Myer who are currently developing a major online operation that will ship goods direct from China to Australian consumers is set to offer free shipping in a move that will put pressure on the likes of JB Hi Fi.ChannelNews has also been told that Harvey Norman is also looking to bypass local distributors for IT and consumer electronic goods. Instead they will source goods in Asia and ship direct to consumers in an effort to make themselves competitive with overseas web sites.
Myer is expected to announce as early as Thursday their free shipping deal when they are also expected to announce a major expansion to their online operation.
Thursday’s announcements will be part of a wider strategic plan aimed at stopping the migration of consumers to internet shopping on overseas web saites.
The Commonwealth Bank recently said that Australians spent $9.5 billion last year on online shopping sites, $4.2 billion of it going overseas to online retailers and the remaining $5.3 billion to domestic retailers.
The SMH said that Myer’s boss, Bernie Brookes, speaking at a function last week, said the switch to free shipping in Australia should boost online turnover for the group without damaging its profitability.
”We do about $5 million a year online,” Mr Brookes said. ”The plan is to increase that closer to $50 million a year very quickly. This is something we have been planning for a while now.
”Obviously free shipping comes at a cost, but we have run the numbers and we believe the model works.”
