Gerry Harvey: Amazon launch a ‘lame duck’

Retailers react to official arrival.

Despite the substantial expectations for Amazon on local turf, Harvey Norman chairman, Gerry Harvey believes the official launch was overhyped, and not to mention, “crazy” in its timing.

“It’s bizarre that Amazon would launch so close to Christmas. If customers order something from them, heads they get it, tails they don’t. If I were them, I would have launched in February or even later, sometime after the busy Christmas period. There has been so much hype from media and retail analysts and now that they have launched, it’s a lame duck,” he told Appliance Retailer.

Harvey also noted that its flagship stores have had a “fantastic run” with a jump in sales over the recent Black Friday and Cyber Monday shopping period. In reporting sales for FY17, Harvey attributed record-breaking results to the successful flagship strategy. Online sales continue to represent a small portion of total sales, he said.

Meanwhile, Winning Group CEO, John Winning told Appliance Retailer that Amazon’s launch is not concerning him as he and his team have been planning for the arrival since the inception of Appliances Online 12 years ago.

“Australia is one of the most difficult continents to deliver in and we have made a significant investment in developing our national logistics network to a point where we have the best bulky good delivery team in Australia.

“With Christmas fast approaching it will make it tough to have stock delivered in time. One of my colleagues this morning went to order a $4.99 water bottle and even though it was in stock, it wouldn’t be delivered until 10th January. Amazon’s three-tier delivery service model is price differentiated based on location, charging as much as $20 for deliveries to remote locations.

“I presume we will see a much stronger Amazon next year and when Amazon Prime becomes available in mid-2018, it will make them a stronger competitor, but it will only give customers a service that we already offer for free; next day delivery,” he said.

Bi-Rite Home Appliances category manager for small appliances, floorcare and AV, Hamza Hussein told Appliance Retailer that it was a fairly underwhelming launch and he was expecting a lot more of an offering.

“Having said that, it may be an unfair statement as Amazon did not state what to expect and still has not said a word to the public. So far it is still everyone within the industry and media who hyped up Amazon’s arrival. My concern is not so much today’s purchasing habits of consumers, but habits in the next 5 to 10 years. It’s a slow burn that should definitely be seen as a threat regardless of first impressions,” he said.

Commenting on Amazon’s launch, Electrical Discounters director, Tom Antonio said, “It’s business as usual. We provide service, knowledge and advice on products and how they will suit individual requirements. When they purchase from any one of our four stores, customers have peace of mind because they are dealing with people they know and trust on the spot. If a refrigerator, washing machine, dishwasher, television, or any other product, breaks down, we are there to service them immediately as we know people cannot go without them, even for one day.”

A Myer spokesperson said the department store is focused on providing its customers with the best possible Christmas experience both in-store and online.

“We will continue to play to our strengths: providing leading brands, experiences and service. These are things that set us apart from our competitors and represent a real point of difference for Myer. As part of the New Myer Strategy we are continuing our focus on building and growing our omni-channel offering, with growth in our online sales of 41% in FY17, on top of strong growth in the prior year.”

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