Executive summary

This business case discusses the design, development and implementation of Myers After
Hours service as well as the means required to ensure the success of this innovation.
Through primary and secondary research using methodology such as interviews,
observations and the use of published reports and articles, the need for longer physical store
opening hours was identified within the Australian retail industry with a technologically
advanced solution Myer could take advantage of.
Consumers across Australia continually face the constraint of limited shopping hours that
are unable to successfully intertwine with their daily schedules. Retail businesses within
Australia fail to provide solutions to this issue resulting in the continual loss of sales as well
as corrupting relationships with consumers. Through customer observation, it was
discovered that businessmen and women arrive at stores too early and too late to gain their
intended outcome of purchase thus losing sales for the brand. Another case identified was
the late night refusal from venues such as bars and clubs as a result of the wrong clothing.
In these situations, Myer would benefit financially as well as achieve a competitive
advantage over its competitors via providing a solution to this problem.
To maximize sales and provide an elongated shopping experience, the implementation of a
technological innovation similar to the machinery used in a vending machine has been
designed and developed. This machine will be located on the Bourke Street side of Myer
providing a limited range of popular lines as well as essential products already sold by the
brand. The machine will be running during a large portion of Myers closing hours relative to
high traffic hours with potential to obtain sales. In addition to the external machine, a closely
located storeroom will be constructed. The technological machine will be maintained by a
single employee transferring customer purchases to the machine. This innovation removes
all barriers between consumer spending and physical store opening hours to ensure
customers feel at ease when purchasing in addition to Myer gaining every potential sale
available.

In order to implement the after hours innovation, an initial amount of $75,000 will need to be
invested. This amount will contribute to the purchase and installation of the technology
including the touchscreen and POS system. These items are estimated to cost $25,000. The
initial investment amount will also be put towards the building of the store room and facilities,
which is estimated at $15,000. An important part of the success of the after hours concept is
the marketing and advertising of the service. The cost of this is estimated at $35,000 and will
also be covered by the part of the initial investment amount. After this initial investment,
Myer will need to produce enough sales to break even. It has been predicted that Myer will
be able to do this in 3 months post installation if they can make a minimum of 28 sales a
day. These figures are based on an average retail price of $49.99 per product.

By implementing this technological innovation, Myer have the opportunity to be seen as a

progressive and cutting edge retailer in the Australian retail industry. Their ability to adapt to
advancements in technology, and maintain their strength as an Australian heritage
company, Myer will gain a prominent position in the retail market.
The need
A need that has been identified within the textile, clothing and footwear (TCF) industry is
inability for customers to buy products from a bricks and mortar store on a 24-hour basis.
Currently customers have to either; physically shop in store whilst confining to retails limited
opening hours, or shop online where the customer has to wait for their products to arrive and
pay an additional shipping fee. It is about time that fashion expands its accessibility by
providing a service that gives consumers the ability to buy and immediately receive
purchases at any time that suits them. Research into the online retailing platforms suggested
that the busiest time of day is between 6.30pm to 10.30pm. Therefore, there is a need for a
more flexible buying experience for customers that would in turn encourage impulse buying
behaviour.
Certain customer situations have been established, where after hour bricks and mortar
stores would be beneficial. Strict and confusing dress codes at nightclubs and bars can often
leave people needing clothing at all hours of the night. This especially adheres to men where
closed toe shoes and dress shirts are often compulsory resulting in the denial of entry.
Furthermore, this service would also eliminate the stress that consumers and employees
experience when it comes to last-minute shoppers at closing time. Last minute shoppers
can often feel alienated and unwanted when leaving stores late, which can lead to a
potential drain on profitability. In relation to the working consumer, this service would cater to
the need for immediate office attire before opening time. Examples of this would be
purchasing work appropriate clothing when going straight from a night out to the office, or for
early morning mishaps such as coffee spills.
Giving customers the freedom to shop essentially in store 24/7 will stop Myer from losing
sales due to their stores being shut. It caters to late night street shoppers, which is a market
that currently has no retail competitors.

