Online shopping tax: the biggest PR fail of 2011 – already?

In this guest posting, PR Vuki Vujasinovic analyses Australian retailers’ disastrous attempt to persuade the public that the government should tax online shopping from overseas.

I’m calling it now: We’re only a week into the New Year and we’ve already seen the biggest PR fail of 2011 (unless Tiger Woods goes on another rampage).  

As we’ve seen this week in the media, a coalition of big bricks and mortar retailers is trying to garner public support in an attempt to lobby the government to “create an even playing field” in the Australian retail sector.

Strategically, their PR approach has failed at all stages. Their strategy surrounding the issue was leaked well before the print campaign even started.

The biggest failure has been the key messaging, which is the core of any PR campaign. I’m surprised a respected and prominent PR agency didn’t manage the publicity appropriately.

From the start, the key message has been that the government should tax purchases from overseas websites that are under $1000. Apparently, this would create an “even playing field”. You’re never going to get mass public support for a campaign to increase taxes and charge the public more. Ever.

The approach for this campaign should have been to lobby for no tax or duties on all products under $1000, no matter where they are purchased. The big retailers would then be seen as the consumer champion.

It would have been the government looking like the bad guy once they announced they are not willing to stop taxing all products under $1000. Then the real debate about the even playing field would have started, and it would have been the government experiencing the mass PR pressure we’re seeing unfold right now.

The public outcry has caused tremendous brand damage to every retailer who is being associated with this campaign. A quick twitter search for “Dear Gerry Harvey” shows how passionate Australians feel about the issue. Reading through the comments and polls from all the news articles gives strong qualitative and quantitative evidence that they’ve seriously messed up their PR approach.

Aside from the key messaging, the debate quickly became ‘big retailers vs online retailers’. The PR campaign should have made the conversation “Australian retailers vs International retailers”, not “bricks vs clicks”. A key part to improving this strategy would have been to get at least one prominent Australian online retailer on board. By doing this, the campaign would have garnered mass public support and put serious pressure on the government.

Strategy and foresight are some of the most important elements of any PR campaign. They must be carefully thought out in order to communicate the correct key messages and achieve your goals. Every business that’s in business has a story to tell, but you must tell it properly.

Vuki Vujasinovic is director of PR agency Click PR. His clients include online retailer Kogan.

Comments


  1. Bill
    6 Jan 11
    3:41 pm

  2. you would think that support for the mining tax, something that is arguably in the interest of the australian taxpayers, would be a given as well.

    after seeing that, and watching america over the years, i never discount the ability of people to vote against their own interests.

  3. stu
    6 Jan 11
    3:42 pm

  4. The PR firm is FD…you know, rhyhmes with dud as in “Elmer”.

  5. Marto
    6 Jan 11
    4:04 pm

  6. Not only a PR failure, but it has awoken more people up to the practice of going in to your Harvey Norman, Myers etc to get the measurements and product information, before going online and buying it cheaper elsewhere. I did that when I purchased a laptop and home entertainment system. Walked into the local Harvey Norman, had the usual crap chat with the pushy 19 year old who didn’t listen to a word I said, then went home and researched prices on the net before buying online.

    Gerry Harvey has a 1970’s business model that will not hold up in this new climate. But instead of adapting to survive, this ‘free market champion’ runs to the Government to help make him richer. Well the chickens are coming home to roost Gerry.

    There is no real recovering from this for these idiots. The 3-7% of shoppers using online is about to surge exponentially due to a couple of greedy billionaires wanting to wring a few more drops out of the public. I still can’t believe that they honestly thought that Australians want another tax to pay, want to pay more for their goods, and love to be told where they must shop. You don’t need a long neck to be a goose.

  7. Simon van Wyk
    6 Jan 11
    4:09 pm

  8. It’s the best thing that ever happened to the Interactive industry. These guys have now clearly explained to every luddite that when you go online you can buy cheaper. All those people who never considered going online are now signing up as we speak. Thanks Gerry.

