Gerry capitulation

Two weeks ago the well informed crew at Boganomics made the following statement.

Just this morning, a stone tablet arrived on Gerry Harvey’s desk, informing him of both MyFind’s effort, and the dotcom crash of 1999. “Two sets of bad news for the broadbands”, mused Gerry. But if, by some miracle, the internet manages to survive these two disasters, the other members of the Retail Coalition can be expected to reluctantly join Myer online.

Well, just like all the bloggers on this site they are ahead of the trends. From the news today.

Retail giant Harvey Norman will launch an online retail store within weeks, executive chairman Gerry Harvey says.

Mr Harvey, who has spearheaded a campaign by major retailers for the GST to be applied to overseas online purchases, said the time was right to go online even though it would steal sales away from his bricks and mortar stores, the Herald Sun reported.

The retailer has 173 stores nationally. However, it runs only a catalogue-style website which lists products, prices and information but has no transaction facility.

“By this time next year you’ll see Harvey Norman with a pretty sizeable internet presence. My heart’s beating very strongly on whether we make any money out of it,” Mr Harvey said. “I haven’t got any choice. I’ve got to cannibalise our stores.”

Harvey Norman’s move follows close on the heels of department chain Myer, which launched a China-based retail website this month called myfind.com, allowing Australian customers to shop GST-free.

However the Myer site has a limited range and does not compete with the variety of brands in-house.

Both retailers expect to draw back some competition from foreign sites that don’t have to charge GST for purchases under $1000.

“Harvey Norman has been the pace-setter for an awful long time,” Mr Harvey said. “They’re kicking us on the internet at the moment but there’s no history of anyone making money on it.

What? There is no history of anyone making money from the internet ? Really?

I get the feeling it is time for some “younger” blood at the top of some of the Australian retail empires.

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Comments

  1. Amen to that. Could this be a generational thing – the Boomers just not grasping the impact of the internet on younger consumers? Or did the Dotcom crash create a false impression that internet retail was a flash in the pan?
    Either way, the days of over-charging for commodity products (especially consumer electronics) are numbered.

    • I think it’s a generational thing. Just look at the fact that we are still having a discussion about the need for a national broadband network!

      It’s like saying ‘we don’t need telephones’ back in the days when they rolled out that network to every nook and cranny of the continent.

  2. To identify myself as someone from the digital age: ROFL!

    Mr Harvey has to do some research methinks. Adding a payment facility to a website does not make a popular store. The internet forces companies to be innovative, manage the supply chain, source products well and increase efficiency and customer focus. I doubt Myer and Harvey Norman will get that one right. The corporate culture just doesn’t seem right and I have yet to see a company successfully make the jump from highstreet to internet.

  3. I recall very similar comments by Gerry Harvey 10 years ago… that’s why it is such a disgrace that he was calling for Government protection of his outdated business model… it’s not like it’s the late 90s anymore, and the blokes on the footie show joke about “triple W, what!”… Jeez, even Fattie Vautin is on twitter these days…

      • “…TRS-80”, ROFL!

        You’d also remember that popular Australian song of the 70s, “Rack off Normy, you and your mates”. It is becoming Harvey Norman’s theme song.

        Gerry just may be computo-phobic, after all the FORTRAN-4 punch cards would be enough to scare anyone way from computers.

        • Nothing wrong with FORTRAN IV – at least you only had to read through the ONE volume to be able to write useful code. Fast forward to FORTRAN 77 and you’re looking at the Encyclopaedia Britannica of “User Manuals”, and STILL you’ve got to remember to use the right letter for real and integer variables. Add on the intricacies of lib calls(and plain bloody-mindedness of the ICL 2960 compiler suite), and it’s a wonder I was still (borderline) sane when I completed my first Degree. Could explain why the Computing Centre staff were, well, “rather strange”, in a very nice way . . . . ! !

      • DE, we could probably guess your age from this reference alone…

        Lovely piece of tech wasn’t it?

        Who could ever have imagined what was to come back then?

  4. FrankieFourFingers

    Gerry is protecting his retail franchisees by taking even more business away from them….got it.

