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Myer Turns to Loyalty Program and Online Infrastructure for Revenue

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By Published On: April 30, 20180 Comments

The struggling department store has announced plans to focus on less conventional revenue streams, by looking outside of its traditional retail business.

In a letter to shareholders, Myer’s Executive Chairman, Gary Hounsell announced the businesses plans to hire a team of new staff solely for the purpose of sourcing and obtaining alternative revenue streams.

According to Hounsell, Myer plans to start leveraging its digital infrastructure, data, and loyalty program by making it available for various functions to licensed third parties.

“To date, our focus for these businesses and services have been to support the core business,” Hounsell said in the letter to Myer’s shareholders. “However, there is no doubt that there is significant longer-term potential to leverage these assets to support initiatives outside our core retailing business.”

In March it was revealed that Myer was separating the Myer One loyalty program and Myer Online as two distinct business units, under the review of Mark Cripsey, Myer’s chief operating officer. Since announcing this change to the department store’s business structure, Myer has reported better synergy between different branches of the business, as well as improved performance by its loyalty and e-commerce service offerings.

“These are not traditional retail assets, they are assets relating to technology, media, and publishing, as well as insights and analytics,” Hounsell said. He also claimed that this more single-minded focus would allow Myer to increase the value of each individual asset, driving them “harder and faster”.

Part of this broader-minded plan will include the department store’s recently launched order fulfillment service, Zippy, which helps to reduce stock movement costs and times, being licensed out to other businesses.

In support of the plan, Hounsell cited recent achievements in Myer’s new approach to making money, including Myer’s new credit card, involvement in Australia Post’s Shipster delivery club, and working with Uber over the busy Christmas period in 2017, all of which prove independent loyalty and online ventures can prove valuable to the business in the long-term.

In an effort to boost confidence in Myer’s newly appointed CEO, John King, Hounsell also expressed his support of King and the full mandate for improvement that King will be receiving from the board.

“We strongly believe that your interests as shareholders will be very well served with John King at the helm, supported by a conflict-free Myer board,” Hounsell said.

This announcement has come after years of declining sales for the embattled retailer, having suffered through a $515 million write-down of the value of its brand names in the last quarter alone.

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