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Online chat with Gerry Harvey

Tuesday, February 15, 2000
60 Minutes presents a live interview with Gerry Harvey.

Host Laik 9msn: First of all Gerry, welcome and thank you for joining us this evening. Perhaps you would like to begin by telling us a little about how Harvey Norman started and briefly where it is at today?

Gerry Harvey: Well, Harvey Norman started off in 1982. We started with one shop at Auburn in Sydney and it has now grown to about 106 shops in Australia and New Zealand. Recently we have bought an interest in a public company in Singapore that has six shops and we would like to grow that business in Asia into a bigger business than we have in Australia. So we are also looking at other countries. We would like to open Harvey Norman up in other countries of the world. We have another 20 or 30 shops we can open in Australia and enlarge the ones we already have. We can open another 15 shops in New Zealand. And that is about it.

Flamingo: Gerry, I would like to know your views on the way household appliances will be purchased in the future?

Gerry Harvey: In the immediate future they will be purchased much the same way as they are now. Harvey Norman has an Internet site but the business on that site at the moment is very small. However, that will grow as the years go by and we would expect, say within the next five years, that anything up to 10 to 15 percent of our total sales would be sold on the Internet.

Host Laik 9msn: Gerry, will the prices of appliances with computer technology be more expensive to start with or accessible to everyone at the standard prices now?

Gerry Harvey: Computers and the Internet are becoming cheaper and cheaper all the time, and the connection to the Internet is free in a lot of cases if you are prepared to put up with the advertising, so the cost of buying from the Internet, the actual cost will not be there.

Xian: Gerry, you have a fantastic marketing approach to Harvey Norman, every campaign is catchy and orientated to the family. Is this how you started out, to make Harvey Norman a family-orientated store?

Gerry Harvey: Yes, most of our business is to families. We sell household appliances, household furniture, computers and all our advertising is directed at families.

Host Laik 9msn: Gerry, how do you see these technologies going to be affordable to Australians, when according to the report they run to millions of dollars?

Gerry Harvey: Some of the appliances with computer technology will be very expensive - digital televisions will be very expensive. Last year digital television in America was selling for US$8000; this year that price will drop to US$4000. DVD recorder has just been released and that will sell for over $4,000.

Keith: Home automation: when do you believe it will become a reality?

Gerry Harvey: We will be doing a lot on home automation in the next one to two years. We will have a separate division where we will liaise with builders on new homes. We will have the house all wired up and we will be able to control, the computer will control, the air conditioning, refrigeration, cooking appliances, security, outside lighting, inside lighting, even garden sprinklers.

Doin: Gerry, won't all these new technologies make the human race lazier?

Gerry Harvey: Yes. But all these new technologies have been coming along every year for the last 100 years and arguably we have been getting lazier every year.

V_00: Gerry, how user friendly will the appliances of the future be?

Gerry Harvey: Well, that is one of the big problems that manufacturers have, in that they are really worried about the consumer-friendly side of all these new appliances. Even today 50 percent of the population still cannot work out how to record on the VCR and the technology is over 20 years old. So an awful lot of people are going to have big problems with much of the new technology on the market and the manufacturers are working very hard to solve these problems. Voice-activated appliances will make things much easier.

Roger: Gerry, can you please give us an overview about how you see the future of online selling?

Gerry Harvey: Well, I think that it is all very over-hyped and that the predictions of a lot of people are too optimistic. I would think that most of the online business will be conducted by traditional retailers and that over 90 percent of the e-retailers will in fact all go out of business one after the other. The problem is that it will be quite traumatic for an awful lot of people during this process.

Marcus: Gerry, do think the future is exciting or do you think that perhaps we are moving way too fast with technology?

Gerry Harvey: No, I think the future is very exciting and the greater the technology and the quicker we move the more exciting it all is.

Woody: Do you think that working from home will overtake going to the workplace?

Gerry Harvey: No. I do think a lot more work will be done from home but there will be a great need for people to interact and socialise and, as such, a lot of people will feel a lot happier working from a workplace rather than home.

Russell: Gerry, where do you see face-to-face retailing going in the next 20 years?

Gerry Harvey: I think face-to-face retailing has a big future, however, I do believe that 20 years from now it will only amount to 30-40-50 percent of what we have today. Twenty years away it is hard to tell for sure.

Sharon: Gerry, with all this technology are we not going to lose the personal contact that aids the retail industry?

Gerry Harvey: Yes, we will lose a lot of that personal contact, however, it is a free world, people have choices, they will exercise their choices and many will want to do it online, many will want to have that interaction with salespeople in shops.

