BSBMKG507

Interpret Market Trends and Developments

Assessment Tasks

Assessment Task
  analyses the current trends in the retail industry and compute some of the statistics as
below;

INDUSTRY SUBGROUP ESTIMATED TREND ACTUAL TREND

Supermarkets and grocery stores 0.3% 0.1%

Food retailing Liquor retailing 0.3% 0.6%

Other specialized food retailing 0.2% -0.6%

Hardware, building and garden 1.1% 3.5%
supplies retailing

Household goods retailing Electronics and electronics good retailing 0.3% 1.8%

Furniture’s, floor coverings, 0.4% 2.2%

housewares and textile goods retailing

Footwear and other personally accessory 0.8% -1.5%

Clothing wears, retailing
footwear and personal
accessory retailing Clothing retailing 0.2% -0.5%

Pharmaceutical, cosmetic and toiletry 0.5% -1.4%

goods retailing

Other retailing Newspaper and book retailing -1.0% -2.6%

Other retailing n.e.c -0.2% -5.9%

Another recreational goods retailing -0.1% 1.7%

Café, restaurants and catering services 0.8% 1.7%
Café, restaurants and
takeaway food services
Takeaway food services 0.5% -1.5%

summary of trends across Australia in July 2012

If we use the data from July 2012 as a reference, we can see that the industries which have grown in trend
in 2012 were: food retailing (0.4%), household goods (0.7%), cafes, restaurants and take away food services
(0.8%) and clothing, footwear and personal accessory retailing (0.5%). Being cafes, restaurants and take
away food services the category with highest growth (1.7%) and department stores the lowest one.
 ▪ A brief analysis of each retain industry included in the report
The report shows that all industries have increased their percentage except the department stores industry
which has decreased of 5% and Pharmaceutical, cosmetic and toiletry goods retailing, Newspaper
and book retailing which had kept the same percentage overall.
▪ Calculate arithmetic mean, median and mode of department stores original turnover in 2011 and
2012

Year Month Turnover; Total (State); Department stores;

2011 May 1408.9

June 1471.9
July 1532.5

August 1293.5
September 1345.7
October 1404.7
November 1660.0
December 2730.5
2012 January 1362.4

February 1131.7
March 1349.2
April 1391.2
May 1456.9
June 1616.4
July 1423.4
Mean 1505.3
Mode Not available

Median 1408.9
▪ Compute standard deviation of the mean and show in a graphical format
 Standard Desviation
1600

1400

1200

1000

800
1505.3
1408.9
600

400

200 361.1

0 0
Mean Mode Median Standard Desviation

▪ Calculate variance in the turnover trend (%) for department stores in 2012
Turnover; Total
Turnover; Total
Year (State); Department
Month (State); Department Variance Variance (%)
stores;
stores; Original
Trend
January 1362.4 1508.0 -145.6 -11%
February 1131.7 1519.9 -388.2 -34%
March 1349.2 1529.0 -179.8 -13%

2012 April 1391.2 1533.0 -141.8 -10%

May 1456.9 1531.9 -75.0 -5%

June 1616.4 1526.5 89.9 6%
July 1423.4 1518.1 -94.7 -7%

▪ Analyse the top industry group performance in each of the states

The top one is the Food Retailing industry which has the highest number of percentages of turnover
revenue in 2011-2012 ($8,396.7 millions)

▪ Analyses which state is the top performer across all the industry sectors You may access
other reports and statistics from ABS to complete your analyses.
Victoria is the state with the top performer of all other industry sectors having the highest revenue in
2011- 2012 with average sales of $5,262 million monthly and overall $1,031,640.1 million revenue sales in
this period.
 Assessment Task 2:
Part A:
Project: Myer Ltd: Interpret and Analyses Current
Retail
Market Trends
1. Analyses changing demographic trends in major capital cities across all the states
If we use the Australian Bureau of Statistics (ABS) as a reference, we can observe that the country’s annual
population growth was 1.4% for 2011 and the population increased by 302,600 people to 22.5 million
people on that period.
Also, the overseas migration accounted for 55% of the growth for the same year while 45% due to natural
increase.

The above table shows that NSW was the state with the biggest populations by the end of 2011 following
by Victoria and Queensland. Based on the previous year, Western Australia (2.9%), Australian Capital
Territory (1.8%) and Queensland (1.5%) are the ones which have the biggest changes.
On the other hand, the Australian states which have the smallest populations of people by the end of that
year were Tasmania, Northern Territory and Australian Capital Territory. Based on this case, Tasmania,
Northern Territory and South Australia have less percentage compare to previous year by less 0.8%.

