The CEO of Woolworths Limited, Grant O'Brien, has today lashed out at retail giants like Harvey Norman for constantly complaining about the dangers of online retail to Australian jobs and businesses, and has urged them to get with the program.
Speaking at the Australian Chamber of Commerce in Sydney, O'Brien said that technology has given consumers the ultimate choice when it comes to buying goods; they will no longer wait for new products to come to Australia, and will immediately vote with their feet when it comes to price.
As a result, consumers are buying offshore from stores like Amazon, and importing their purchases back in to the country, much to the chagrin of Harvey Norman and retail chains like Myer, Target and the former bricks-and-mortar stores of Borders and Angus & Robertson.
O'Brien said that the retailers' campaign to lower the $1000 GST-free threshold is largely irrelevant, and that it's time for their recalcitrance towards online shopping to stop.
"In the last 18 months, we've heard a lot of complaining from many of my fellow retailers who seem terrified about the online monster lurking under their beds — costing them jobs, sales and profit margins. Much of the conversation has focused on the question of the GST threshold on imported goods. Yet, the savings available to consumers on many products can far outweigh the current GST threshold, making this point irrelevant.
"Maybe the solution isn't to fix the GST on imported goods; maybe the solution is to lower your prices to a point where the consumer can actually have some trust again. The last thing Australians need is retailers calling for more taxes. It's nonsense," he said.
O'Brien said that using a multi-channel retail strategy that includes online selling is likely to build a stronger customer base by offering an improved customer experience, improving the company's Everyday Rewards data as a result.
"Through our Everyday Rewards card data, we know that a customer who shops both online and in-store is up to 70 per cent more valuable to us than a customer that only shops in-store or only shops online. That integrated model, where the customer can switch seamlessly from bricks and mortar to mobile, is absolutely critical. They already trust the brand, they just want to shop, source information and communicate in a way that suits them the most.
"So that might mean browsing online and picking up in-store, or buying online but returning goods to store. Or just about any other permutation. But all channels are interdependent — they are all representative of your brand, and you have to maintain investment in each of them equally."
Many opponents of online retail, including Harvey Norman and David Jones, have now opened their own online stores in a bid to keep up with consumer demand. Both have placed high demands on their online teams, with Gerry Harvey aiming for $1 billion in revenue within a decade, while David Jones today said that it expects to make 10 per cent of its profits from its online store.
The Woolworths CEO went on to attack the argument against online stores, which says that a shift to a multi-brand retail strategy that includes online stores will cost jobs.
"Jobs aren't replaced by technology; they just change as a result. Woolworths is an employer of 192,000 people, and the creation of new jobs and development of talent remain a critical plank for us. In fact, in November, we announced we would be creating 10,000 new jobs this current financial year just from new stores and distribution centres. And that number will continue to grow in years to come," he said.