Harvey Norman reveals its Net strategy

Harvey Norman reveals its Net strategy

Having investigated its options for months, retail battering ram Harvey Norman Holdings has set itself a course to take a share of the online sales it now concedes are "inevitable".

Tony Gattari, general manager, computers and communications at Harvey Norman, said last week that after early resistance at board level, the company had created another franchise for its online development. This keeps online development in line with the franchise model that has been very successful for the company.

"We won't be the first retailer on the Internet, but we are now building a strategy from scratch and from a retailer's perspective," Gattari said.

Former Harvey Norman computer franchisee Richard Eastmead has relinquished his Osborne Park (WA) operation and will move to Sydney to join Gattari at head office developing the Web site.

Having closed its original Web site at the beginning of May because it wasn't attracting enough traffic, Gattari said the new Web initiative was to be developed in three stages.

First, they will put up a new site with all the "bells and whistles" that consumers expect. "This will be specifically aimed at driving customers towards our existing infrastructure," Gattari said.

The second stage will be to enable e-commerce functionality, allowing consumers to purchase over the Net with Eastmead owning the franchise for those sales. It is expected to be in place by the end of the year.

"Web sales will be driven totally by him [Eastmead] with the same accountability, responsibility, and authority all other franchisees operate under. We are effectively making a new profit centre for the company," Gattari said.

"The third step will be to use the incredible marketing power of Harvey Norman to create a portal," he added. "Down the track we can see the poss- ibility of not only having Harvey Norman sales at the site but also other non-competing retailers."

Gattari said that in the same way AOL is giving away introductory free Internet access on CDs, Harvey Norman has 87 stores nationally from which it can issue CDs that give Internet access from its portal.

Initially the site will be set up to sell the computers and communications product range, but Gattari said the development will eventually be for all divisions of the company.

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