Australian e-commerce cost of inaction (COI): $2 billion

[Online retailing is] a complete waste of time. I’ve got an online part of my business, but I definitely would not put more into it. That’d be a recipe for a disaster.

The whole world was conned with online retailing. People say I’m a dinosaur, and I’ve had people coming to me with sites and saying, ‘Oh, look at this, they have 10,000 or 20,000 hits!’ – but it’s a con, a complete con.”- Harvey Norman founder, Gerry Harvey, 11/2008

This leading retailer's views have changed drastically in the last three years, Harvey Norman have invested significantly in their digital presence and Gerry Harvey is now a stakeholder in various additional e-commerce including a deal-a-day website. However, Australian industry in general is still cautious about incorporating digital in their business strategy.

The following two screencaptures are of (leading US electronics retailer) in 2001 and (leading Aussie electronics retailer) in 2008 (taken via the Wayback Machine). These show that 10 years ago, Best Buy already had the following features on their fully e-commerce enabled online store:

  • categorised products
  • detailed product specifications
  • cross selling: (in the left sidebar) accessories, service plan, (at the bottom) suggested related products
  • in-store pickup information
  • wishlist (ThinkAbout It link)
  • shopping cart

Whereas Harvey Norman even 3 years ago (at the time the preceding quote was given) didn't even enable users to easily browse their catalogue online (forget about actually purchasing anything). in 2001, via Wayback Machine in 2008, via Wayback Machine


*Potentially* this shortfall in Harvey Norman's offerings could explain why their revenue isn't AU$2 billion higher. Over simplified math explained:

  • US population: 307million. Australian population: 21million.
  • US population 14x Australian population
  • BestBuy 2010 revenue: US$ 50.42 billion. Harvey Norman 2010 revenue: AU$ 1.56 billion.
  • If we use the 14x factor, Harvey Norman's revenue should be: AU$ 3.44 billion (i.e. ~2billion more than what it actually is).

Harvey Norman has covered a lot of ground in the last 3 years, but it *still* doesn't offer online shopping:

  • nicely categorised products with search filters
  • detailed product specifications
  • wishlist, bells, whistles; but no shopping cart

Whereas Best Buy has upped the ante with:

  • social shopping: Facebook etc 'Likes' & shares, product Q&A, customer reviews
  • shipping time
  • in-store pickup stock check

And those are just the functional features, Best Buy's laser focus on streamlining a user's journey from homepage to checkout is phenomenal! in 2011 in 2011


When undertaking your own business's e-commerce journey, consider both the Return on Investment and the Cost of Inaction. We covered the COI with the previous example of Harvey Norman's missing $2 billion. Whereas, with ROI ensure your investment is skewed more towards strategy and not on technology.

Technology evolves rapidly, we use an amazingly flexible e-commerce framework that covers the spectrum from group buying to consumer retail. With these powerful and flexible e-commerce frameworks you can quickly deploy a full featured e-commerce site. Take advantage of these cost-effective technical solutions, and ensure your monetary and time spend is on planning and meticulously executing your e-commerce strategy.

E-commerce strategy

We will soon be covering how to develop an e-commerce strategy. In the mean while, here's some great reading from expert and experienced advisors on why you need said e-commerce plan ;)

  • Past neglect costing online sales

    Australian bricks and mortar retail chains may have their backs against the wall in the face of cheaper international online offerings, but their general lack of an online presence over the last decade is also to blame.

  • Online shopping to grow twice as fast as in-store retail

    A new report by PriceWaterhouseCoopers has tipped that online spending would grow at least twice as quickly as the total retail market over the next four years. The report ... forecast that online spending by Australians would grow by 12.6% a year between now and 2015, surging from $13.6 billion to $21.7 billion.

  • JB-HiFi: Early Adopter in a laggard market

    Experian Hitwise recently named JB Hi-Fi as the second most frequented Australian retailer with 9.5 million hits in the 9 weeks ending 1 Jan 2011, second only to Apple which had 10.8 million hits. What’s more, this represents more hits than the combination of consumer electronic competitors Harvey Norman, Dick Smith and Kogan together (with 4.6 million, 4.1 million and 0.5 million hits respectively).