Myer After Hours

A solution to the issue of being unable to purchase products via bricks and mortar stores
afterhours is the implementation of a digital vending machine outside the store. This vending
machine will be an expansion of general vending machines seen throughout suburbs
providing quick and easy access to their products. Food and drinks are provided on a 24
hour basis removing the need for an open store which will be the case for Myer. The
machine would be placed on street sides of the store to be easily accessible for consumers
passing by. This enables physical stores to earn sales while closed, as well as gaining a
competitive advantage with this novelty concept. The sleek design of the vending machine
will evoke a stylish look in addition to portraying the company as being technologically
advanced in the retail environment. This machine will run throughout an extensive portion of
the physical stores closed hours thus maintaining sales growth overnight and providing an
option for consumers wishing to purchase after hours without online shopping. If successful,
a move towards a more technologically run machine could be an option extending the
running time to a possible 24 hour system.
A vending machine within the retail industry is a relatively new concept. We see the
continual installation of these machines throughout the country selling products such as
food, drinks and phone cases. With the rapid growth of vending machines within Australia, it
is evident that they result in a high success rate therefore introducing this technology into the
retail industry could prove to be extremely beneficial. More recently, Cotton On in Surfers
Paradise have developed and created a vending machine selling thongs in multiple sizes
and colours. This innovation has proved to be quite successful throughout the day however
hugely popular during the early hours of the morning with young girls purchasing these
thongs as a result of having sore feet from heels (Lexie Cartwright, 2015). As this is one of
the only current vending machines with ties to the retail industry in Australia, extending this
concept towards selling clothing will evoke a sense of exclusivity. Not only will this enable
Myer to grow sales via their physical store locations after hours, it will also provide the store
with an opportunity in gaining a competitive advantage over its competitors. By promoting
this technology as a new means for purchasing, consumers could potentially acquire a
sense of excitement and a need to use the machine establishing an engaging point of
differentiation.

Predicted front of store view after the installation of the innovation.

Predicted floor plan with remodel to include store room and facilities for the innovation to
operate out of.
 Customer Research
Using a retail vending machine running past closing hours allows consumers to shop for
products at almost any time throughout the day. This intertwines within the average business
man or womens lifestyle, who may start work early and finish late. Through the research
and study of workers around the inner city, it was discovered that a number of employees
arrived at stores before and after work only to be greeted with closed doors. This creates a
loss of sales for the day as well as potentially displeasing the consumer resulting in future
distrust of the brand. With approximately 870,000 people per day visiting Melbourne city in
2015, providing an elongated shopping opportunity is vital considering 392,000 of those
visiting are in fact workers. With an average of 391,000 people remaining in the city on any
given weekday after 6pm, providing this technology could potentially boost sales but also
remove the constraint of store closure times allowing consumers to freely purchase.
Continuing a study of the weekend Melbourne city population, it was identified that multiple
people, generally more males than females, were denied entry from venues due to strict
dress codes or the occasional food or wine on the patrons clothing. With an average of
286,000 people wandering the city on weekends past 6pm, the possibility of extra sales is
evident notably as a result of the occurrences stated. The probability of growing sales after
closing time through the implementation of a vending machine is definitive. As it is too
expensive to vastly extent Myers opening hours, this technology is a required solution with
the potential to reach immense success

Design and Development

To embark on the concept, an employee will initially run the machine feeding through
customer purchases. In future, if this concept proves to be successful, the possible
implementation of a 24 hour store is desirable without the need for an employee. The
employed staff will be paid relative to the times and tasks at hand. As they are working
outside trading hours, Fair Work Australia recommend wages between $26.11 to $36.00.
There will be a storeroom built relatively close holding the available stock. From the outside,
the machine will give the appearance of a sleek and sophisticated touch screen technology
complementing the modern aesthetic of the store.
The development of a Myer After Hours range will provide consumers with a diverse range
of pieces each week already being stocked in store. This range will be selected via internal
research of sales and current popular trends as well as maintaining an arrange of business
attire and key pieces This range will be available to view via online platforms such as their
website. The customer is able to view and purchase from the range by choosing the product,
style and size using the touch screen. Products will be restocked towards the end of Myers
opening hours to ensure there are no constraints on sales during the day. Customers are
able to purchase the items via card with no limitations for American Express and pay pass.

This technologically advanced machine will be located at the Bourke street Myer store as it
their major store with a high amount of foot traffic. The machine will be running relative to the
closing and opening hours of the store with evaluation of busy city times as well as being
relative to external business hours. Thursday and Friday this technology will be running 9pm
to 9am, Saturday 7pm to 10am, Sunday 7pm to 9am and Tuesday and Wednesday would
be open 7pm to midnight then reopened at 5am until 9am.
There will be costs involved in the initial installation of this technological machine including
the development of the touch screen. The construction of the stock room will also need to be
accounted for in terms of the physical renovation as well as the stock set up. Staff need to
be trained to ensure the smooth functionality of the machinery as well as the rapid repair of
small scale issues. As this is such a novelty technology Myer will be acquiring, mass
marketing that will be used to communicate the new development as well as create
extensive excitement.

