Gerry Harvey scales back online sales targets – here are three ways to improve his offering

Harvey Norman founder Gerry Harvey says the department store has drastically reduced its forecasts for online shopping sales, saying he overestimated just how lucrative the online market would be.

Harvey announced on the weekend he would reduce the company’s targets for online sales from 5% within two years, to somewhere between 1-2%.

”We’re happy with our presence, we’re happy with our site, we’re not happy with our sales,” Harvey said. ”When we set up the online transactional site a couple of months back, we saw it being about 5% of our turnover, but at the moment it’s not going up at all, it’s still sitting at about 0.5 of 1%.”

It’s a disappointing turn of events for the company, which managed to debut a fairly web-savvy online sales portal last year.

But could Harvey be too hasty? Telsyte senior research manager Sam Yip says the retail veteran may be bowing out too early, although he says online sales can be complicated for a national franchise.

“He’s not just playing online here, he’s playing in the franchising space, which is a completely separate game. From the research we have, and the trends we see, more shopping is going online and there is a franchise system within all that,” he says.

Certainly there are other businesses that have keen predictions for online sales – Specialty Fashion Group wants a ratio of 15% within three years.

Here at SmartCompany we think Harvey could be on to a good thing with his online sales. So here are three ways we think Harvey Norman could improve its online sales and reach those targets within two years.

1. Emphasise the deals

There has been a clear trend over the last few years towards discounts and deals – the rise of the entire group buying industry is evidence enough. But perhaps Harvey could be doing more to tie his website to these types of deals.

“The online retail landscape is primarily focused around discount offers right now,” Yip says. “You’ve got group buying, online deals and discounts. It’s not just around strictly shopping.”

Harvey Norman has taken a few good steps in this direction, with its discount site and deals presented on the main page. But perhaps if they were shown off a bit more, and these deals presented more across the company’s entire social networking presence, it could see a bump in sales.

And speaking of social networking: it needs more attention. Put Twitter feeds on the front page, keep the Facebook activity hot, and it’ll definitely perk up sales.

2. Reduce the shipping times

We ran a story back in November when the Harvey Norman store launched about five things we liked about the store, and five things we didn’t. One of those we didn’t like was shipping.

It simply takes too long and is too expensive. Keeping free shipping for small items would be a big plus, especially with the company’s newest direct import site for games. Why would consumers pay for shipping when they can get the same product delivered for free at another site?

3. Give the website a redesign

The Harvey Norman site isn’t particularly bad, but it’s not the best we’ve ever seen – design wise, it could do with a fix-up.

The design is a little sparse, but not necessarily clean or sophisticated – it looks like the designer has used a simple template and let the content update itself.

Apart from the photo flicker there’s barely any new content, and it’s certainly not colourful. A redesign could make the site more welcoming and exciting.

The site details are all spot on – allowing users to check for stock within their local area is a great addition. But the user experience and design needs to be upgraded – and there are plenty of SmartCompany readers in the design space who would be willing to offer their services.


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