JB Hi Fi Boss Talks About Online
JB Hi-Fi chief executive Richard Murray has said that the combined JB Hi Fi and The Good Guys online operations are now one of the biggest in Australia.
Speaking at a retail conference in Melbourne Murray also said that JB Hi-Fi had looked at buying online businesses to improve its e-commerce capabilities, currently JB Hi Fi online attracts an audience of over 1.3M consumers a week.
He told the conference that retailers need to take a disciplined approach to investment as consumer shopping habits change and the lines between online and offline retailing become increasingly blurred.
According to the AFR Murray acknowledged that mistakes had been made – citing JB Hi-Fi’s now-defunct digital music service – and admitted it was challenging for heavily scrutinised public companies to keep up with innovative start-ups when they had to make returns for shareholders.
“Customers are more informed and want better access to information – the challenge is getting it done relatively economically,’ Mr Murray told the AFR Retail Summit on Wednesday.
“JB Hi-Fi needs to get EPS (earnings per share) growth … that isn’t the case of an online start-up.
“So running an online business at a loss is fine for a start-up model but a challenge for an established public company – it may sit better outside public markets.”
Mr Murray said the shift towards online shopping raised questions for bricks and mortar retailers, including the optimum store footprint, lease costs, selling techniques in store and how to best capture information from customers who shopped in stores.
“We have great data on our customers who shop online … we protect customer privacy in-store because we don’t capture it,” he said.
“Online sales will grow disproportionately, but the real question is what will it do for our stores.”
For example, as sales shifted online traditional retailers needed to look for new ways to upsell to shoppers and work out how to take advantage of consumers who took photos of stock and prices in store to compare with prices online.
The good news was that retailers did not have to reinvent the wheel and lead the innovation charge, as large online players such as Amazon led the way on digital developments.
“People like Amazon are a challenge for JB Hi-Fi but while they create challenges they also create opportunities and they lower the cost of technology,” Mr Murray said.