Why Harvey Norman Is Heading For A Massive Fall

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The decision by Gerry Harvey the CEO of Harvey Norman along with Myer David Jones and 18 other mass market retailers, to initiate a marketing campaign aimed trying to convince the Federal Government to slap a 10% GST on Internet purchases made from overseas web sites smacks of failure.

Let’s face it Gerry Harvey has made billions by building a perception that he is a stack them high sell them low retailer. The only problem is that a lot of his products are expensive and when compared to what price consumers can buy the same goods online today, very expensive.

Norman, like a lot of Australian retailers has totally ignored or deliberately chose to not invest in an online selling operation, now he is set to pay for his online ignorance as thousnds of his customers move online to shop.
 
I am writing this story sitting in the lounge at LA airport on my way to the CES Show in Las Vegas and have just seen one consumer purchase an iPod, cables and cover from a kiosk in the airport and while sitting in the lounge I saw two women spent their time between flights ordering goods online for delivery to their hotel in Las Vegas.

In the USA online retailing is fast becoming a way of life, it’s easy and convenient and has resulted in retailers building out online shopping sites that are rich in technology spanning visual display of goods, security and transaction technology. They remember customers and prompt them on sizes and their last purchase.Its called service and customer benefits.

Gerry Harvey deserves to fail in the next retail world for the simple reason that Gerry Harvey is only interested in what’s good for Gerry Harvey and the Harvey Norman group of Companies than what’s good and above all convenient for his customers.

All you have to do is walk into a Harvey Norman store to realise just how far they are behind. There is no data capture of customer details, no Harvey Norman club or incentive programs that deliver repeat business benefits to their customers.

In fact I suspect that Harvey Norman would not know one customer from the next unless they have purchased an extended warranty or they have got hold of a vendors warranty database. Above all there is no web site and this has nothing to do with cost but a lot to do with a tired old retailing model that is built around stuffing consumers into retail stores to make a purchase.

 

 

The retail consortium that is currently lobbying the Federal Government is in for a walloping as the more they highlight the convenience of online the more consumers are going to experiment with purchasing online.

Consumer advocate Choice accused the retailers, who have warned that Australian jobs are at risk as a result of unfair competition from offshore players selling tax-free, of engaging in an alarmist campaign motivated by self-interest.

The Australian said this morning “The big chains should recognise that it’s their high prices, limited range and poor customer service that increasingly encourage people to use the internet,” Choice campaign director Christopher Zinn said.

Consumers are not stupid and the more they realise that the very same goods they buy at their local retailer are cheaper online and that packages arrive on time and in pristine condition the more they are set to engage in online shopping.

Right now retailers would do better for their bottom line and their customers if they actually took online retail head on started investing in the latest database technology HTML 5 coding that allows for sexy presentations of goods and services.

But above all, the likes of Harvey Norman need to wake up to customer service and the importance of collecting consumer data that allows them to deliver a better customer experience both online and in store.

  Independent senator Nick Xenophon described the campaign as “It’s like watching Goliath pretend he’s David.”

 

 

Myer chief executive Bernie Brookes appears to be unperturbed by the negative reaction to the campaign.

“I didn’t expect anything different – any time you go against the consumer by suggesting they should pay more, you can expect to feel their wrath,” he said.

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