Underestimating the voice of the customer

Underestimating the voice of the customer

The online tax push by Gerry Harvey (Harvey Norman) and other large Australian retailers such as Myer, David Jones, Target, House and Borders is receiving incredible (and ongoing) backlash from angry consumers. What the retailers are proposing is for either the local GST to be scrapped on goods sold for less than $1000, or for a similar duty to be applied to goods bought from overseas online sites.

This tax push reveals two key points – the retailers’ lack of understanding of their customers, and their lack of understanding of the power of social media.

The ordinary people on the street (aka the customers) are flocking to Twitter, Facebook and YouTube to express their anger and disgust over the retailers’ proposition. In fact, the retailers’ public push for this online tax appears to have opened a can of worms. While many people are now saying they will no longer buy from these stores (particularly Harvey Norman), it has also provided consumers the chance to air ALL their grievances to do with the big retailers.

Media reports that the retailers are stunned by the reaction from consumers, which is interesting as we all know shoppers love getting a ‘bargain’. And they love the convenience of shopping online. Combine the two and it’s a heady mix. Trying to take this away from them is like taking a lollipop from a child. It’s never going to end well.

Before the advent of social media sites such as Twitter, Facebook, YouTube etc (that allow everyone a say) this proposed online tax would probably have gotten off the ground without a peep to be heard from disgruntled consumers.

However, social media has changed all this, as borne out by the reactions to this proposed campaign.

Following the public outcry, a recent media release from Gerry Harvey reveals he is stepping away from the campaign, saying it was ‘suicidal’ to have been involved. The backlash to him personally and his chain of franchises, Harvey Norman, has been too strong.

The irony in all this is that retailers source cheap goods and labour from overseas (and consumers are aware of this), but do not want consumers to be able to do the same.

A lesson in amongst this entire fracas is that companies need to create sustainable and mutually respectful relationships with their customers.

In the meantime, the retailers have alerted the public as a whole to the advantages of online shopping with overseas companies – wide range, big savings. Welcome to the 21st century!

The polls below tell the story.
Screen shot 2011-01-10 at 12.15.17 PM Source: Sydney Morning Herald 7 Jan 2011

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