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Harvey Norman latest giant to get online

By Michelle Hammond
Wednesday, 30 March 2011

Retail giant Harvey Norman has announced it will launch an online retail store within weeks, suggesting smaller retailers are under threat as the market becomes more crowded.

 

Harvey Norman executive chairman Gerry Harvey has been a vocal opponent of online retail for years, particularly the supposed "threat" of overseas websites.

 

However, Harvey said he has no choice but to "cannibalise" the company's 173 stores, voicing concern as to whether the company will make any real profit out of it.

 

"By this time next year, you'll see Harvey Norman with a pretty sizeable internet presence. My heart's beating very strong on whether we make any money," Harvey says.

 

Harvey Norman's current online presence is limited to a catalogue-style website featuring products, prices and information but no transaction facility.

 

The company will follow in the footsteps of department store Myer, which launched a China-based retail site earlier this month called myfind.com, allowing Australian customers to shop GST-free.

 

Both retailers are hoping to claw back some competition from overseas websites, which are not required to charge GST for purchases under $1,000.

 

According to Harvey, his company has been the "pace-setter for an awful long time", suggesting the move online is a strategic one rather than an act of desperation.

 

"They're kicking us on the internet at the moment but there's no history of anyone making money on it. I'm not against it – I'm trying to get on at the right time," Harvey said.

 

Forrester Research expects sales by Australian-based websites to soar to more than $33 billion by 2015 from $16.9 billion last year, posing a threat for traditional retailers.

 

Meanwhile, a recent Nielsen Netview report reveals the top 10 most popular sites for Australian shoppers, with the list dominated by major retailers.

 

According to the report, the most popular site for Australian shoppers is eBay, followed by Amazon, Woolworths, JB Hi-Fi and DealsDirect.

 

Rounding out the top 10 are Big W, VistaPrint, Dick Smith, Officeworks and Kmart. The revelation follows claims made by large traditional retailers that overseas online retailers are hurting their sales.

 

The traffic also shows that many bricks-and-mortar retailers have successfully expanded their operations into the online realm and are reaping the rewards.

 

Nielsen Online analytics director Mark Higginson says the growth of large brands has been one of the biggest trends over the past year.

 

"We've seen massive growth in online, and the mainstream retailers have gotten to a point where there is so much going on they can't ignore it... It's suddenly a huge business model," he says.

 

Steven Noble of Forrester Research says despite the recent onslaught of large companies going online, the smaller companies are getting most of the money.

 

"Certainly a number of larger and more traditional retailers have come online recently, or will do so in the near future, and they are taking a share of online sales," he says.

 

"They will continue to do that but, at the same time, overall online sales are growing rapidly and the pie is getting larger."

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