 8 per cent . . . so that’s a big saving, and wages can run up to 20 per cent at a department store, but the wages for just picking and delivering are significantly less,” he said.
Myer has had a transactional website for the past three years but sells only a limited range of products, with about 8000 individual stock-keeping units (SKUs) currently available.
“You’ll see a bigger range go online each month over the next few months, we’ll probably get it to 15,000 SKUs, but the opportunity to keep growing it if the customers buy is up to 250,000 SKUs,” he said. “We’ll build it and they will come.”
Mr Brookes said Myer’s network of 67 stores gave it an advantage over internet-only retailers, while its Myer One loyalty card program gave it a ready-made customer base of 1.8 million.
“The plan will be to dominate the online space using the bricks-and-mortar leverage that we already have,” he said.
Mr Brookes said foreign retailers such as Macey’s in the US and Debanhams of Britain had taken years to build a strong online presence but were now making billions of dollars in sales.
“I can’t see Australia being too much different as we develop, and I’d like to think we will be at the front of that.”
Last week Myer revealed that Mr Brookes would oversee the implementation of its online strategy as part of a restructure of the executive team following the resignation of executive general manager merchandise Penny Winn.
The company said in a statement its general manager of e-commerce, Rob Gregory, would report directly to Mr Brookes “in response to the increasing demand by customers for an integrated offer across our stores, the internet and mobile devises”.
Australian retailers have partly blamed falls in sales on consumers taking advantage of a high dollar and shopping on overseas websites.
Myer is spending $9 million on a new website. www.twmg.com.au