JB Hi Fi Boss Tips “Low” Price Battle With Amazon
Tipped to witness a major decline in revenues with the pending arrival of Amazon, JB Hi Fi boss Richard Murray has told a Sydney conference, that JB Hi Fi will take the US online retailer head on with a low-price strategy.
Admitting that the Australian retail market was already under pressure Murray said that he was confident that JB Hi-Fi was well placed to take on Amazon if the online retailer rolls out their operation in Australia this year.
In recent months, the mass consumer electronic retailer has been rolling out new format stores, they’ve also been working directly with suppliers to improve in-store merchandising, a move which US retailers have told ChannelNews is “important “when competing up against Amazon.
“We have had competitive challenges over the years and I remember when in 2012 we were talking about that,” he said.
“Change is inevitable and running at a million miles an hour is part of our DNA, and not thinking you know all the answers.
“Be it Amazon or Alibaba … all they do, aside from being very formidable competitors, is challenge you to make your business better. Being better is all anyone running a corporation wants to be because that is how you keep your costs in check.”
Mr Murray said he believed JB Hi-Fi’s low-cost business model — which centres on handwritten signs — and store rollout meant it would remain competitive against Amazon.
In recent weeks both JB Hi Fi and Harvey Norman shares have fallen, Harvey Norman more so than JB Hi-Fi.
Analysts are tipping that Amazon could snare up to $4 billion worth of sales in Australia within the first five years of trading.
Most of the existing players, led by Harvey Norman chairman Gerry Harvey, have promised to fight Amazon primarily on pricing and servicing.
Murray said nearly 80 per cent of products bought online were delivered within 36 hours.
“The thing with retail is that it’s like a war every day,” he said.
“We are not running an infrastructure business where you make a bet and watch that investment over a decade.
“If we miss sales today they won’t be there tomorrow.
“When I think of how we have dealt with those competitive threats, it’s that we have just run the business model very efficiently and not letting hubris creep in.”
Mr Murray said the recent Good Guys acquisition, which was settled in November, was performing well and the company was being integrated into the overall JB Hi-Fi business.
He said the company would look at the future of its JB Hi-Fi Home concept, where the retailer was selling whitegoods in about 60 of its store across Australia.
Good Guys, he said, was more closely tied to the fortunes of the volatile residential housing market than JB Hi-Fi.