Harvey Norman to go the way of the dinosaur?
Recently, I read an article in The Age about online retailers who are winning over traditional mass merchant retailers. There was a comment in the article made by Paul Greenberg from Deals Direct “All dinosaurs risk extinction”. I thought that was a great way to describe not just the mass merchants (in Australia) but retail (in Australia) in general.
Mass merchants and specialist retailers lose sales (by the second) and continue to comment on how tough the market is. Not true! Buyers have used this excuse for centuries and it’s time they had a reality check. According to this article, online spending grew 12 percent in Australia in 2010 and traditional retail spending declined, wake up people! Wake up!
Most of the people that work for major retailers have very little knowledge of online retailing and the infrastructures required to make it a success. Not to mention how social media fits into the global strategy. The CEO or MD shouldn’t be responsible for designing a strategy or making ‘the’ decision to create an online store – it should be a team effort, including the buying, product management and marketing team that create a case and present it to the directors to get the buy in.
I agree with Paul’s comment (above) but Gerry Harvey has other interests in his life and creating and investing in an online store is the last thing on his to do list, especially if it is unfamiliar territory. The Sydney Morning Herald mentioned that “Harvey Norman appears to be trying to retain its profitability from the status quo rather than embracing change”. However, retailers like Myer are embracing the change and are starting to tap into the online space (ecommerce and social media) and are obviously reaping some rewards. Myer could be doing a lot more especially when you consider overseas competition like Saks.com who deliver to Australia. I am a customer of Saks. Myer should be concerned about customers like me who are happy to purchase (American brands) items online and have them delivered to my office. They are much cheaper and I get the brands that I want, not to mention the experience.
What puzzles me is – do these mass merchants invest in researching their customers and understand where their customers hang out online and what their typical buying behaviour looks like?
There are many new online retailers coming to life everyday. Good luck to the guys at Catch of the Day and Deals Direct. At some point the major retailers will have to stop and smell the roses and have a look at what is going on around them. There is another way to sell to consumers, and the 90s are gone. The world has changed and is changing.