What Australian Business Must Learn From the Gerry Harvey Fiasco

We should all thank Gerry Harvey for giving us one of the best case studies on online shopping and social media for a long time.

His New Year attack on online shopping was over almost as soon as it began. While there has been a mountain of criticism over Harvey's ill advised campaign, there are lessons from this one act tragedy all Australian businesses to heed.


1: Respect the Customer

Harvey's first mistake was to treat shoppers and the wider public as fools. Telling people to buy goods from his stores where they are 30-40% dearer, rather than buying them online was never going to wash. Even mainstream media could see this was nonsense, and he was deservedly castigated for this.

If shoppers want to save money don't attack them for it, it won't win you any friends or new customers.

If shoppers want to shop online, then make sure you're online store is the one they go to.

Respecting the customer is one of the golden rules of business and marketing. It shouldn't be necessary to restate this rule, but obviously it is as Gerry Harvey was merely the public face of a campaign supported by other Australian retailers.


2: Don't Compete on Price

Harvey's second big mistake was to make the argument about price. Once you start competing on price it's a race to the bottom. The cheapest provider always wins.

This is another one of the golden rules of sales and marketing, and again it's surprising that it needs to be restated.

Given the objective of the campaign was to maintain margins and profitability, making price a major part of the campaign was simply dumb strategy; very dumb.


3: It's About the Experience Not the Price

People shop online because it's easier, more enjoyable, more intimate, less stressful and more rewarding. At every stage the customer is in control of the interaction. It's not solely about price.

Physical bricks and mortar stores can make the shopping experience more enjoyable and intimate, but for the most part they don't. What we usually get is some pimply faced illiterate youth who is desperate to make their commission for the day and sees the customer as a likely source of prey.

Very creepy.

And this is sad, because bricks and mortar stores should have a natural advantage in this area. The fact that a website has more charisma than a shop assistant speaks volumes about the lack of training in many Australian stores.


4: Go Online or Go Home

Harvey's attack on online shopping is symptomatic of the attitude of many of Australia's big retailers. They simply don't get it. They haven't realised that the game changed over a decade ago and that they are already years behind their online competitors.

The Harvey Norman site is a typical example of how the company fails to get online shopping. You can't buy anything from the site; at best it asks you for your postcode and directs you to the nearest physical store.

Huh? If I wanted to go to a physical store I would have done so. If I come to your website it means I more than likely want to shop online.

As I said earlier, if shoppers want to shop online, then respect their wishes, don't try to force them to do something else.

5: Get Social or Get Out

The other big aspect of this story is how quickly social media took control of the campaign away from Gerry Harvey, and turned it into something else that was then picked up by the mainstream media nationwide.

Harvey's initial campaign was aimed at taxing online shopping. Within hours social media had turned that into a raging discussion about how out of touch Harvey and many big Australian retailers were with consumers.

This is a powerful and probably very frightening example to all PR and brand managers about how you no longer have control over your brand or its key messages.

Get it wrong and it can blow up in your face in matter of hours.

Your PR and brand managers need to be tuned into to social media.

6: This is Only the Beginning

While big retailers are still failing to come to terms with online shopping, and other more progressive companies experiment with social media, this is just the start.

Already mobile commerce is demanding our attention. Soon our ovens and fridges will be communicating with our TV's, mobiles and the supermarkets telling us what we need to cook Jamie Oliver's latest 30 minute meal.

The point is consumer technology is progressing rapidly and businesses simply can't afford to stick to outmoded methods and ideas about servicing a customer.


What are your thoughts? What can Australian Retailers learn from this?

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