2017 set to be ‘fascinating’ year for Australian retail: Deloitte

Wesfarmers has leapfrogged Woolworths in Deloitte’s ranking of the 250 largest retailers globally and the influx of international retailers is set to continue, according to the Global Powers of Retailing 2017 report.

The report from Deloitte, which is now in its 20th year, identifies the 250 largest retailers globally by revenue, and examines current global trends and economic prospects in retail.

It reveals that the total number of the global top 250 operating in Australia remains at 39, the same as last year. Another four (The TJX Companies Inc., John Lewis, Debenhams and Decathlon) have entered the Australian market, while four still operating in Australia are no longer in the top 250.

David White, national leader of Deloitte’s Retail, Wholesale & Distribution Group, says the influx of international retailers will continue in 2017 and beyond, driven by Australia’s strong economic conditions relative to other countries, high consumer demand for international brands, and proximity to Asia.

“One of the key differentiators international retailers have brought to Australia is in their store design and customer experience model, leveraging their experience from larger markets,” he said. “With just 16 per cent of the top 250 retailers globally operating in Australia, and US-based retailers making up nearly 50 per cent of that total, we can expect more new global retailers to bring their operations to our shores in 2017. New entrants, coupled with the threat of Amazon, should make for another fascinating year for Australian retail.

“However, we are also seeing Australian retailers slowly fighting back, with investments in store design, concept and flagship stores on the rise. So these new entrants will find Australian retailers better prepared and skilled to take on this new challenge compared with five years ago.”

Wesfarmers and Woolworths continue to be the only two Australian retailers represented in the top 250, at 21st and 24th respectively (compared with 23rd and 21st last year). Wesfarmers has overtaken Woolworths in the rankings for the first time, largely driven by the continued growth in its Bunnings brand, as Woolworths exits its home-improvements business.

Global Powers of Retailing 2017 also examines the art and science of customer engagement to help retailers design fresh experiences, enabled by the right technology, and to strengthen customer loyalty.

The five trends identified in the report are:

• Less is more – customers are defining themselves less by how many things they own and more by how ‘curated’ their lives are in terms of possessions and experiences
• ‘Following’ economy – customers are seeking experiences and products that reflect the personal brand they promote on social media
• ‘Retailisation’ of the world – the maker movement, the sharing economy, and other factors have made it increasingly difficult to define what a retailer is and does. Non-traditional retailers are developing new business models to serve customers’ needs, such as subscription services and flash-sales
• On-demand shopping and fulfilment – relevancy will be determined by the ability of retailers to meet the on-demand mind set of the modern consumer
• Exponential living – exponential technologies, such as artificial intelligence, robotics and virtual reality, are changing how we live and shop.

Top 10 global retailers by revenue

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