The other thing I find amazing right now is that landlords are increasing paid parking at their centres. I know they say they can’t have people parking there all day, but they lived with it up until now. And now you’ve got the threat of online, and fewer people visiting centres… Why would someone drive around a carpark, get frustrated and pay for it, when they could just have something delivered to their home? Why are we making it difficult for them?

You see it happening in more and more centres, it’s just creeping across. A customer will happily pay $40 for something online and rave about getting free shipping, and another one will pay $30 for something and complain about $9 of shipping. It’s the same psychology with paid parking. Customers don’t like it.

IRW: How do you counteract the drop in foot traffic without just resorting to slashing prices?

JC: I think if you look at retail in general, those with the clicks want the bricks, and those with the bricks want the clicks. Imagine if the world were all online, and this new thing called a ‘shop’ opened, where you could touch the product, try it on and bring it home straightaway, do you think online would be under threat? Of course, it would. So there’s an argument for both.

I look at our business now and see that online is growing at an unprecedented rate. Online back-to-school sales were 79 per cent up on the same period last year. But I also look at it and think we have 215 fulfilment centres out there, compared to an online retailer that has just one warehouse in central Sydney.

So we have to grow our click-and-collect, click-and-deliver. It costs a lot of money, but we’re investing in that area. Whatever way the customer wants to shop, we don’t care, as long as we’re selling them shoes.

You’ve got to get the product right; you’ve got to be competitive. There’s less wiggle room for error than there’s ever been. You’re only as good as your data; there’s more analysis than ever of making sure your range is relevant, not too wide because you don’t want to have too many markdowns.

I would be interested to know how many people are really making a lot of money online. There’s no doubt you can sell anything online, but if you’re not making any margin, it’s no good.

IRW: So it’s about reminding customers of the reasons they like to shop in-store…?

JC: When I grew up, people used to watch TV after dinner. Now they’re shopping online. Whether they choose to get it delivered, or they come to the store to get it, all those options are there. No retailer really likes returns, but if the customer comes into the store with a return, you’ve got to say fantastic, because they’re in the store. All of a sudden a return from an online purchase is the greatest opportunity you have to sell them something else.

It’s about getting all of it to work, and it’s not as easy as it sounds. The changes you need to make to your IT and backend are huge and require significant investment, and the culture of the business needs to change from being store-focused to being company-focused. Whatever way we can make the sale, we do it. And that’s a big change.

IRW: In terms of IT investment, is that something you’re doing now?

JC: We’re always doing it, but 2018 was a wakeup call to fast track it.

IRW: What capabilities are you looking to gain from that investment?

JC: We want to be able to sell on every platform available, but you wouldn’t believe the changes you need to make – and the time and money you need to spend – to be able to sell on other people’s platforms. It’s not easy. I think we’re all going to have to collaborate going forward. In order to keep growing the business, we’re going to have to collaborate with online-only platforms, or other retailers. We might end up selling shoes on a fashion retailer’s website in the future, and we’d have to pay a margin to them.

IRW: Has Spend-less Shoes ever sold through an online marketplace like eBay in the past?

JC: We are now. That’s something we did in 2018.

IRW: What about Amazon?

JC: We’re looking at that. As we sit here today, Amazon has been in Australia for 61 weeks. I don’t know that Amazon has changed the world in Australia, but I think it’s changed the psyche. I think all other websites have lifted.

I fully respect Amazon, and we’re talking to them and looking to engage with them in the future, but by their own admission, it’s steady as she goes [in terms of growth]. But I think they’ve changed the psyche of customers and retailers. We’ve all gotten better at [online]. You don’t get 79.7 per cent up unless you’re better at it. We handle returns better, so the customer isn’t scared of shopping online.