    • Apparently, when you make a purchase from Gerry’s online store, some of the revenue is paid to your local bricks-and-mortar Harvey Norman outlet, even though you never set foot inside it, so its hard to see how he will compete online.

      From this I conclude that Gerry must have a pretty low opinion of the public, since he thinks we are too stupid to look at a few numbers and see which one is lowest..

  5. G ERR Y ,CAP IT,UL,wait for infl..ATION..
    Please ,In the meantime ‘Fasten your Set-belts ,and visit my new web-site ,while weighting..

    cheers Harvey…JR

  6. How many small, locally run family electrical retail shops has Harvey Norman put out of business.
    And we are all suppose to feel sorry for Jerry when his business loses money and prop him up with stimulas money.

    • That, my good man, is the key.

      If I was paying an extra few bucks to locally owned family businesses on tight margins, sure.

      Him and Sol Lew’s crappola outlets are on my ‘never give business to’ list.

    • As I see it the injustice is that on-line retailers use the bricks and mortar shops as their shop fronts for free.
      The manufacturers will eventually wake up to this – and who knows may at some point actually pay the Harvey Normans of this world rent so that they can display their wares. This already happens in Dan Murphys.
      We are in a transition period and these are always difficult periods to navigate.

  7. Is Gerry going to run the site out of China or not? He won’t get the $1000 tariff-in-reverse if he runs it domestically.

    When you think about it Gerry runs a pretty fantastic service. You can go into one of his stores, touch and feel the products you’re thinking of buying, ask the pimply sales guy all kinds of questions, then p*ss off home and buy the same product for 20% less and GST free!

    God help Australia. We can’t even do retail now.

    • 20%?

      I saw a camera in a store last month for $1800. Bought it with a bonus zoom lens online for $700 (Australian outlet).

      If you aren’t doing 30%, you need surfing training.

      If its not inflated margins its inflated store leases (back to property!!). Empty stores should see that right.

      Then we get to Mega gougers like Frank Lowy of Westfield.

      O’ what a tangled web!

      • Bought a wide angle converter lens this week. Cheapest find on shopbot: AUD 350. Cheapest on eBay: USD 170 (and bulk transport is no doubt cheaper than me using US Post..)

        It’s great to see people be smart consumers. Best thing that could have happened to the Aussie economy.

        The internet really means a shift in power from government to people and from business to consumer.

      • Yeah, I think there is a lot of price gouging in Australia on almost everything, (has been that way for a long time) If it’s not the retailer, it’s the importer or wholesaler, and even sometimes the manufacturer who stiffs us on price. The internet is laying this bare for us all to see.

        Inflated rents is another good point, and another possible reason for high Australian instore prices. My understanding of HN is that it’s a franchise operation where Gerry owns the name and the physical stores they operate out of, so if he’s charging too much rent that obviously impacts on the price the franchisees have to charge.

  8. I’m just absolutely gobsmacked that Harvey Norman is still around. They are sooooo over priced, for absolutely everything!!

    I’ve been in there and saw a webcam for $20 (on special down from $49), thought wow it must be some kind of runout and might actually be worth buying. Then I go home, saw on CPL’s website same camera $9 NOT on a run out special!!

    I’m so sick of the gouging that happens in this country, here are another few recent examples:

    Wifes camera flash broke, parts from AU parts supplier (recommended by Canon themselves) $110, ordered from equivalent US mob for $50 (both prices including postage)

    Recently 1 laptop hinge broke, anywhere from Australia I couldn’t get it less than $70 (including ebay!). Ordered from Chinese ebay seller for $40 for both left and right hinge (both prices including postage).

    Tesla motors is about to put their roadster on sale, for about $200,000AUD here. US $110,000.

    Frankly, if this is how expensive things are I will always order from overseas, and Gerry Harvey can go get stuffed, NEVER going to buy anything from his stores. Even the specials are a ripoff! Are people so dumb they can’t see this? Why hasn’t he gone out of business???

    • Last time I purchased anything from Harvey Norman was in the 90’s, never went back after their pathetic support staff made a meal of attempting to fix a printer. I had to take it back no less than 6 times.

      Gerry, good riddance!