Myer CEO speaks to 2017 MBA class
Mr Richard Umbers, CEO of Myer, presented a live strategy case at the first class of the new Monash MBA class on Sunday 12 March 2017. He set the scene for department store retailing in Australia by outlining the global competition all retailers, and particularly department stores, currently face.
Mr Umbers referred to Zara and H&M as examples of international corporations entering the Australian market with very different cost structures. Australian consumers have responded very well to these new players, and Myer finds itself having to respond appropriately.
Left to right: Professor Patrick Butler, Director MBA Programs, Professor Michaela Rankin, Deputy Dean, International, Gordon Koh, MBA student, Mariella Salita, MBA student, Richard Umbers, CEO, Myer, Professor Edward Buckingham, Director, Engagement
Mr Umbers presented a fascinating account of the changing societal and demographic features in Australia that impact department store business models. While they conventionally sell branded goods, millennials value sharing an experience over the ownership of actual products. In the context of social demographic and technological change, the Myer organisation must reposition itself to take advantage of the demands of this critical generation of consumers.
Mr Umbers also shared the narrative of the Myer strategy for the new market situation. In particular, he gave an account of the execution plan for the strategy which included an emphasis on a new product range, customer service experience, the omni-channel approach, and a new store network for Myer.
The next wave of competition for Myer includes the expected entry of Amazon into the Australian retail market. In the context of this new form of competition, Myer needs to develop a new series of metrics for market analysis.
The MBA class had numerous questions involving segmentation and targeting strategies, the customer experience, evaluation of the customer experience strategy, and how as CEO Mr Umbers would balance shareholder, employee, and customer interests. Umbers compared Asian and Australian shopping experiences and models and referred to the low wage structure overseas and the incentives department store retail assistants receive.
MBA students will undertake a strategic analysis of five divisions of the Myer organisation, and will present their business model report at the end of term.