IRW: Still, data suggests that the growth in online shopping hasn’t made up for the slowdown in bricks-and-mortar sales…

JC: No doubt consumer spending is down. In tough times, we all do analysis by paralysis. It’s funny, when you’re flying, you don’t do the same analysis. I think we have a culmination of factors. I think petrol prices went up 22 per cent over the course of 2018, and I can tell you that whenever petrol prices are up, our business suffers, because we’re on the more budget end of the spectrum. But you’ve got to say that falling traffic in shopping centres is a concern. That’s the biggest one.

IRW: Shopping centre owners often talk about turning shopping centres into community hubs to drive foot traffic. But do you think they need to be doing more? Or reducing rents?

JC: They’re going to have to. I’m not picking on them; they’re doing a great job providing fantastic environments in which to retail. They’re probably as good in Australia as anywhere in the world because you have everything: supermarkets, department stores, discount department stores. In the US, you only have department stores and specialty retailers.

But this is a global phenomenon; it’s the same in the US and UK. I don’t think even they [shopping centre owners] saw the drop-off coming. But as they change into community centres, as they increase dining, or wellness centres or dental shops, is that going to help a fashion retailer like me? In my view, no. And therefore the rental for the fashion industry has to have an adjustment.

IRW: Does the current slowdown feel like an unprecedented low point, or is it something that happens every couple of years that you get through?

JC: We had a tough 2014, and I don’t think it’s as bad as 2014 was, and we had a good couple of years after that, but the feeling is different. As I said before, I think we’re in a renaissance, not an apocalypse, but a lot of things are going to have to change. Rents will have to come down. You’ll have to find the best way to market and advertise yourself.

Shopping centres aren’t going to die, but we’re in the middle of a shift. And the good retailers are going to have to figure out how to adapt, and that means getting your rent right. You’re not going to be able to afford being in every centre like you used to be, and that means being in the right centre with the right store and the right rent. I think there will be a lot of that going on.

IRW: What else is a priority for you in 2019?

JC: I think those things I mentioned – growing online, collaborating with other retailers and making sure occupancy is something you can afford because you won’t have the fat to carry it off – are the key things.

IRW: Have there been any changes on the supply side of the business that would make it harder or easier for you maintain margin, as you consider collaborating with other retailers?

JC: If you talk about factories that are making shoes for the world, sales in the UK are clearly down. America is up a bit, but I think there’s a lot of nervousness everywhere in the world. All the factories we deal with are feeling those pressures. If someone’s got 11 factories in China, they’re looking to go to nine to keep them competitive on price. I’d like them to keep 11 and be more negotiable on price! Of course, China is also getting dearer.

IRW: I understand you got your start in retail selling shoes at David Jones. What are your thoughts on the competitiveness of department stores today?

JC: Clearly it’s shrinking. I think 10 years ago, department stores used to be around 40 per cent of the sales of shopping centres. I think it’s closer to 30 per cent today, so it’s been an enormous change.

I think they’ve got an enormous opportunity, but in my experience, their websites are clunkier and harder to shop on than Amazon. And if I want to go into a store, I walk into the ground floor and get the atomiser invasion and see staff everywhere and think this is fantastic… But then I go to the department I want to go to and there’s no one there, or it’s a concession area and they say I work for X brand, I can’t help you. Or I do buy something, and it takes 10 minutes for the transaction to go through.

They’ve got a lot to get right. It’s easy to say, but harder to do. I think they’ll get smaller and more efficient, but it’s taking them a long time to do.

IRW: Do you think anything has changed from the time when you were an employee? Do you think there was more investment in training in the past?

JC: I think the specialties have just gotten so much better over the years. Department stores are fighting against them, but they don’t have the expertise. Not that they play in our part of the footwear industry, but years ago, Myer used to have the bargain basement and have budget footwear in that area. But we’re so focused on it.

All those specialty shops that line the malls are good operators and they’ve taken that business away from the department stores. There’s still room for a one-stop shop, but you can’t have a David Jones everywhere, because not every suburb can handle an upmarket range. That leaves an opportunity for Myer, but they’ve got to concentrate on what they do the best in.