mselves as department stores but rather as consumer stores. In other words, rather than selling merchandise they want to sell through a departmental construct, in large measure because that’s what they have always done, they should be selling what consumers want. Would Sydney Myer ever have started his stores if he had been hawking products around the Bendigo goldfields in Victoria that were of no use or interest to miners? Most retailers look with envy at JB Hi-fi as a thriving and – for now at least – recession-proof retail business that sells the must-have merchandise that consumers want today.  Myer or David Jones could have dominated the very categories that have made JB Hi-Fi one of the best and most successful retail chains in Australia. Yet the categories in which they did or do overlap pale by comparison in sales and earnings performance because they are tucked away in the upper floors or the rear of stores. Location, location Department stores choose to allocate an excessive amount of their prime space to cosmetics and, by and large, the various departments obstinately retain their place in the hierarchy of store formats. Cosmetics may well create a glamourous ambience and even generate reasonable sales and profit return, so they should be given their prime location, but they represent a missed opportunity for retailers to showcase new products and create excitement in their prime front-of-store space. Is the customer really first? One of Myer’s key turnaround strategies for years has been a customer-first focus. You can’t argue with that but what does it mean? For the most part, for Myer, it means service standards on the shopfloor and the add-on benefits like a Myer account, MYERone, Christmas Club, Afterpay and click-and-collect. However, a customer-first focus is about selling what the customer wants and making it easy for them to buy it. If they are to survive, department stores must become more agile and coherent in their store layouts, their merchandise offer and their marketing. Most importantly, they need to become more agile in their thinking. Myer and David Jones have to make themselves relevant to today’s customer and the key asset they have which could secure their survival is the fact that they remain trusted brands, notwithstanding the confusion they have created with merchandise strategies. David Jones is pursuing a food strategy to increase foot traffic, which is a better idea than the Myer decision, thankfully abandoned, to create clearance centres in some full line department stores. While food works culturally in Asian department stores, David Jones will need more than food to rebuild sustainable sales and earnings growth as well as to lift the productivity of the retail floorspace it retains after its current effort to right size the business. Myer has to find a compelling proposition that attracts and retains new customers.  It simply cannot keep doing the same things in the same way without getting the same results – declining market share, falling sales and earnings and a diminishing enterprise value. Online sales are part of the equation for Myer and David Jones going forward, but they are not the saving grace for the two retailers. David Jones has a new CEO in Scott Fyfe from Country Road, as well as new leadership in its parent company, Woolworths Holdings in South Africa. Myer is facing a shake-up after angry investor, Solly Lew, laid siege to the board, which has for too long lacked retail expertise and overseen the depletion of experience and some exasperated talent in management ranks. Both retailers now need to rethink and redefine their businesses and to move past the hardly revolutionary turnaround promises they have been reciting for years.