Editorial

Modern Retailing Leadership Lessons from Gerry Harvey

What not to do as chairman and founder - Gerry Harvey

According to Gerry Harvey, online retail is all about “spin and bullshit” for big retailers. But if what he’s saying is true, isn’t Harvey cutting off his nose to spite his face?

Last week, Australia’s favourite retail personality, Chairman and Founder of Harvey Norman, Gerry Harvey, stepped into the media limelight once again in order to have his say about the ‘realities’ of online retail.

To recap: Harvey – an expert on the topic of all things online – heads up the retail furniture and electronics franchise, Harvey Norman, which has put its name to dozens of stores, both locally and internationally. Harvey Norman also lays claim to a number of serious profit revisions, which have been announced in the past few weeks.

Harvey Norman has posted a 31.6 percent drop in profit, decreasing to $172.47 million for the past financial year. As a result, 2013 isn’t looking as bright as it once had for the retailer.

However, Gerry Harvey has bigger fish to fry.

With struggling franchisees to consider, a weakening business model and a slew of new retail technologies all putting the pressure on, Harvey’s primary concern is being labelled “a dinosaur”.

You see, Harvey couldn’t be bothered with all the “spin and bullshit” of online retail if it weren’t for his public image, which must remain hip and “with-it” at all times.

“I am reluctant to do it but I do it, because if I don’t they label me a dinosaur. I’m out there labelled as a bloody dinosaur,” Harvey told BusinessDay.

ROAR!

Gerry Harvey's public image is more important to him than his business.

Gerry Harvey’s greatest fear is realised, “I’m out there labelled as a bloody dinosaur”.

What really grinds Gerry’s gears, is that after all the hard effort he’s put in to developing an omnichannel (“bullshit”) strategy, “the result is that it is 1 percent of [his] sales”.

In the same breath, Harvey goes on to point out that “everyone does it”, that other retailers like Myer and JB-Hi-fi employ the same spin – but none realise a significant online retail sales figure.

He also seems to conveniently ignore the explosive growth in online competitors to Harvey Norman like Kogan and Appliances Online. They’re nowhere near Gerry’s level, but they’re heading in the opposite direction – up!

What’s Wrong with This Picture?

Apart from the harsh language and grumpy attitude, there is a serious issue inherent in Harvey’s very public statements.

On the one hand, Harvey admits that Harvey Norman’s online retail channel and omnichannel strategy is more about spruiking the capabilities of the business – it’s about marketing. Then we have Harvey, seemingly at odds with the strategic element of Harvey Norman’s board, telling the world that he still considers online retail to be a waste of time, cutting his own spin doctors off at the knees by exposing their game.

In an interview Power Retail conducted with Laura Mcfarlane, Vice-President of Global Strategy at marketing firm SapientNitro earlier this year, Mcfarlane explained that the key to developing a functional multi, or omnichannel strategy is to support “a vision at the most senior levels of the organization and getting everyone – all the stakeholders – to buy into that vision”.

The reason for this is simple. If an omnichannel strategy isn’t understood and embraced by the business from the top down, the simple result is Harvey Norman – a business that can’t execute a proven (and necessary) business strategy, because its Chairman and Founder has to be dragged kicking and screaming all the way.

This is far from being the first tirade against online retail that Harvey has thrust upon us, and I highly doubt that it will be his last.

How much does a single franchisee contribute compared to online?

Unanswered: How much does a single franchisee contribute compared to online?

A Strategy Divided Against Itself

What a shock and disappointment this whole saga must be for Gary Wheelhouse, Harvey Norman’s General Manager of Digital. It was only a couple of weeks ago in a recent interview that he reassured us that Harvey Norman is wholeheartedly invested in its omnichannel future.

“Of course, I am aware of the perceptions out there,” Wheelhouse said, “but the truth is that Harvey Norman is very much invested in online being a key part of our ongoing strategy.”

Spin and bullshit, says Harvey. Unfortunately for Wheelhouse, his entire role is based on what his boss describes as a waste of time.

Whether or not you agree with Harvey’s perspective on the realities of online in Australian retail, the question continues begging to be asked: Why talk about it publicly?

It’s only been a couple of weeks since Harvey Norman released its first mobile optimised website, and as an example of e-commerce practice the company’s website has begun to look like a serious contender in the online space. Why Gerry keeps focusing on the negatives of online is anybody’s guess, and I think many are tiring of it – none more so than the digital team trying its guts out to get some results.

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