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Large Australian Retailers Screaming about GST Free Online Purchases

The consumer backlash over Australia’s large retailers blaming overseas internet sales for their falling revenue has unleashed a tidal-wave of anger.Large retailers like Myer, David Jones and Harvey Norman have blamed the fact that online sales made out of Australia do not attract the 10% GST and have claimed that if the Government made sure that the GST was paid on these purchases, this would “save local jobs” by making the cost of goods bought locally, more attractive. To promote their view, they purchased massive full-page ads in the major daily papers.

The got a reaction they did not bargain for. Hundreds upon hundreds of negative and angry comments from consumers have filled the online news papers. Twitter and Facebook is alight with rage. Talk back radio has been flooded. Isn’t online social media just awesome!

Have a look at a sample of the comments received by The Age .

In Ian McIlwraith’s article for The Age/Sydney Morning Herald on 5th January, “Billionaires take a turn at initiating ‘brand’ damage”, he captures the issues well,

People are shopping online for a host of reasons, and not always outside of Australia – price, convenience, service, variety and efficiency chief among them. They are not doing it to avoid a 10 per cent surcharge; the savings are generally much deeper.

Driving their Bentleys off Bolte Bridge is possibly the only thing that could have caused them more ”brand” damage than their claims that the main reason behind the retailing malaise is that once-captive customers are avoiding GST by hopping online rather than walking into stores.

A number of our clients running e-commerce websites compete effectively and with very loyal customers. Certainly price is a factor in getting the sale, but they also know that fast delivery (shipping same day as the order) and helpful advice on the phone, along with great stock variety and the product information they need available online, helps them win the sale.

The response to the big retailers campaign has been so huge, it puts to rest the nay-sayers who maintain most people really don’t like to shop online. In fact, a number of people have said that the retailers anti-online campaign has made them look online now for the first time.

The comments are awash with tales of poor service at the major retailers from staff who don’t seem to care (I don’t blame the staff here – most of them are very young and have most likely been dropped in it without any training and little product knowledge).

This was my experience yesterday at Chadstone. My husband and I wondered into Myer on the way back to the carpark from seeing a movie. He was interested in some shoes. On arriving at the mens shoes section we found 4-5 other customers holding one shoe (they only put one of the shoes on display), talking loudly about the fact there were no staff to help them. One woman was trying to placate a 60+ gentleman (possibly her husband) who was seated and complaining, “how on earth can it take15 minutes to find the other shoe! Forget it, let’s just go!” The young shop assistant arrived back with the other half of the pair but it was obvious there was a problem and the guy said “forget it, let’s get out of here”. The young sales guy (who looked about 17or18 and was on his own in that section) was then swamped by the others (who had been waiting how long?).

We left.

The exciting thing about the feedback and comments in this issue is that shoppers are very keen to buy online and to do it in Australia if a good variety of stock is available, delivery is quick, the website is easy to use, and comprehensive product information is available. Oh yes, and price does matter – but it is not the only factor.

Shoppers have said they go online to find products not stocked by the big retailers – specialty items usually only available from specialty stores. If you have niche products, setting up an ecommerce website and getting your stock online will open your business up to a huge and rapidly growing market that wants to do business online! Just a website alone won’t get you there though. Always factor in the online marketing you will need to rise above the crowd. Just like marketing and advertising with a physical store, you need the same for online – except it can be a lot cheaper and with a much better ROI.

 

Janet Pearson
Janet Pearson
Janet founded Technology Matters in 1998, back in the days of animated GIFs and competing search engines. As well as charting the course the company, Janet's 20+ years of business, marketing and IT experience bring a strong business focus to all of Technology Matters' projects.

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