Business Time - A question of attitude

Wednesday 12 January 2011

Business Time - A question of attitude


by Duncan Watts
Business Consultant - The 20/20 Group

We can all learn something from Harvey Norman boss Gerry Harvey.…and no, it’s not in the field of public relations.

For the past few months, Harvey Norman and a number of Australia’s largest retailers have joined forces to argue that, on a very simple level, the answer to their woes would be for the government to increase their competitor’s prices by 10%.

Now, that’s obviously a huge simplification of their current GST crusade against international online retail competition.

But, putting aside the various points of contention around how much difference a 10% tax would even make, how the extended tax would be implemented and exactly how big a slice of pie international online retailers are actually taking (some estimate less than 1.5% of the total Australian retail spend), one question stands out:

Why aren’t these companies acting more positively and looking internally to improve their own competitiveness, rather than taking a negative stance, complaining and trying to restrict someone else’s competitiveness?

It’s a pertinent point that applies to every business, everywhere. When a challenge arises in your business (as they so often have in the past 18 months to two years), how your business fares can often be improved by taking a positive approach rather than a negative one.

Here's an example.

A major national competitor is planning to set up shop next to your shop in Macrossan Street. There are two ways to look at this:

Negative approach: You throw your hands up in the air, mark all your stock down by 50% and write off your business prospects for the year.

Positive approach: You consider the potential opportunity of the additional foot traffic this will bring past your door, consider what you do better or differently, and begin telling people about it.

This might sound trite, but it works.

In Gerry Harvey’s case, instead of complaining publicly about an apparent loss of market share, why isn’t he selling his goods online too? The Harvey Norman website lists most of its products, but doesn’t allow online purchases.

Surely Harvey Norman’s national network of franchises, combined with its huge purchasing power, could make online sales and distribution within Australia reasonably simple in terms of logistics?

Plus, a local presence would enable Harvey Norman to offer far superior customer service in the event of faults and returns than any international competitor.

There is obviously the issue of cheaper prices available from overseas online retailers, but a lot of that has to do with the currently strong Aussie Dollar, which is unlikely to last forever.

Plus, you shouldn’t underestimate the power of instant gratification – people will often pay a premium if they can get their hands on your goods more quickly than a competitor’s.

In Gerry Harvey’s case, Harvey Norman could take a more positive approach of establishing an online sales presence while it’s (apparently) a bit quiet, and once the dollar depreciates it’s ironed out any issues and is ready to go. It may even assist in establishing a competitive advantage over other Australian retailers.

So while none of us are in danger of generating as much negative publicity as Gerry Harvey has recently, it’s still worth stepping back and asking yourself whether your response to a particular problem falls within the realms of positive or negative.

Lesson learnt – thanks Gerry.