Learning From Myer’s Online Disasters

Myer teaches us that failing in the online world is just like failing in the physical business world. You don’t give up at the first setback.  You learn and you persist.

UPDATED 2022: Myer has finally found a winning formula for its online operations.

When we covered the ASX company eight years ago, it was a digital mess.

Now it appears to have shrugged off those earlier disappointments and has announced it will continue to invest in its online strategy.

Currently, online sales represent almost 28%of total sales, which is a nice 54% bump up from the previous corresponding period. Then in July it reported it was about to take possession of a massive facility to speed up its ability to fulfil online orders. That's crticial because there's no point having a great ecomemrce site if you frustrate customers with slow delivery.

Myer believes it has strong momentum to capitalise on and CEO John King said “we will continue to focus on growing our strong online business”.

 “Our online business has grown nearly fourfold in the past four years and is now one of the biggest online retail businesses in the country.

“In key categories, our growth is significantly outpacing competitors, both multichannel retailers and online pure plays.”

IT News reported the Australian retailer was "supercharging" its online operations.

There are two lessons in this:

1. Despite how the expression normally goes, you can in fact teach an old dog new tricks. Myer has suffered the problem many traditional companies face, which is trying to be a hybrid organisation. Instead of having all resources aimed at digital, its focus has been split. It’s taken time to get the right expertise in place to execute on its website sales plans.
2. It’s a marathon, not a sprint. Myer has persisted. It has failed, learned, adapted and is now succeeding. 

The ASX-listed company is also learning to shift its narrative. The days of 100% glamorous models are gone.

Today it uses images of plus-sized men and women, people from a range of cultural backgrounds and – heaven forbid! – even women with grey in their hair. This is a more authentic reflection of its customers.

It’s specials are nicely set up, using a lot of techniques that have been proven to get clicks, such as showing the normal price, crossed out, alongside the reduced price. 

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Here's our original blog so that you can see how far the company has come with its strategy:

What makes the Myer story truly compelling is that the Australian retailing giant hasn’t really learned from its online mistakes. It keeps repeating them. In fact, it averages one spectacular digital disaster every six months. Even worse, most have a common theme.

1. In November 2012, Myer teamed with other retailers to copy the massive Cyber Monday sales in the USA. ClickFrenzy’s marketing was hyped. Yet when the day came, the site could not cope with the traffic and it was a spectacular fail, resulting in savage online attacks from consumers.
2. In June 2013 it did it again. Some 30 minutes before its annual stocktaking sale, the Myer site went down. The reason? The same as ClickFrenzy’s fail … it couldn’t cope with the massive amount of traffic.
3. Finally some good news. By December 2013 it was being hailed as a pioneer. It was the first Australian retailer to deliver a “companion app”, that allowed shoppers to use augmented reality in its stores.
4. Then came another massive, public failure. On Christmas Day the site started grinding to a halt and was taken offline.  At a time when people had the time and inclination to spend, the retailer’s site was down for a week.

Myer has defended the above failures to the financial markets by pointing out that online sales make up less than 1% of turnover.  What they don’t say is that the benchmark in Australia is about 6%.

The retailer has been criticised as too slow and too dependent on bricks and mortar.

Nevertheless, they keep at it. They have had some good wins with SEO, with the marketing of Nespresso coffee machines being one example where they have outgunned their competitors.

I like the fact that Myer is persisting. It’s tough making transitions from a successful business model to the hot new game in town.

They are reportedly throwing $30 million or more a year at these sorts of projects. They have in-house capabilities and they are spreading their work among a variety of agencies.

THE LESSONS:

The 80/20 rule. The majority of Myer’s woes are connected to just one segment of its digital plans, that being backroom IT. If they can sort out their infrastructure problems, then a lot of their grief will disappear overnight.

They persist. Many smaller businesses have been burned online and then retreated. They’ve seen their marketing dollars burned in AdWords campaigns that didn’t deliver sales. They’ve hired “top gun” SEO practitioners (both in Australia and overseas) and been fooled for a while into thinking they were getting great results, when in fact they weren’t.

The lesson here is to persist … but to learn, too.