Speaking after his recent AGM, Harvey Norman was notably pessimistic compared to previous years “If I get last years figures this year, I will be delighted and I’ve never said that in living memory.” Why so? Discounting in the flatscreen TV market, loss of consumer confidence after the latest interest rate increase, and online shopping.
The plight of Harvey Norman Retail this Christmas reflects some interesting things about both conventional and online media, and consumer reactions to it.
Offline media – Radio and TV – drives the agenda on consumer confidence with its pervasive and invasive presence in our private spaces. As a man who built an empire on clever media-buying, Harvey Norman should know. “It (reportage on interest rate increases) was never ending… it was in the media, on the TV, newspaper, everywhere, and it was intense – you have to expect a consumer loss of confidence. It had to happen.” Oh well – a story is a story, even if it bites. The thing is – nothing in the online world has anything like this power when it comes to influencing thousands of consumers deciding what to buy for Christmas….
No doubt offline media giving airtime to Harvey Norman speaking out about online shopping as a “major threat” will drive more people to check out online shopping than ever before! “Now it is exploding – if you think it is big now have a look down the track and see how big it is – and see then if government then can say it is not a problem,” says Mr Norman.
So – overseas online shopping is GST free. That’s a nice 10% discount for a start, but I somehow don’t think that will be worth the postage on my new flatscreen TV. In the areas of concern for the Balance Blog, does online shopping stack up?
Sport Shoes
Why is it that everyone is talking about buying their gym shoes on line? You have the inconvenience of waiting for what you’ve purchased, and fit is VERY IMPORTANT. The success of online retailers is almost counter-intuitive, but here’s why they’re winning – if you are a regular runner you really need to update every 6 months or so @ $250 a pair, and once you’ve done a few fits you already know your “habit shoe”, and if you can get that from the USA for about $140 why wouldn’t you? Then again, if you can get it from an Australian online retailer for much the same cheap price, with fewer risks, and less postage, then why wouldn’t you? Some Australian footwear retailers have cottoned on to this, but more need to deal themselves in.
Athletic Wear
If you are in to fitness gym gear is one of the major spend items. Most of new-to-gym types have fallen in love with the high-value quality stuff – running tops that wick, yoga pants that look cool. So – why so little online? We asked around and it seems only Lorna Jane and Rebel have something good to offer in an online store. Why? Because Offline Retail has firmly established its ground — ask women who buy a lot of gear and you’ll hear all the conventional offline retailers — Target, Kmart, etc. Nobody knows the brands but they offer good stuff for a great price and you don’t have to sit around figuring out what your size is in the USA. (BTW if you’re a lulu lemon fan – check out lululemon.com while the $A is still around parity with $USA – those fabulous tank tops with in-built bra are all $52, and at present freight is free!)
Vitamins and Supplements
This is a mature market with 20 or 30 decent sized Australian businesses vying for your attention, mostly selling Australian brands. We chose to look at a Blackmores product for being one of the better brands and having a pervasive online, offline and all-retail presence:
• At vitaminwarehouse.com.au – Blackmores Fish Oil 1000 (400 caps) $26.82 (marked down from $38.95) + $9.70 postage – Total: $36.92, or 9.1c/capsule
• At ePharmacy.com,au – Blackmores Fish Oil 1000 (400 caps) $24.99 (marked down form $38.95) + $5.50 postage – Total: $30.49, or 7.6c/capsule
• At VitaminKing.com.au – Blackmores 1000 (200 tablets) $12.50 plus postage $6.50 (incl 1.73 gst) – Total: $19, or 9.5c/capsule
• At the newly health–conscious oo.com.au – Blackmores Fish Oil 1000 (200 caps) $13.95 plus +$6 flat rate postage (same price even if you order bulk) – Total: $19.95, or 9.9c/capsule
• At Discountvitaminsexpress.com.au – Blackmores 1000 (200 caps) $16.87 incl gst (reduced from $20.45) + $9.90 postage – Total: $26.77, or 13.3c/capsule
• Standard RRP $38.95 for 400 – that’s about 9.7c/capsule.
Obviously if you are one of those high-value $150 per order customers you’re probably doing a bit better on the postage with online retail.
In the Health space does online shopping really stack up? For the Dark Mistress it is a convenience thing – if I get a price discount then that’s a nice bonus.
The more time-poor you are the less time you actually want to spend on shopping – surely there is a message in this for retailers; work out if your item is essential or discretionary and for whom and work from there. The shopping centre offers the chance of a quick convenient whip-around if only it wasn’t for the 15 minutes spent trying to find a park. The village mall accessed on foot is both de-stressing and good on value if you are lucky enough to have one. Online is great for out-of-hours access, is good if you are experienced with the goods you are buying. All three might offer some random price benefit at the time you’re looking. Price checking is simple online, unless you account for the time spent doing it, and if you did, you probably wouldn’t bother.
The shopping experience online is entirely different… functional you might say. No doubt the Online retailers will win this Christmas, but price alone is unlikely to be the reason… more likely consumer curiosity whipped up by offline media.
Yours,
The Dark Mistress Of Denial
The Balance Blog – A reflection on virtual life versus embodied life; ostensibly finding sunshine, holistic fitness, natural weight-loss and stress relief for an obsessed workaholic screen addict, with the occasional dig at the World Wide Web.
