Don't Let Your Transformation Reek of Desperation 🧀

Don’t be fooled—it’s not a digital transformation. It’s a desperation transformation. And you want to avoid it at all costs.

I’m lucky enough where I get lots of retail and ecom media releases sent to me every week. And I’ve noticed a trend, that’s not necessarily new, but becoming more obvious. Legacy brands with aging business models are shouting about their technology overhauls. Their customer-led data transformation. Their new lean and agile operations. Some are even brash enough to talk about their AI evolutions. “Hey look! We’re changing! Over HERE!”

But in many cases, it’s not a transformation. It’s a defensive cost cutting exercise coming too late.

Let’s take our mother’s favourite brand, Tupperware. They were recently saved by private equity. The classic kitchen brand recently got a private equity lifeline, which usually translates to: dig up the gold, bury the bodies, and sell it off to the highest bidder.

Their press release reads “After years of struggling with an over-leveraged balance sheet and outdated operating model, the transaction would mark a new day for the iconic brand.” It goes on to say, “The New Tupperware Company will be rebuilt with a start-up mentality using an agile methodology in dynamic phase.” Uh oh. I smell ex-big four consultants.

We’ve seen it locally too.

In the last few years, Myer has had a number of big transformation announcements. From technology, to customer experience to loyalty data. It’s all been transformed. Yet, it’s still Myer.

This week Myer announced their “transformational combination with Premier Investments apparel brands”. They bought Premier’s legacy brands of Just Jeans, Jacqui E, Portmans, Dotti and Jay Jays. It’s emotional because I have fond memories of buying my first (and only) pair of cargo pants from Jay Jays. Premier held onto their two highest revenue generating brands Peter Alexander (the only brand that grew last year) and Smiggle (the only one established in international markets beyond ANZ).

Look deeper into the ASX papers and you will see the primary benefit called out is “Myer and our Apparel Brands will be stronger together — delivering vertical integration, scale, additional margins and loyalty opportunities.” Uh oh. This feels like more… of the same… at a larger scale. Hardly transformational for a group of brands struggling for relevancy in the modern retail landscape.

You know what would be exciting? If Myer set their sights on acquiring a consortium of modern, customer-led brands on a growth tear who need big dollars to help them expand their physical footprint and cross-acquire customers. Aje, Bed Threads, SIR The Label, DISSH, July, The Memo, Go-To Skincare, P.E. Nation all come to mind off the top of my head. The Premier deal is worth almost $1b. Go-To Skincare was recently bought back for (a bargain) $22m. Imagine the growth you could get from that war chest.

So, yes, it’s a big change but it’s a desperation change. It’s not a growth focused change. True transformations happen well before things get desperate.

Cheers,
Bushy

ECOMMERCE NEWS

⏎ Return Before You Buy
Loop just launched an interesting feature called Loop Offset, letting customers pay a small fee upfront to unlock free returns. They say 80% of customers opt in, boosting average order value by 10% for early adopters. It’s a smart twist on returns, but it does beg the question whether customers are more predisposed to returning if they have paid for it.? Also interesting, THE ICONIC’s pop-up at Martin Place with HUBBED and Couriers Please lets shoppers pick up, try on, and return on the spot.

🔎 Shoosh Please, Our New AI Librarian Has Arrived
It finally landed this week - Google AI Overviews in search results is here in Australia. You have probably noticed it already. And it’s funny how quickly you become reliant on it - and how fewer click throughs you are undertaking. It will be interesting how this changes the role of search for your brand - potentially from a traffic controller to the world’s best personal librarian.

💸 Frugal but Ready to Mingle
Hopefully 2024 is peak “cost of living” but this evolving Pulse of the Nation report from M&C Saatchi continues to deliver. Now in its fourth iteration, this report showed that Australians are lonelier than ever and craving true connection. We’re spending less in social categories such as eating out, fashion, alcohol and live entertainment. 56% are cutting back on social activities to save money with 6 in 10 Aussies feeling more isolated as a result There’s never been a better time to play the connector and nurture a community around your brand. That finally explains the run club phenomena.

🥑 The Fresh Food Groupies
This article is a fascinating dive into the world of group buying for Chinese-Australians in WeChat groups. Asian grocers are servicing multiple group-buy groups to give customers lower prices and to help them manage inventory, get better wholesale prices and learn more about what customers what. Each group can have up to 500 customers in it. It’s incredibly organic but effective in facilitating a community shopping experience.

🚘 Dashboard Crashboards
Imagine driving along, looking fown to check your speedo and you get hit in the face with a Zinger Box ad. Well, it’s starting to happen. Advertisers in Spotify (and no doubt other platforms) are uploading their ads as “cover art” and when the ad plays, consumers get the cover art right in front of their face as they are driving. Did someone say KFC?

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Nathan Bush is an independent Australian ecommerce transformation consultant, with expertise in marketing, technology, and team leadership. If you're looking for fresh ideas, facing key decisions, or implementing significant investments, I'd love to work with you. Learn more and get in touch.