Gerry Harvey swallows pride, launches online store

“Online people do not make any money. The whole world was conned with online retailing… it’s a con, a complete con. Sure, it has a future, but the problem is it costs a lot of money to do it properly. There’s an awful lot trying though. If you said to me in 50 years will people be successful, then yeah, but mostly not now,” said Gerry Harvey, in 2008.

Yesterday (November 23, 2011), Harvey Norman launched its online store. The ecommerce platform allows consumers to review products, leave comments and compare products. Customers can collect their purchase in-store or pay for home delivery at a cost between $6 and $200 depending on the item. Harvey Norman has 195 franchised outlets nationally.

The ecommerce launch follows Harvey’s spearheading a campaign with a coalition of Australian retailers attacking the GST exemption enjoyed by international ecommerce businesses on items costing under $1000.

The launch comes amid another Kyle Sandilands scandal, with consumers bombarding the Harvey Norman Facebook page in disapproval.

Meanwhile, online retailer Kogan Australia tells Marketing it’s not worried by Harvey Norman’s foray into the online space: “Price is key in the online world. Any customer can quickly compare the prices and specifications of all available products. If Mr Harvey is simply trying to offer his bricks and mortar prices to online customers, then we shouldn’t hold our breath waiting for them to start biting,” says David Shafer, executive director.

And Shafer suggests Harvey Norman’s entire business model is a barrier to it doing well online: “There is, and will always be, a perpetual tension in Harvey Norman’s business. Does Mr Harvey price his products to compete in the online world or the bricks and mortar world? … If Harvey really wants to start competing with online players then prices need to come down in the online store. But in order to access the real efficiencies inherent in ecommerce, this will necessarily mean the online store would need to become a ‘warehouse direct’ rather than ‘pick up in store’ model. This would cut out Harvey’s franchisees from his operation.”

  • Paul

    Harvey Norman made a profit of $252 + Million dollars last financial year and (stock code: HVN)’s revenue was something like $2.7 Billion dollars.

    Where as, Kogan probably has a turnover of circa $5-10 Million, with a profit of $1.

    So I’m unsure why such a quality news source, like marketingmag would use a quote from someone like them?

    Shouldn’t you at least compare apples to apples, instead comparing ripe bananas to sultanas.

    Get quotes from someone like JB Hi-Fi, Appliances Online or Bing Lee or any of the other leading ecommerce stores.

    … So in saying that – why would Gerry Harvey and ‘co, give a ____ about what Kogan has to say and why does marketingmag think anyone else would be interested either?

    Incidently …

    If Harvey’s or JB Hi-Fi wanted to put Kogan out of business, he’d be ou, before he could blink.

    The general consensus is that Harvey’s and JB Hi-Fi are actually letting Kogan run his mouth and educate people that “buying tv’s online is easy and cheap..” because it’s in their financial interests for him to do so.

    JB HI-FI and Harvey would have to invest mega bucks to educate people about buying TV’s online, so instead they’ll just happily let Kogan put in all the hard work for them, get consumer’s buying online and and then gobble him up when they’re ready.

    – Paul.