2. Analyses changes in technology

Retail industry has increased because some motivational factor which are not only technological
improvements. There are other factors like consumer preferences and competitors.
Lately, Australia has promoted the internet and digital technologies because of the country geographical
distribution and the protective market laws. As a result, the industry has increased significantly getting
more worldwide present and also, overseas retailers have landed here settling down and creating a
more competitive local market.
As we can imagine, technology has an important relevant position in this new retail industry growth like
ecommerce and online shopping. However, this improvement demands better and convenience solutions
to customers worldwide because companies need to expand overseas in this competitive market and
reach new customers wherever they are through innovative ways of shopping.

3. Analyse changes in consumer buying habits and preferences

Recently, department stores have noticed a slow negative growth in the market because of the consumer
habits. Consumers prefer buying online. Also, the retail good industry is losing incomes because consumers
prefer spending their money in services like finance, rent and education.
As a consequence of this, the long-term trend in the growth of retail sales has been reduced during the last
5 years because consumers are firstly paying their debts. Obviously, it is a negative impact for the retail
industry but in the other hand, it shows a positive impact in the population’s development.

4. Analyses economic trends (2011)

The table shows the period between 2009-2010 which the retail industry is the one which has employed
more people in Australia - 1.2 million people – 10.7% of the total working population of the country. During
this period, the employees’ incomes were $32 billion (wages and salaries) which equivale 6% of the total
economy.
In conclusion, the retail industry has an important impact in the economy contributing $53 billions of GDP
which is the 4%.

If we compare this data with previous years, we can see that the employment numbers in the retail
industry has increased from less than 900 000 people in the 90s to almost 1.2 million people in 2009-2010.
However, if you have a deeper look, you can see that the numbers have kept stable since 2002-2003 and
then it has fallen from 12.1% to 10.7% in 2009-2010. Finally, the contribution of this sector to the GDP is
declining gradually from 5% (1996-1997) to 4.1% (2009-2010).

5. Analyses social and culture factors affecting the retail industry

In the past, consumers didn’t play a relevant player position in the retail market. However, nowadays
consumers have the power of choice according to Total Retail 2017 (PwC) which points out that we are
living in an era of convenience and low prices.
One of the main important changes is the way the consumers make their purchases. The above-mentioned
study indicates that from 2013 to nowadays, consumers are searching and buying more online using their
mobile instead of visiting the physical stores or using their computer and tablet. This new habit is
challenging companies to improve their smartphone experiences for its customers. Wrongly, companies
are
stuck in the past generating its main sales on the physical store (79%) and its website (73%) instead of
promoting mobile apps which is just 35% of its sales.
Finally, millennials generation are having more importance in the decision and purchasing process.
Consequently, the study shows that this generation usually use social media more for price research than
the other generations. These social media and new interaction provide stores the possibility to expand its
consumer experience through other consumers experience providing feedback and reviews about their
experiences with the same product or service.

6. Summaries retail industry trend analysis (2011)

In the last decades, the retail industry has faced frequently challenges like the current online shopping or
the entry of global competitors. Both challenges offer countless advantages for customers. However, if we
translocate this to Australia, we can see that the retail industry only represents around 4.1 per cent of GDP
with a total of almost 140,000 retail businesses, representing approximately 10.7 per cent of employment.
Unfortunately, the retail industry law prevents a more flexible operation so it makes more difficult to
adopt new productive practices. For example, planning and zoning regulations which are complex,
excessively prescriptive, and often anticompetitive; and trading hours regulations which restrict the
industry's ability to adapt and compete with online competitors and provide the convenience that
consumers want.

Calculate measures of central tendency (Mean, median and mode) of consumer spending per
household in 2011

Month Consumer spending per household

January 220

February 223

March 226

April 222

May 212

June 213

July 245

August 265

September 234

October 231

November 234

December 256
The measures of central tendency are:
• Mean: 231.75
• Median: 228.5
• Mode: 234/213

7. Calculate standard deviation in household spending

Based on the table from question 7, the standard deviation is calculated in 16.41%.

8. Calculate measures of central tendency (Mean, median and mode) of consumer spending on
online purchases 2011

Month Consumer spending on online

purchases
January 204
February 208
March 202
April 203
May 210
June 205
July 206
August 207
September 208
October 209
November 204
December 211

The measures of central tendency are:

● Mean: 206.41
● Median: 206.5
● Mode: 204

9. Calculate standard deviation in online purchasing

Based on the table from question 9, the standard deviation is calculated in 2.87%.

