David Jones looks to stop the rot online

David Jones looks to stop the rot online

Summary: David Jones' chief Paul Zahra has laid out a strategy that will see the retailer boast tens of thousands of online products on its mobile, online and Facebook stores by next year, in a bid to reverse the company's fortunes.


David Jones' chief Paul Zahra has laid out a strategy that will see the retailer boast tens of thousands of online products on its mobile, online and Facebook stores by next year, in a bid to reverse the company's fortunes.

David Jones reported lower than expected first-half profit numbers yesterday, reporting a net profit after tax figure of $85 million for the six-month period ending 28 January 2012. This figure represents a 20 per cent slide in profits from the previous corresponding period of $105.7 million in the first half of 2011.

Zahra yesterday acknowledged that the retailer is facing some of the most challenging retail conditions in the last half century, and laid out the company's plans for getting back on track as a revamped, "omni-channel retailer".

"The primary focus of the company is to lay the foundation for future growth and development as an [omni-channel retailer] by implementing the system's platforms, organisation structure and processes required to support the company's transformation," David Jones wrote in its strategy documents posted on the Australian Securities Exchange (ASX) yesterday.

David Jones added that it has less than 12 months to install critical new systems to improve multi-channel retailing in time for the busy Christmas retail rush.

"The new systems, to be implemented by Christmas 2012, will include the new IT system provided by IBM, including a new web store, content management system, order management system and warehouse management system."

David Jones announced in February that it had teamed up with IBM to help drive its new omni-channel retail strategy.

Other new systems coming to David Jones include a point-of-sale system, a single omni-channel retail management system, traffic analysis system, workforce-management software, merchandise planning tools and a system that will allow for the automation of rebate collection and mark-down calculations.

The company will add 200 new staff solely to manage the new IT initiatives across the business. The new staff members are slated to work within the company's retail services division.

The retailer will lean on new technology and new staff to launch customer-facing retail initiatives, including a web store boasting 90,000 products. David Jones says it is looking to international retail giants like Macy's and Nordstrom for the way forward online.

"In 1Q13, a new web store will be launched, featuring approximately 90,000 [stock-keeping units (SKUs)]. This compares favourably to Macy's, which has 50,000 SKUs online, and Nordstrom's, which has 138,000 SKUs online.

"A further extension of the web store will be rolled out in 2Q13, with enhanced functionality such as customer reviews and ratings, additional carrier options and additional payment plans. This will ensure that David Jones' online offer is competitive from both a local and international perspective," the company wrote.

David Jones will also release a mobile-optimised version of its web store to run natively on smartphone platforms, which is aimed at stopping customers from window shopping in David Jones before buying an equivalent product online from another vendor.

David Jones will also roll out a store on its Facebook page in a "social commerce" push.

"Customers will be able to browse, purchase and organise delivery, all within the social commerce channel via the company Facebook platform," it said.

These innovations will also offer customers a transparent view of David Jones' stock levels, allowing a mobile app user to log on and check whether a particular store has stock near them if they don't want to wait for items to be delivered. David Jones says that it will also be helpful for customers looking to check whether a particular store has a big ticket item — like televisions or whitegoods — in stock before they trek out to the store.

David Jones is also awaiting the results of a taskforce set up by the Productivity Commission to investigate cost-effective ways to lower the sub-$1000 GST threshold for international purchases, which it admitted last year is too high.

David Jones shares closed 10.99 per cent lower yesterday after the poor results announcement, and they continue to slide today.

Topics: Apps, Browser, E-Commerce, Enterprise 2.0, Tech Industry

Luke Hopewell

About Luke Hopewell

A fresh recruit onto the tech journalism battlefield, Luke Hopewell is eager to see some action. After a tour of duty in the belly of the Telstra beast, he is keen to report big stories on the enterprise beat. Drawing on past experience in radio, print and magazine, he plans to ask all the tough questions you want answered.

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  • Finally perhaps they are starting to wake up.
    5 years ago I could go online to John Lewis a department store in the UK to view someone's gift registry for a wedding and being able to order it directly and have it delivered directly to them, yet Myer you still needed to go in store, get a list, and find the item. I notice you can now "view" items, but that's it.
    This is just one example, how silly have these companies been?
    • Yes, Nimos companies are now taking a step back to what they used to be back in the days when I could take in a soft drink bottle and get some lolies for it
  • many Aussie retailer don't know the real reason why shoppers have turned to online shopping in the last 5 years apart from that they're now "buying" online.

    If David Jones thinks it can open an online or Facebook store with the same prices as their bricks & mortar store, then the skill shortage apparent in Australia is deeper than anyone thought.
  • Sounds like too little too late. It doesn't matter how many ways you can shop with DJ (on line, facebook, Mobile, in store etc) if their prices are still ridiculously high.

    How the hell is "a mobile-optimised version of its web store" supposed to stop people window shopping at DJs and buying elsewhere if their prices are still ridiculously high?

    Big businesses like DJ just don't get it, it's about more than just being on line. Being on line isn't enough. DJs still has brick and mortar stores that have to be rented, maintained, staffed, heated/cooled, lit etc... which means they have to pay for it some how and the way they pay for it is inflated prices.

    Maybe being an "omni-channel retailer", having an "omni-channel" presence might "synergise the buisness", it might boost proffits a tiny bit. I don't think it's going to make them the amount of money they think it's going to bring them. It's just going to be another IT disaster that ends up costing more money than it makes.

    It all smells like desperate BS to stay relevant, to make an old dying business model work in the digital age.
  • Love the iPhone app. Maybe its just me be if I'm deciding what to buy for lunch I will do it on the spot but if I'm looking for a TV I will spend a bit more time and use my PC at home.

    Just like Gerry Harvey, these people are used to forcing the customer into the business model they want to provide, but now that the internet has shifted the power balance in favour of the consumer they dont know what to do.
  • They laid out the strategy.
  • David jones is finally getting with the times. However, they fail to see that by going online, they now compete with thousands of more stores which are also, at a click of a button. David Jones products will still have a very high pricetag on them, and simply cant compete with other retailers online which dont not have millions invested in staff, advertising, warehouses, malls and other assets. We can all see David Jones going down the drain very quickly if they fail to see that new customers are wanting to spend less buck for more bang.
  • Good to see they woke up and smelt the roses. I am absolutly fed up of having to get my stump jumpers in the store instead of having the plesure of ording them straight away online, its handy as i can don this on my iphone straight from the casting deck after i get snagged. This way i can always make sure that i have a tray full of stump jumpers ready for any occasion.
  • Valid point Daneo23 ;)
  • Great comment Munro123, such a very true statement