Harvey Norman GM wants to own digital consumer

By Matthew Henry

HUNTER VALLEY: In a panel discussion at the Influence 2006 conference in the Hunter Valley this morning, Harvey Norman general manager – computers, Rutland Smith, said servicing customers and training staff is the key to the future of selling digital entertainment.

Flanked by digital sages from companies including Microsoft and Legend, Smith dissented from the pack and said there are few certainties in the rapidly evolving digital entertainment market of music and video downloads.

“I don’t have all the answers, I don’t know where it is all going. Are we going to be tied into Apple iTunes, or using Vista or Viiv? Are we going to be using something we have never heard of? I don’t know, but over the next five to 10 years, the one thing I do know is that entertainment technology will be digital. We might have music download kiosks in retail stores for all those old fashioned customer who like to speak to a person when they buy; we don’t know exactly where it is going. The key is that digital is where Harvey Norman will be positioning itself,” said Smith.

Despite the success of online models like the iTunes Music Store, Smith said there will always be a demand for good customer service and retailers who can win the trust of consumers in the  confusing world of converged technologies will be the ones who survive.

“Our challenge is that we have 2000 staff, some of them are 10 year veterans and some are 16 year olds starting today. So we train them, and we have a franchise model so the franchisee gets paid on the basis of how succesful his store is.

“All around the world in all the different regions we operate in, we are seeing different trends but the same message: the customer wants someone to uncomplicate it for them, someone they can trust who can help them through it,” he said.

Smith admitted that Harvey Norman’s current online retail offering is ‘an embarrasment’, but pointed to the new Channel Go online music store partnership with Destra Music as an example of the company’s commitment to developing online retailing in the coming years.

Smith also speculated on how online content and convergence will affect Harvey Norman in the long term.

“In five years we’ll need to be selling more digital content. There will be more convergence and it may be that we have to seperate out our whitegoods and small appliances and merge our consumer electronics and computers business, but I don’t know,” he said.

The franchise model was pointed to as a continuing source of competitive advantage for Harvey Norman, because individual proprietors are personally responsible for building trust in the local community and have the flexibility to stay relevant to their customers.

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