Investment requirements
There are numerous costs associated with the implementation and operation of this
innovation. These are both initial costs that will occur during startup and the ongoing costs
associated with maintaining the project.
Initial costs include the purchasing of the technology required to create this project
consisting of the touch screen display and POS facilities that allow customers to make their
purchase. As well as the initial purchase of technology, a storeroom consisting of the items
needs to be constructed ensuring staff have an ease of access to the entire range.
If the innovation is successful and continues to operate, there will be ongoing costs
associated with maintaining the project. The use of staff to operate the after hours project
will increase wages for Myer incurring penalty rates as the hours of operation are late night
and early morning shifts.
Another ongoing cost that Myer will face is the maintenance and repairs on the technology
and facilities of the innovation. As it is quite a new and unique innovation, maintaining and
repairing this machine will not be a simple task therefore the costs involved will cover a high
quality and specialised standard of work.
Advertising and marketing of the innovation is a major key to its continual success. This will
need to be well executed in the beginning of the implementation process, as well as ongoing
throughout its operation. As this is a substantially new innovation being introduced into the
Australian Retail industry, extensive and profound marketing will be carried out to ensure
this concept is widely communicated to a vast audience. Major online campaigns including
social media and emails, spreads in prominent magazines and public transport banners will
be conducted as well as a newsworthy grand opening complete with ribbon cutting and
limited time promotions.
Depending on the employee, wages could be anywhere from $26.11 to $36.01 per hour
(Fair Work, 2016).
Below is a table with the estimated initial costs of startup:

Item Amount
Technology $25,000.00
Touch screen display and POS
system, installation of equipment
Building/Re-modelling $15,000.00
Store room and facilities
Marketing and advertising $35,000.00

Total $75,000.00
Below is a table with the estimated operating costs (based on one month):

Item Amount
Wages $10,730.00
Based on 1 employee per shift,
for one months work, maximum
hourly rate of $36.01
Utilities $800.00
Internet, electricity
Maintenance/Repairs $500.00
Marketing and advertising $2,000.00

Total $14,030.00

By implementing this innovation, Myer is able to have an open store without the costs
associated in keeping the entire store open.
Aside from financial investment, Myer will also need to invest time and employees into the
planning and implementation of the innovation. This is a critical part in ensuring its success.
Benefits
The major benefit resulting from the implementation of this innovation is the increase in
sales and profit for Myer. As the business has been suffering from a decrease in profits over
the past 5 years (Myer, 2015), establishing this new and exciting technology provides Myer
with a competitive advantage in the retail industry. Myer will be able to maintain sales growth
via their bricks and mortar stores during closing hours without the heavy costs associated to
running a store.
In order for Myer to break even on the initial investment cost of $75,000, they would need to
make an average sale of 28 units per day within in the first 3 months. These figures are
based on an average retail price of $49.99 per item, with a cost of $18.00 per unit, giving a
profit margin of $31.99. This is shown in the table below:
 Investment Costs
Technology $25,000.00
Building $15,000.00
Marketing/Advertising $35,000.00

Total $75,000.00

Average RRP $49.99

Average COGS $18.00
Profit Margin $31.99

Break-even Sales 2344

Daily Unit Sales 28

Total Daily Sales $1,399.72

The following table highlights the sales required based on a monthly basis, for Myer to break
even on operating costs. These figures are based on an average profit margin of $31.99 per
unit. Myer need to make an average of 16 sales per day.

Operating Costs
Wages $10,730.00
Utilities $800.00
Maintenance $500.00
Marketing/Advertising $2,000.00

Total $14,030.00

Average RRP $49.99

Average COGS $18.00
Profit Margin $31.99

Break-even Sales 439

Daily Unit Sales 16

Total Daily Sales $799.84

Aside from the financial benefit, Myer also have the possibility to widen their customer
market. As the technological store will be operating during hours when no other brick and
mortar store is, there is very little competition. The consumer also benefits by having the
ability to shop at any time via a physical store differing from an online store as the product
purchased is acquired immediately.
Conclusion
In order to move forward with this innovation, an initial investment of $75,000 is required.
This amount will be used for the purchase of the technology, the setup of the facilities and
the construction of a storeroom used to operate the innovation. A portion of the investment
will be allocated to the marketing and advertising towards consumers ensuring the success
of the project. The implementation of this modern technological advancement will assist in
portraying the company as a cutting edge retail business in the Australian industry. Adapting
and accommodating to the advanced technological retail environment while maintaining their
strong and lengthy Australian heritage, Myer will become a significant trend setter as well as
rapidly moving towards retail dominance.
References
City Of Melbourne 2016, Daily Population Estimates and Forecasts, City Of Melbourne, Date
Viewed 11th April 2016, <http://www.melbourne.vic.gov.au/about-melbourne/research-and-
statistics/Pages/daily-population-estimates-and-forecasts.aspx>
Lexie Cartwright 2016, A vending machine stocking thongs has popped up in Surfers
Paradise, Gold Coast Bulletin, Dated viewed 9th April 2016,
<http://www.goldcoastbulletin.com.au/lifestyle/a-vending-machine-stocking-thongs-has-
popped-up-in-surfers-paradise/news-story/9b86787bf4244f365fb0ea770e7e9de3>

Fair Work 2016, Pay Guides, Fair Work Ombudsman, Date Viewed 11th April 2016,
<https://www.fairwork.gov.au/pay/minimum-wages/pay-guides#R>