A column on Inside Retail on August 20 referred to a report by Frost & Sullivan on the growth in internet sales. Unlike some pundits who make sweeping statements including spokespeople for certain retail associations, Frost & Sullivan is a market research company with more than 50 years of experience with 40 offices worldwide, and its statements are based on solid research. The Inside Retail story noted that online retail sales are expected to reach more than $18 billion in 2013 and sale
es are forecasted to grow 39 per cent to $25 billion by 2015, including purchases by Australian consumers on local and overseas websites. These are significant numbers by any standard. Below is an extract from Frost & Sullivan’s recent findings.
“The online shopping market in Australia continues to grow strongly and in 2013 is expected to account for seven per cent of total retail sales. Total online spending is forecast to amount to $18.3 billion in 2013, with the average annual spend online per online shopper in Australia at $1750. Almost 90 per cent of online shoppers expect to increase or at least maintain their online spending over the next 12 months.”
The booming industry that has sprung up around multi-channel and omni-channel retailing and which is costing astute retailers millions of dollars seems to bear this out.
Nevertheless a CEO from a leading Australian retailer called me a few weeks ago. This retailer has hundreds of stores with turnover in the billions. I commented on the impact of internet sales on bricks and mortar retail. His response was quite extraordinary.
“That is bull****” he exclaimed! Clearly there are still some CEOs out there in denial, and this does not reflect well on the calibre of retail leadership in this country.
Fortunately they are in the minority. It was more than 10 years ago that I spoke to another CEO who had the foresight to suggest that internet sales were going to hit 10 per cent at some future stage, and of course, we are not far off that with certain categories far exceeding that number.
The attitude of the above CEO in denial is not unique.
There is another ex-CEO who also turned his back on the internet claiming that he had other priorities. Hence one reason I guess for him being an “ex-CEO”.
And there are others who have been dragged reluctantly kicking and screaming into this century.
They are now playing catch up, which is never easy. Success is one thing, but it is unsustainable without vision. Regrettably business is somewhat like politics – you focus on the next result and let the next incumbent worry about tomorrow.
According to Yahoo Finance, CEOs last about 4.6 years – longer in Fortune 500 companies.
The Harvard Business Review has calculated an optimum tenure for CEOs as 4.8 years.
Our CEO in denial is on the wrong side of 4.8 years in the job. Time will tell.
Stuart Bennie is a retail consultant at Impact Retailing www.impactretailing.com.au and can be contacted at stuart@impactretailing.com.au or 0414 631 702.
