David Jones has continually downplayed speculation that it will come to Auckland next, but many are predicting it will.
While it has been suggested that David Jones could go into Precinct Properties’ downtown development at the bottom of Queen St, Wilkinson says this isn’t the only potential site it could go into.
“We shouldn’t just predict it’s going to be a city centre thing, because its quite possible that they would look at sites, for instance Newmarket and Sylvia Park we keep forgetting about,” he says.
Much like H&M announcing its first store would go into Sylvia Park in 2016, Wilkinson says there’s other areas that will appeal to the retailer.
“David Jones could potentially look at [Westfield Broadway] 277 because that would give them huge profile. The demographic that David Jones chases is the Newmarket shopper and that whole area.”
Head of property at David Jones, Cristie Gordon, gave a presentation hosted by the Property Institute in Wellington offering insights into why it decided to come to the city.
The company is buying Kirkcaldie & Stains for more than $500,000 and spending more than $20 million on refurbishing the premises of the 152-year-old business.
Wilkinson, who attended the presentation last week, says the Kirkcaldies space was essentially too good an opportunity for David Jones to pass up.
Tourism was a key factor to draw the company to Wellington, with cruise ships bringing about $50 million in retail spending into Wellington’s CBD.
As well as this, Kirkcaldie & Stains had strong data to give David Jones that identified a local appetite for luxury brands, he says.
Wilkinson says the recent purchase of the company by Woolworth SA has also given David Jones the capital injection and the confidence to go forward and expand its reach.
However, there would be challenges in other cities David Jones would have to face if it expanded outside Wellington.
Wilkinson says while it doesn’t have any competition in Wellington, cities like Auckland and Christchurch already have key department stores Smith & Caugheys and Ballantynes servicing the local population.
“Ballantynes has a huge amount of goodwill with the local market, probably even stronger with the earthquake,” he says. “That market is very supportive of its local traders, so approaching the Christchurch market will take a little bit more consideration.”
Though David Jones could be seen as a market disruptor that would pull some customers away from the stores, Wilkinson says it’s usually temporary.
He says the arrival of an international competitor makes a difference to local stores initially – often impacting on 20 to 40 percent of the trading performance – but after a period of time, things stabilise.
“What you can often find is that a rising tide floats all the boats. What would be likely to happen is the city centre would possibly steal more business from the suburbs,” he says.
Wilkinson said David Jones’ store format would differentiate itself from its competition, as it will have a particularly strong focus on omnichannel and digital integration.
Chief executive Ian Nairn has spoken of the Wellington store having the latest retail technology that shoppers expect from a “premium department store”.
Wilkinson says this could include people shopping seamlessly online and in store, such as going into the store, checking out products, and then buying online and getting it delivered to home.
A store David Jones has pointed to as a model for the Wellington store is its Eastland, Victoria store, he says.
The store has click-and-collect pick up stations, ‘omni-mirrors’ with mirrored frames, customer dwell areas with charging stations, free wifi and the whole catalogue available to be shopped online in store.
“People are being empowered to shop the way they want,” Wilkinson explains.
He says the takeaway for department stores in Auckland is to be prepared for David Jones.
“Other department stores should definitely be upping their game, as consumers will be expecting it.”