Gerry Harvey: How did it all go so wrong?

How did it all go so wrong? Perhaps that’s what Gerry Harvey is thinking right now. And so he should. In the space of a day, the canny retailer has succeeded in turning his own reputation from a positive to a negative.

Earlier this week Harvey was the home-grown success story, the eccentric billionaire with a canny ability to predict and tap into the psyche of everyday Australians.

Today he is the public face of a badly crafted campaign to force and shame Australians into curbing their online shopping behaviour. Harvey is now perceived as an arrogant capitalist, interested only in lining his own pockets with the limited cash earned by hard-working Australians.

How did it all go so wrong? To an interested observer it is quite clear. The campaign by the Australian retail industry is flawed no matter which way you look at it.

Politically, there are no votes in it. It pays to remember that it took three politicians to attempt bringing in a GST (Keating, Hewson, Howard) before it was successfully introduced by Howard in 1998. Even then it was a high-risk strategy and it would take a brave politician to extend the GST’s scope even now.

At a policy level, the imposition of GST on online purchases increases rather than lightens the regulatory load, with no discernable public benefit delivered as a result. No modern government would interfere in a market by increasing regulation without being able to point to a considerable public benefit.

From a behavioural perspective it would take more than a 10% tax to dissuade online shoppers, particularly when the price differential is often more than that and online shoppers still don’t have to contend with carparks, checkout queues or limited choices on the shelves.

And perhaps most importantly, the campaign is flawed from a communications perspective. Its key messages have no resonance with the people whose behaviour it is trying to influence, namely the politicians and the shoppers.

It appears the retailers’ campaign was neither strategically planned nor deployed.

No organisation should try to influence or change public policy without covering all these bases. The retailers should have been armed with market research and economic modeling to demonstrate that their case was legitimate and that it could deliver both political and public benefits as well as the behavioural change they sought.

They should have engaged on this issue at the departmental level first, with complementary briefings provided to MPs, key ministerial advisers and relevant journalists. This “pincer movement” strategy has the best chance of securing the attention of decision makers and creating the necessary momentum to get a favourable policy decision.

If these avenues have been tried and failed, it may have then been appropriate to take out ads in the newspapers.

But there is an old saying in the world of lobbying and advocacy: if you have to run to the media, then you are admitting that your other lobbying strategies have failed.

Going to the media is the final resort, a very public last-gasp attempt to shanghai a minister into a favourable decision. More often than not, this tactic will fail too because it is seen by both politicians and public servants as unnecessarily aggressive, overtly disruptive and ultimately self-centred. None of these perceptions serve well when one is trying to influence government.

And finally, perhaps the greatest weakness in the retailers’ campaign is its demonstrated misunderstanding of shopper motivations and behaviour.

Instead of spending mega-dollars on newspaper ads, the retailers should have taken steps to understand why customers shop online and how they might be enticed back.

The GST campaign suggests they have not done this even this basis homework, because it is clear that people shop online for more reasons than price alone.

Author: Drag0nista

Political columnist at The New Daily | Editor of Despatches & AusVotes 2019 | Author of On Merit, a book on the Liberals' *women problem*. Former Liberal staffer and industry lobbyist. Studying the entrails of federal politics since 1989.

5 thoughts on “Gerry Harvey: How did it all go so wrong?”

  1. There was a fundamental flaw in not engaging the audience whose behaviour the retailers wished to change. A print-based ad campaign with no use of online or social media really shows they’ve missed the boat.

  2. “Earlier this week Harvey was the home-grown success story, the eccentric billionaire with a canny ability to predict and tap into the psyche of everyday Australians.”
    I’m not sure about this. I think Harvey has been burning bridges for at least a year. Possible since his silly remarks on charity and the homeless.

  3. Gerry Harvey’s ego fuelled by success for many years has been losing it’s way for a while. Selling over priced goods on long payment terms to consumers that can’t afford in the first place. You could say similar sales/financing models that caused the housing bubble in the US. Can’t afford it? No problem. Take it away now and pay double or more in 2 or 3 years. Creating an income pipeline for him. I know its business and he’s done very well out of it. Yes he is an employer and I’m sure he gives to charity and all.
    Either hasn’t been listening or is surrounded by people telling him what he wants to hear. However we needn’t worry for Gerry.
    The internet has changed our world for the better in so many ways.

  4. Your second-last par points to the seventh-last par of this (“Australian retailers should focus … Chicago”) as a portal to the future of Australian retailing.

    Given how keen this government has been to cave in to half-arsed self-interested campaigns by billion-dollar operations, it was worth a shot. If you have to run a multi-layered sophisticated campaign later, well live and learn. The poor sods running the big retailers could well be under the impression that the David Jones campaign in managing McInnes and Fraser-Kirk is what a successful PR campaign looks like.

    At least they’ve had the sense to prevent Margy Osmond from popping up to declare that everything in retail is tickety-boo, as she has over the past two or three months. Figures and anecdotal evidence alike pointed to a poor Christmas for retailers and Osmond’s chirpy denials have just been irritating. Now retailers have finally admitted there’s a problem, for which the GST thing is supposedly a solution, so in that sense their message is a bit consistent. It has been merely bad rather than some dreadful truck-smash of mixed messages.

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