Gerry Harvey has entered into the competitive world of group-buying, launching a daily deal shopping site just weeks after announcing plans to head online.
The website, called Harvey Norman Big Buys, offers deals on specific merchandise such as cosmetics, representing a new frontier for the electronics and furniture chain.
The site, operated by eDeal Busters, gives consumers a new deal each day, using countdown times and limited stocks. It also alerts customers to new products as they become available.
Harvey has deviated from his normal stock because he does not want this online offering to directly compete against his offline stores, which are franchise-owned.
Retail expert Grant Arnott, editor of Power Retail, say Big Buys is essentially a testing ground for a real Harvey Norman site yet to come.
“Big Buys will serve as a testbed to help Harvey Norman understand the online customer and what products resonate best online,” Arnott says.
“Harvey Norman has an opportunity to cut out the middleman with its own daily deal model to clear excess inventory.”
“The Big Buys model benefits Harvey Norman by attracting new customers and competing in the daily deals space, which allows them to push hard-to-sell stock out the door in bulk and test what customers want before the full inventory is rolled out to be available online.”
Paul Greenberg, co-founder of online-only retailer DealsDirect, commends Harvey’s efforts, but raises questions about the impact on the Harvey Norman brand as a result of selling products like cosmetics.
“If you’ve only ever bought lounge suites and manchester from Harvey Norman and now you are getting emails offering you make-up, how is that going to go down?” he says.
“I sense in that whole strategy there is something flawed… But I don’t want to disrespect them.”
“I’ve been on the record as saying the big guys need to get online, so at least these guys are getting in the game and it’s a great sign for multichannel retailing in Australia.”
DealsDirect has already been affected by Harvey Norman’s entry into the market, with one of its former buying executives moving across to the new site.
Gabby Leibovich, co-founder of Catch of the Day and Scoopon, says he is unconcerned at the prospect of competing with a high profile rival, arguing Harvey Norman is way behind the market’s well-established players.
“Gerry Harvey has obviously looked at Catch of the Day and sees a very profitable business and a model that works. Now he wants a share of the action,” Leibovich says.
“He’s a late entrant into online retailing and his anti-online stance and lack of understanding as to how to run an eCommerce business does cast shadows on the ongoing viability of the site, but good on him for having a go.”
Meanwhile, a new survey released by daily deal sites Jump On It and LivingSocial, which surveyed 211 merchants who list deals with the sites, shows 69% of respondents rate daily deals sites as the best channel to reach new customers.