Harvey Norman launch online store, but will it work?

With very little fanfare Harvey Norman launched their online store today.

So how has Harvey Norman delivered a competitive proposition to the market and reconciled it’s traditional sales model, traditional costs and it’s need to drive customers in-store.

Quite well it seems, here are some examples. An iPad 2 16GB with Wi-Fi is a sharp $553 compared to $579 at Apple Store. A Sony DCR-SX65S Camcorder is $298 at Top Buy, but only $246 at Harvey Norman Online…and the examples kept coming.

Whoever Mr Harvey begrudgingly gave the nod to has done a really impressive job from an SEO perspective with well thought out page headers easy navigation and what looks like a full product range.

Now don’t forget Harvey Norman’s previous foray into the online marketplace with the thoroughly disappointing Harvey Norman Big Buys. It now seems to have emerged as something of an online small goods site with good pricing and a range that I buy regularly and might actually be tempted to try.

The new Harvey Norman site ticks a lot of boxes for me. Technically, it’s a great job, so hats off to the IT guys who are involved.

I feared that the relationship between online customers and geographical franchises would be lost, but the delivery from stores solves that and we’ll see the online strategy be supported by stores instead of seeing the website as a competitor.

The in store pick-up option will work for many people who know what they want a fast check out. I just hope that some kind of stock control exists and that orders are set aside in an easy to find location in store, otherwise there’s really no point.

Delivery is excellent, but are we to believe that at any point in time any given product listed on the site will be available from a local store for delivery or pick-up. The reality is that many online orders will require a stock transfer and fast delivery or pickup may not be possible.

This is of course unless the aforementioned IT guys have done a large scale real time product integration and fulfilment system. But I don’t think so considering that the delivery policy states that “ the store will contact you directly to confirm when your order will be ready to pick up”…I would have assumed that it was already available if it was available for sale.

All in all, well done to Harvey Norman.

And here comes the ‘but’.

How resiliant really is this online business when you consider that in the fundamentals of Harvey Norman’s are to drive customers in store and sell them on instant gratification, range, service, and lucrative finance.

The move online could just be an exercise in educating existing customers about the merits of online buying, then the natural tendancy to price comparison, and this is where the Harvey Norman online model may fall over.

The major cost savings of a scaled online venture are the savings in rental costs as expensive retail locations are not needed and that staff are only required when orders need to be packed and shipped. Customer service online can respond a few minutes later as they efficiently deal with many enquiries and down time can be used to ship orders, not so on the retail floor.

These are the glaring differences between traditional retail and online stores. They are inescapable and I fear that after such an inspiring response to the criticism Mr Harvey has copped, the commendable implementation may not be enough to make it a massive success.