Retailers should prepare for Internet challenges

Retailers should prepare for Internet challenges

While there is definitely empathy amongst smaller retailers with Harvey Norman's stance against suppliers who want to sell direct (ARN, April 7, page 1), to some it appears that resistance is futile.

Sasan Rahmani, manager of Adelaide Computer Superstore, said the advent of Internet sales will force all retailers to rethink how they sell and will bring new challenges to the market. He felt big global companies making decisions on whether or not they are going to sell computers on a Web site or to Harvey Norman would probably choose the former.

"Unfortunately, the global vendors are the ones with the power and they are the ones that really dictate how goods are sold," said Rahmani.

"They are going to make a lot more sales on the Net and probably at better margins than they can selling into retail. As retailers, I don't think we have enough clout to tell them how they are going to sell their systems.

"I can see it coming [direct Internet sales] and I have basically taken the attitude that if you can't beat them, then you have to join them. We are taking steps to have a presence on the Internet and will have a site ready shortly.

"When Internet sales come they will take over very quickly," Rahmani concluded. "Just like mobile phones, ATMs and fax machines did. We have to be prepared and that is what I am trying to do for this store."

Ross Whitelaw, general manager of the Leading Edge Computers dealer cooperative, said he has "a lot of sympathy with Harvey Norman's statement". However, he is also making other plans to ensure the continued viability of the group's members in the face of Internet sales.

"Rather than a confrontational role, I think retailers would be better off embracing all the new means of getting product into a customer's hands," said Whitelaw. "We want to develop Web sites with the appropriate e-commerce platforms as well as continue working hard on making the retail stores better.

"It is more to do with evolving the business model to cope with constant new challenges and we are doing that at the moment."

Whitelaw said that while the threat from Internet sales is genuine, he believes that "the physical retail channel will always be stronger in this country than it is in the US or Europe".

"It is a cultural thing, but in some ways every computer that is being sold is giving the customer the tools they need to take their business elsewhere," he said. "That is the challenge that has to be addressed. You have to be the most attractive option for them."

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