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Gerry Harvey lays down the challenge: Kogan accepts

Gerry Harvey lays down the challenge: Kogan accepts

Posted: 28 Apr 2011

We've heard the news that Gerry Harvey has announced he is going to create an online store and join the online shopping revolution. We welcome Harvey Norman to the online space and we look forward to some healthy competition, which will ultimately benefit all Australians through greater choice. Gerry has a long history of talking down online business, while promoting his traditional bricks and mortar interests. Whenever we have tried to highlight the advantages of online shopping to the community, such as price, convenience, customer service and ease of research and comparison, we heard Mr Harvey retort by saying that online is a “dead-end”, that nobody can make money from online, and online “is a complete waste of time”.

That's why we are really glad to see how a leopard can change its spots - that despite a decade or more of debunking online, the Doyen of Australian Retail, Mr Gerry Harvey, has found his spectacles, and can now clearly see the potential that online brings to customers, retailers and the community in general. 

Gerry has laid down the challenge and has ordered his team to do $1 billion in sales online within 10 years. We accept the challenge! That is why, today, I have responded to Gerry by asking my team to do outdo Harvey Norman 10-fold - that means $10 billion in sales online within 10 years!

Gerry has said, "We'll just get there somehow or other. How I do it is my business". As for Kogan, we'll get to our target by a pretty simple strategy. In the coming months and years, we will be expanding into new product lines and across new geographies. We are currently a small player in comparison to the likes of Harvey Norman, who have shops around the Country and in a number of places across the World. But we do know one thing, as Charles Darwin said, "It is not the strongest of the species that survive, nor the most intelligent, but the one most responsive to change."

We were very early entrants into the online space in Australia, because we saw that change was coming in the retail space. This foresight has brought us to our position today. As for the future, we think that the online trend will not only continue, but accelerate.

But, we think that retailers who try to do both bricks and mortar as well as online will end up stuck in the middle - either they will have to cannibalise their physical sales by discounting their prices online, or they will maintain the same prices across both physical stores and online stores, which will mean that their online prices won't be competitive against the pure online players.

We are confident that pure online players will continue to be able to offer the best value, both now and in the future. This is why we have accepted Gerry's challenge, and why we are happy to have Mr Harvey as an online competitor.

Mr Harvey, it’s on!

What do you think? Do you think Harvey Norman will get to $1 Billion in online sales within 10 years? Can the mature Harvey Norman business model be successfully adapted to online?

Onwards and upwards,

Ruslan Kogan




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