Two separate sources, one internal and the other a major supplier to Harvey Norman has said that the retailer has witnessed a major slump in consumer electronic and IT sales during the past 18 months as JB Hi Fi sales soar and Dick Smith moves to strip customers away from the struggling retail group.
According to sources sales of technology linked products have fallen from $1.2B to sub $900M as younger consumers move to shop at JB Hi Fi and Dick Smith.
Recently research group Global Reviews released a report analysing the experiences of Australians looking to buy 46-55-inch televisions. Researchers discovered that JB Hi-Fi is the most preferred retailer. The report said that Harvey Norman was having a hard time holding onto online customers, with the majority defecting to other retailers as opposed to Harvey Norman”.
A major supplier to Harvey Norman told ChannelNews at CES 2014 that older consumers who in the past had spent money at Harvey Norman were now moving to retirement age and spending less.
They said “Their kids who want the latest gadgets see Harvey Norman as an old fashioned store where, their parents use to shop, this is not where they want to shop which is why JB hi Fi has moved into appliances as well as expanded the CE offerings. They are getting both the store and online business that Harvey Norman would love to have”.
“The next problem for Harvey Norman is that Dick Smith is expanding and they also are starting to strip business away from the retailer, they are also planning to move into trendy appliances”.
The Global Reviews survey found that JB Hi-Fi was the dominant choice, topping the survey in all stages of TV research. 49 per cent of respondents visited JB Hi-Fi online, of which 68 per cent shortlisted the store. 33 per cent of all those surveyed selected JB Hi-Fi as their preferred brand. This was due to a combination of having purchased from them before (52%) and a perception of having the best prices (48%).
Despite getting an online visit from consumers when it came to actual TV purchases, the results for Harvey Norman plummeted, with just 17 per cent of those surveyed electing it as their preferred brand.
More than half of customers who shortlisted Harvey Norman ultimately decided to shop elsewhere.
Most of the customers who did choose Harvey Norman based their decision on it being a brand they could trust, rather than price with indications that this consumer was 55+.
Yesterday we revealed that Harvey Norman is secretly developing its own branded electronics range, the move comes as research shows that there is a global move away from house branded goods to branded products, especially brands the consumers knows and trusts.
The retailer is said to be working with at least one major distributor, which is Australian-based, on the project. No other details are available but it is believed the Harvey Norman label could be launched later this year, sold at its franchisees.
It is not clear what the ‘Harvey Norman’ own brand range could include, but could potentially be anything from audio, accessories and speakers to TV’s. The retailer was not available for comment at the time of writing.