Robert: Gerry, do you see a future growth industry being the training of people in new electronics and do you see providing that training as being an extension of your current business operations?

Gerry Harvey: Not to any great extent. We have the instance of computers over the last six or seven years where we run computer schools, but mostly people learn to use their computer with practice at home or in the workplace or with help from friends. There is not a big demand for computer schools, that being the case it would not seem that there would be a big demand for schools for all of the new technology coming into being.

eimeo: Do you think the average consumer is overwhelmed with too much product information when purchasing products?

Gerry Harvey: Yes, in electronics and computers, yes I think that when they are buying it is very difficult to try and absorb all the things that they would like to know about an appliance. A lot of people can still be quite confused even when they get it home and they still have to use it a lot, read instruction books and a lot do that, however, a lot just give up and probably only use 10-20-30-40 percent of the available options on that appliance.

Peita: Gerry, how have you and how do you see the older generation of Australians embracing technology?

Gerry Harvey: Very slowly. People over 40 tend not to want to embrace it and certainly once they get over 50 and 60 they don't show a lot of interest. We don't know how kids will be in 20 years. They are brought up with computers, we don't know whether they will rebel a little with a lot of this technology or whether they will totally embrace it.

V_00: Gerry, what is the latest in technology that you saw while you were overseas and when will it hit the shores of Australia?

Gerry Harvey: The most digital television is the most exciting thing to come to Australia in the near future, because we will be watching a picture that will be much, much better than the picture we are seeing today and the sound will be better. I did see technology where the picture definition was something like three to five times better than digital television, but if that technology was released it would cost maybe $100,000 or $200,000. You will be able to buy that sort of technology that will, in fact, make digital television seem like very old technology.

mel_001: How long do you think it will be before shopping online becomes our primary means of purchasing goods?

Gerry Harvey: I hope that it never becomes our primary way of purchasing. I would hope that it would be one way of doing it, but at least 50 percent of what we buy would be interactive with people and shops.

slades: I agree with Gerry that our population will become more Asian, although I disagree about the 90 percent or whatever the figure was. Gerry, what do you base your comments on?

Gerry Harvey: Basically, when I say 90 percent I don't mean all Asian, I mean 90 percent of people will have some Asian blood in them, it might only be 10 percent, but considering that the migration that will have to come to Australia will be mostly from Asian countries, then with all the inter-marriage, I can't see how there will be many pure blooded, if we want to call it that, Anglo-Saxons or Greeks or Italians or whatever nationalities. They just won't exist anymore.

Robert: Gerry, do you see e-magazines growing as a form of media and do you see your firm advertising in e-magazines?

Gerry Harvey: My problem with magazines is that there are just so many magazines, there are so many new titles of all sorts of magazines. Ladies' magazines, health magazines, home magazines, electronic magazines, the list goes on and on. I just find it very difficult to comprehend how all these titles can last.

eimeo: Gerry, what are your views on e-commerce versus traditional retailing?

Gerry Harvey: E commerce will grow and grow, traditional retailing will not die and I would think that traditional retailing will go into the next 10-20-30 years still representing the great majority of retailing.

Xian: Gerry, what advise could you give to small business owners on how to build their businesses in today's market place?

Gerry Harvey: Well, every business is different but if we are going to talk generally, the most important thing is you need capital, you need know-how and you need the capacity to work long hours.

Adam: Gerry, what sort of mobile phones are we looking forward to? I believe that Japan has a mobile our size with a camera able to project your image onto an LCD colour screen with compliant phones.

Gerry Harvey: Into the future mobile phones will connect to the Internet, you will be able to chat on them, with a little screen so that you can see the person you are chatting to you, you will be able to email and it will be used as a remote control to take care of your house for all your appliances and your security. It will be able to do an awful lot of the functions that computers do now.

Kalika: Where do you see Harvey Norman going in the future?

Gerry Harvey: Hopefully Harvey Norman will continue to grow in many different ways. We are looking at the moment at becoming a seller of things that we don't do now, such as electricity. We are looking at the possibility of being able to bundle not only the appliances and furniture but electricity, telephone and things like insurance and banking. So that we would hope to be a retailer of many things that we are not today, into a department store on the net selling many things that we don't sell in our shops. We would be heavily into finance, either in conjunction with someone else or on our own.

Host Laik 9msn: Gerry, thanks very much for your time this evening. This concludes our 60 Minutes live chat with Gerry Harvey, February 13, 2000. Produced by ninemsn in Sydney, Australia, ninemsn c2000.

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