In an ever competitive retail environment, big retailers are looking Online to boost sales as e-commerce booms. But where is Harvey Norman?
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Dick Smith saw a sales jump of 6.5 percent in the second half of 2010 on the back of “strong customer trading” with a revamp of both their online and in-stores offering carried out in the last year.
Its refreshed website, which now offers full product ranges for purchase resulted in “strong customer engagement and significant growth,” said Woolworths, owners of both Dick Smith and Big W chain today, describing the customer response as “very pleasing.”
The total sales for consumer electronics in the Australian region at $726m – compared to $710m for the previous half – equating to a rise of 2.3 per cent.
And online is growing fast. By 2015 it is forecast to account for 22 percent of all purchases made.
Big W currently offers 9,000 products for online purchase and almost all products on sale in-store can similarly be purchased online at Dick Smith who “continue to gain significant momentum in this channel”.
The electronics giant’s willingness to change with the times and enormous efforts towards overhauling their service offering, “transitioning to a modern computer electronics business,” has been their great strength in light of fierce competition and heavy price discounting from rivals.
However, one can’t help but wonder if it is Harvey’s Norman’s major weakness.
Woolies has also revamped its flagship store website as well as that of Big W in May and also plans to unleash its top bottle shop Dan Murphy to the web early next year.
It was clear from their statement today that their efforts have been paying dividends although gross margin fell by 1.15 per cent – from 27.50 percent to 26.35. Net profit after tax for the group rose 6 per cent.
Online sales for the group as a whole rose a whopping 75 percent.
“Shopping online has become an increasingly important part of the Woolworths business with strategies developing across all trading divisions,” admitted the retailer as it launching its BigW.com in May last year, which they said was performing well.
In a similar vein, the other major player in the electronic market, JB Hi-Fi reported reported an 8.3% jump in sales and a 16% jump in profits for the last quarter to December 2010, in spite of difficult trading conditions. Online sales grew 35% in the period and the retail giant has continued to expand its online presence.
“Our online sales grew 35% over the half year and were up 49% in December. Whilst a small but growing percentage of JB total sales, the online business is an important part of our overall strategy”.
Despite all the furore late last year and early this year made by Chairman Gerry Harvey over online companies eating into his market share, there was no mention of online going forward or no reassurances about online growth in the statement released today.
He referred only to his stores, saying:
“The primary focus remains in the enhancement of our customer offer while expanding and upgrading our retail complexes.”
This either means there is elephant standing in the corner of management’s office or else expect a major harveynorman.com offensive soon.