Strategic communication strategy

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Strаtеgiс Соmmuniсаtiоn Strаtеgiс

Effects of Demographic and Economic Shifts on Affect Davis Jones


The organization chosen for this assignment is Davis Jones Limited. The company runs a chain of departmental stores in Australia and is in the process of expanding to regional countries. The company’s retail stores offer apparels, home appliances, electrical, body care products, technological products, food and wines (David Jones, 2016). In Australia, the retail industry contributes about 10% of the national economy. The sector exhibits great diversity in terms of the nature of goods sold, business size, retail format and region. Although a number of factors affect trends in the retail sector in Australia, demographic and economic shifts are the most important ones. This paper provides an assessment of how economic and demographic shifts will affect Davis Jones.

How Demographic and Economic Shifts Will Affect Davis Jones

The demographic characteristics of a country hugely influence consumptions patterns in the retail sector. According to William, Robert and Jack (2011, p.32), a number of demographic trends can have a major impact on organizations in the retail sector. These factors include income distribution, age and rate of population growth. Being a developed country, Australia has one of the rapidly aging populations in the world. This factor, together with immigration trends will change the demographic characteristics of Australia and cause massive evolutions in the retail sector. Generally, demographic shifts will not have any major impact on David Jones because demographic characteristics take a relatively longer time to change. As such, David Jones will feel the impact of demographic shifts after three or five years.

Change of lifestyles will be the most important demographic factor affecting trends in the retail sector. It is likely that in three to five years, the attitudes and needs of retail consumers will be transformed and their habits changed. Most Australian consumers are well educated and sensitive to the changing atmosphere of the retail business. A rise in household incomes as well as the expansion of the middle income population will put pressures on retailer such as David Jones to develop innovative marketing strategies. In addition, retailers will be expected to deliver high quality products and at low prices to counter competition (Mitchell 2008, p. 14).

In five years, Australia’s current population will have aged significantly. This will cause a decrease in the country’s Gross Domestic savings, which will in turn reduce spending in the retail sector. For the younger population, most of them will be looking to create life foundations such as investing in families or personal human capital. It has been established that majority of young people like quality branded products with logos of leading retailers. Therefore David Jones will have to develop innovative branding techniques to attract consumers from this demographic group. Fashion is also a major factor with a bearing on demographic characteristics. According to William, Robert and Jack (2011, p. 36), young and middle aged consumers are sensitive to fashion products. Therefore, David Jones will have to stock high quality fashion products to effectively target consumers from this group in three to five years.

Economic Factors

Economically, Australia is a highly developed country with a mature retail sector. If the economic situation continues to be stable over a one, three or five year’s period, then the retail sector will grow tremendously. In essence, companies such as David Jones will make huge gains in terms of revenue growth, sales and customer base. On the other hand, if the economy slows down, household incomes will be affected adversely. This will in turn cause consumers to lose confidence in the overall state of the economy, which will affect the retailers. Usually, confident consumers tend to be more willing to spend money in shopping than those with low confidence. Therefore David Jones is more likely to prosper when the economy is stable (Baten 2016, p. 17).

Another important economic factor that will have an impact on David Jones is employment. A state of high unemployment in the country will have a severe impact on David Jones. Unemployment will cause a drastic shrinkage of consumer spending because unemployed people have little money to spend. However, if employment stabilizes over a five-years period, consumers will have sufficient incomes to spend in retail incomes. Similarly, interest rates will have an effect on the ability of David Jones to conduct its businesses. High interest rates will make it difficult for David Jones to obtain credit facilities to support its business operations. Low interest rates will make loans cheap and hence David Jones will be able to secure loans to finance its businesses.

Another economic factor that will have an impact on David Jones is inflation. The retail sector is particularly sensitive to inflation because it deals with household goods and services. Over the next twelve months, inflation is not likely to be a major issue in the Australian retail, sector. However, most companies are likely to increases prices in three to five years. Therefore, the retail sector will be hard hit as commodities will become expensive. In addition, inflation may end up reducing the purchasing power of retail consumers if salaries are not increased (Mitchell 2008, p. 52).

Stakeholder Map

The following diagram shows the stakeholder map for David Jones.

Strategic communication strategy

As shown on the stakeholders map above, David Jones has to serve the interest of various stakeholders. Customers and suppliers will be affected most by demographic and economic groups. Adverse changes in economic or demographic conditions will cause suppliers to increase the cost of goods supplied to David Jones. This will cause consumers to spend less in purchases.


Demographic shifts will be a major consideration for strategic decisions at David Jones after three to five years. During this time, changes in population and age distribution as well as growth of the middle class will force David Jones to reconsiders its marketing strategies and product portfolio. Inflation, fluctuations in exchange rate, unemployment rates and economic growth are the main economic factors that will have an impact on David Jones business. In one year, most of these factors may not have a major effect on the company. However, their effects will be felt greatly in three to five years.


Baten, J. (2016). A History of the Global Economy. From 1500 to the Present. Cambridge: Cambridge University Press.

Baumol, W. & Alan, S. B. (2006). Macroeconomics: Principles and Policy. Thomson South-Western. Retrieved from About us.David Jones (2016).

Mitchell, P. (2008). Discovery-Based Retail. Melbourne: Bascom Hill Publishing Group.

O’Neill, H. (2013). David Jones: 175 Years. Sydney NSW: New South Publishing.

William, M., Robert, J. & Jack, R. (2011). Business. Adelaide: Cengage Learning.