With it's share price already under pressure, The Warehouse is gearing up to face the challenge of Amazon's arrival in the Australia and New Zealand region.
Chair Joan Withers told investors at the company's annual general meeting today that the falling share price - from $3.00 to $2.10 over the last year - was driven in part by the arrival of Amazon and was a "serious concern for the board".
"Part of the decline relates to the sector, and the fact that with the announcement of Amazon’s arrival in Australia, retail shares in the region have suffered losses in value," Withers said.
"Over $2 billion was wiped off the value of ASX listed retailers in the month following Amazon’s announcement it was bringing its retail offer to Australia."
Retailers who have done little to change their business models to engage customers in the digital era were right to fear the arrival of Amazon, she said. Business as usual or incremental change was not an option.
"Globally, retailers are besieged, and only those who are the fittest and who have made the changes needed to compete for today’s customers are successful," she said.
Group CEO Nick Grayston told investors acceleration of The Warehouse's transformation plan was now an imperative.
Power had shifted to consumers and retailers need to engage in the new rules of retail, he said.
The Warehouse's business model has to evolve to utilise new technologies and platforms to connect consumers across global marketplaces and to create an experience that differentiated the company from its competitors.
The Warehouse had to fix the fundamentals, become more agile and reduce costs through increased automation.
In addition, the business also had to invest for the future to create a mobile-first platform to build personalised offers, digital capabilities and ecosystems to respond to customer needs.
The Warehouse would use its stores along with e-commerce to deliver dynamic pricing, last mile delivery options and click and collect offers.
Customer interactions needed to be "effortless, personalised and seamless" and across multiple brands and channels, Grayston said.
The retailer also had to deliver innovative ways to engage and reward customer loyalty and create value added service offerings.
Withers said the board had to to take responsibility for "serious missteps" in the past. The divestment of the company's loss-making financial services was recognition of that.
"As a business we have been working hard these last six months to improve the awareness of our message to the market, and show investors the progress we are making," she said.
"Our strategy is ambitious and comprehensive, but we have already executed some key elements of it and the early signs are encouraging."
Key to accelerating transformation was to learn from the lessons of retailers in the Northern Hemisphere who have faced competition from Amazon for some years, she said.
Withers pointed to the success of the Noel Leeming chain, which reported a 60 per cent improvement in operating profit, as one high point.
A healthy balance sheet would also allow The Warehouse to maintain a healthy dividend yield for shareholders while investing in transformation.