10. Among the highest online spenders in or state, calculate a Z-test to calculate how far the sample mean is
 to the population mean.
The biggest spenders in 2011 in Australia were the residents of Point Cook in Victoria (data from Australia
Post's Inside Australian Online Shopping report) following by Toowoomba in QLD and Liverpool in NSW.
The population in Australia in 2011 was:

It means that 22.34 million Australian people spend around 206.5 hours shopping online.
To calculate how far the sample mean is to the population mean, I will need to know:
sample mean – 206.41
hypothesized population mean – I just know the population in 2011 which was 22,485,300
sample standard deviation – 316.1
sample size – I don’t have this data

So, if we use the below formula, we could get the result

https://www.abc.net.au/radio/melbourne/programs/breakfast/point-cook-residents-australias-biggest-online-
spenders/8509628
https://business.nab.com.au/wp-content/uploads/2015/03/NAB-Online-Retail-Sales-Index_in-depth-report-
January-20151.pdf
https://www.abs.gov.au/ausstats/abs@.nsf/lookup/3101.0Media%20Release1Dec%202011
https://online.stat.psu.edu/stat200/book/export/html/176?
fbclid=IwAR0JTCYpZVvUyafaSCQoqwMMa6Y2lgAYAbTPBXpR1ENhlUQhzLNxPciie5A

Assessment Task
2: Part B:
Myer Ltd: Prepare and Present Market Data

1. Describe the target market segment for marketing activities based on demographic
and psychographic matches
The target market audience for Myer store is 19-39 years old (teenagers, young-adults and
adults), female and; multi-faceted and decision maker within the family. However, the
brand Myer offers a wide variety of products for the whole family starting from kids, ladies,
men, sport accessories, shoes, handbags…
Using Myer’s words for defining its target: “These women are fashionable, successful,
works out, values her family and enjoys celebrating her purchases with a glass of bubbles”.

2. Conduct a competitor analysis (e.g. David Jones) on a state to state basis

using public domain information (media reports, annual reports etc.)

As Spaniard, I have choice Zara as example.

Zara is a Spanish company which has more than 2,100 stores worldwide. They opened their
first store in Australia in 2011 which included men, women, and children clothing. As the
rest of the stores around the world, their products are based on fashion current trends. Four
years ago, Zara Australia’s revenue increased 24% for $222 million opening 2 new stores in
Brisbane and Miranda, NSW. The full-year profit rose from $10.2 million in 2015 to $15.26
million in 2016.
Based on the previous context where globalization is a clear advantage for retail companies
because they can access new countries and lower prices, Zara is playing a successful role
and it is a strong competitor for Myer. Even though, Myer has been in the Australian market
longer which doesn’t guarantee success.

3. Make recommendations on which areas the company should focus on for the
future growth

Based on the technology changes and the new consumer habits, I strongly recommend
Myer to develop new strategies to approach its target audience. Obviously, Myer’s market
share is in risk as its profit which is being reduced lately. The best way to keep update is
observing the competitors and the tendencies of the market. For example, Zara doesn’t
spend money in traditional off-line advertising; all its advertising budget goes in social media
and online platforms where the brand gets higher profits. Also, Zara always offers the last
tendencies and innovations in its collections. If Myer wants to survive in this globalization
retail world, it would need to modernize the brand and transfer all its business to the digital
world. For that, the brand should need to invest in its marketing, research and innovation
departments and develop engagement strategies with its customers. The current generation
of women are digital users with their own source of income who are looking for great user
experience and don’t have time for visiting physical stores.

4. Make recommendations on which areas the company should review for

redevelopment or withdrawal

Firstly, Myer needs to analyze the current Australian market to develop successful strategies
in the household good and food retailing. Regarding the clothing area, it has decreased with
a negative growth lately. However, these negative numbers show that the market has a
potential growth in the future (if we would not have the COVID-19). Secondly, Myer can
expand to other states and cities to reach more consumers in Australia.

5. Recommend an appropriate forecasting tool and methodology that the company

can use to forecast future trends

It is important that companies invest time and money forecasting because it will support
and help them to make decision and plans in the present which will affect the future of the
company. Carrington and Pereira (2011) says that, futures research evolved as a way of
examining the alternative futures and identifying the most probable business alternatives.
It is extremely vital to determinate what is the most forecasting satisfactory method and
tool. Also, it requires a complex set of activities and a range of studies in the first moment.
Fortunately, the benefits of selecting the right forecast tool are enormous for the company
like reduces operational work and storage costs.
One of these forecasting tools and methodologies are CPFR – Collaborative Planning,
Forecasting and Replenishment which is a web and flexible platform that creates a
collaborative process with the same KPIs, objectives and forecasting data of the demand and
replenishment to avoid the excess and lack of products, as well as increase the turns of
stock. By creating a collaborative environment between organizations, the software ensures
that all stakeholders in the supply chain are aligned in forecasting the demands to generate
a more efficient planning cycle.