Harvey Norman is overhauling its computer game supply chain to support an aggressive play to grow its software business.
The retailer is bidding to become a "Day one" shopping destination for console and PC games, a market which was worth $461 million last year. The franchise chain is also taking steps to remain competitive in a retail landscape dominated by centrally-owned and operated stores, by radically revamping its games software supply chain into a centralised ordering and delivery hub through distribution partner All Interactive Distribution (AID).
If the revamp was successful, Harvey Norman director and general manager of the Computer Division, John Slack-Smith said the company would look at rolling it out across its software business and other categories as well.
"We’re looking to improve the quality of the mix inside stores and improve the velocity [of sales]," he said. Harvey Norman and AID were still trying to iron out the fine print of their logistics deal, AID general manager, Sherard Kingston, said.
The deal had been delayed as Harvey Norman worked to get its games suppliers on board, he said.
"I think they’ll all come over," Kingston said. "It’s up to Harveys to make it happen."
Harvey Norman has been in discussion with games suppliers, including Microsoft, Electronic Arts and Atari, to get them behind its new games offensive. The retailer was understood to have made a pitch promising to consolidate its order and delivery processes through AID in return for more competitive pricing from the games vendors.
AID hoped to be operating Harvey’s new "pick and pack" service by June 30, Kingston said.
Harvey Norman will manage day-to-day orders through its head office. AID will receive Harvey’s orders and despatch to the individual stores.
While the move to centralised ordering was a shake-up for the franchised operation, Slack-Smith said the company wasn’t taking the power away from franchisees.
"We’re making a strong strategic move but we’re not moving away from the franchise model. Stocking quantity and range will still be in the hands of franchise operators," he said.
The pick and pack service would enable the mass merchant to get more proactive about building its software business, Kingston said.
"Retail is all about high stock turns," he said.