An open letter to Gerry Harvey
By Craig Reardon
Dear Mr Harvey
First let me say that, like most people in any size of Australian business, I have complete respect for you as a businessman of the highest calibre. Your track record as one of Australia’s most successful retailers is probably without peer in this country.
Therefore it comes as a complete surprise that someone of with such undoubted business acumen could write off the greatest business tool since the telephone as a “con” and “waste of time”.
While admittedly it is more likely to be a plaything of your grandchildren than of your peers, surely even you can see that the bulk of most western populations use the internet to assist their retail purchases – if not complete them entirely.
You only need a cursory glance at the success of e-tail pioneers like Amazon (whose last quarterly sales by the way, rose 37% compared to Harvey Norman’s 3%), eBay, Dell and iTunes internationally and Red Balloon Days, Winestar and Peter Alexander locally to understand that the internet is revolutionising the way people shop.
Of course Harvey Norman can opt-out of playing in this rich new income stream. But I suggest it’s at its own peril.
Let me share my own limited online buying experience with you.
Personally I’m actually not a big shopper of any kind let alone the web. But even I went no further than the web to purchase my largest home office item in the last 12 months.
I needed a laser printer. I’d heard a lot about Deals Direct so went there first in search of the equipment (on my PC of course). There I found a model to suit my budget and requirements. But before pressing the button to purchase, I thought I’d compare it the prices from other retailers.
So I “wandered” over to shopping comparison engine www.myshopping.com.au . There the prices for the model from around 30 retailers were listed. As it turned out what I’d heard was correct. Deals Direct did offer the best price and delivery deal so I went ahead and made the purchase.
The next day before I’d finished opening my emails, the delivery van turned up to my door with said laser printer. “How good is this” I said to myself – or actually to Charlie our spoodle.
The obvious concern to you in this standard online transaction was not only that Harvey Norman didn’t get the sale, it was nowhere to be seen when shopping around for the best deal.
This lack of visibility on a medium about to become more popular than television can’t be good for your business.
And I’m not even an early adopter with online shopping, coming in somewhere around “late majority” – the slower half of the adoption curve.
But what concerns me most is not the strategy you’ve chosen for your own business – that’s clearly the business of you, your team and your shareholders.
The far greater concern is the message a captain of industry like you is giving to your fellow Australian retailers about this significant new promotion and sales channel.
Part of my work is as an e-business educator to Victoria’s small business community. I provide affordable and fun information evenings to assist business operators – including retailers, understand the web and how it can assist their businesses.
Recently I ran an evening in Melbourne’s northern suburbs about selling and promoting online. Despite being promoted by the Economic Development Officers of six local councils to their lists of local businesses, numbers for the evening were not looking great.
So I thought I’d get away from the office and go and talk to retailers over two afternoons. In total I must have visited 100 retailers in the area to tell them about this great, convenient and affordable way to find out about the web.
Now I’m not the world’s best salesperson as my former sales trainer wife would attest. But even I could get at least a handful of retailers along to this event.
Or so I thought. Of the 100 retailers, not one would part with the $35 to find out about the web. Even though we put it on after closing time and offered to feed them!
Clearly those retailers had already heard that the internet was a waste of time.
But it’s not even those retailers I’m concerned about.
What I’m concerned about is that as you read this, literally thousands of Australian consumers are searching the web for every product you can think of.
And given most overseas retailers provide better service, range, prices, delivery tracking and websites than their Australian counterparts, there’s a strong chance that the sale will go offshore.
Don’t believe me? Then how do you explain that e-tail giant Amazon’s international sales are on par with its US operations? And that a significant component of these have come from right here in Australia?
What I’ve been saying for some time is that if you don’t look after your customers online, your competitors will. And that competitor may not be local. It may be offshore.
And that can’t be good for the Australian economy.
So Mr Harvey, with all due respect, before you go slamming what many believe is the most significant development in retail in the last half century, have a little regard for your smaller counterparts who are tipped to have one of the worst years on record – and need as much help from channels like the internet as they can muster.
And perhaps a little regard for the national account deficit to boot.
Craig Reardon is a leading eBusiness educator and founder and director of independent web services firm The E Team which provide the gamut of ‘pre-built’ website solutions, technologies and services to SMEs in Melbourne and beyond. www.theeteam.com.au
Ross Gerring writes: I was speaking recently with a lady here in Perth WA who emigrated from the UK about a year ago. Over a period of some 20+ years she's held some senior management positions in a variety of industry sectors, including retail. She informed me that in the UK approximately 80% of bricks and mortar retail stores also have online selling capabilities. She was stunned to find that the equivalent figure here in the Australia is about 5%.
Mark writes: I agree, not only Harvey Norman, but majority of big retailers are NOT active in online sales.