  9. Riarn
    6 Jan 11
    4:16 pm

  10. I find it ironic that I had to wait till the 5th paragraph in this for the message/point, in an article about how they failed in delivering the key message. Do as I say not as I do hey?

  11. Beau Ushay
    6 Jan 11
    4:25 pm

  12. Is it too late for Gerry’s Gang to switch tactics and attempt what has been suggested here?

  13. Marvey Horman
    6 Jan 11
    5:19 pm

  14. My old school business model is not working like it used to. I have helped people to get into so much debt that they don’t want to take on any more, plus I have not adapted like many smart retailers have and my online strategy is quite simply crap!

    I know what to do, I will whinge to the government and try to treat the public like morons (after all that is what I have done in the past), which should ‘see me right’!

  15. Marvey Horman
    6 Jan 11
    5:20 pm

  16. I did make a tv advert saying how great TV advertising was. H’mmm perhaps I should have built a decent website and reviewed my online strategy instead?

  17. Chris
    6 Jan 11
    5:25 pm

  18. Your point about the different perspective of requesting a drop of the GST for all purchases less than $1000 is brilliant, and yes, would have made all the difference to the campaign and who the public chose unleash fury at. As it stands it is simply billionaires ruthlessly trying to get richer and it will cost them. Yes it is seriously the biggest PR stuff up in a long time from people who should know better and certainly have enough money to do better.

  19. Dik dunkers
    6 Jan 11
    6:56 pm

  20. Marto = well said.
    Riarn= WTF? perhaps you work for FD?
    Idiot.

  21. mumbrella
    6 Jan 11
    7:29 pm

  22. Hi Dik,

    Riarn is a regular commenter who is more than entitled to their opinion. It’s not fair to suggest Riarn is astroturfing just because you don’t agree.

    Cheers,

    Tim – Mumbrella

  23. Champagne Taste, Beer Budget
    6 Jan 11
    7:43 pm

  24. The scary thing is there was no “strategy”……shows how important agency collaboration is and working out the right approach…don’t be so quick to push blame on FD….a partnership consists of more than one party.

  25. Dinosaur
    6 Jan 11
    9:19 pm

  26. I haven’t seen so many comments on a story before (over 3000 and counting and pretty much all scathing Harvey Norman and the rest of the greedy large retailers…) These are the same retailers who killed off the small local retailers. (You know the ‘un Australian mob…)
    http://www.news.com.au/money/m.....5981373508

  27. Ron Jeremy
    7 Jan 11
    7:57 am

  28. Looks like Gerry’s accepted defeat after being called “greedy, ugly, old, out-of-date, c—s”…
    http://www.theage.com.au/busin.....19hkq.html
    That’s now an official “fail”, is it not?

  29. Josh
    7 Jan 11
    9:32 am

  30. @Dinosaur Couldn’t agree more.

    These big retailers haven’t shown a skerrit of remorse as they continue to bury small, local business – the butchers, bakers, and candlestick-makers.

    Surely it’s a bit rich (pardon the pun) for them to cry foul now the shoe’s on the other foot.

    If they don’t want to keep losing out to overseas/online competitors they should get with the times and invest in far better online service/prices/strategy. They’ve worked so hard to forge a trusted (sic) and known brand, they should make the most of that and have a strong presence online when people go there to shop.

    If their sites, prices, product choice and service matched those sites doing it so attractively, and successfully, I’m sure they might find that their ‘loyal’ customers wouldn’t be going elsewhere in droves. If the product is the same and the price is comparable perhaps people would rather buy local than from an unknown online retail site in Tucson, Arizona.

    Click here to purchase.

  31. Riarn
    7 Jan 11
    9:39 am

  32. Dik, I dont work for FD or ever have, I’d actually never heard of them. I agree they havent done a great job.. But I do like irony. How about we split the difference and you can pass on my apologies to your friends at click
    Not that id assume you have any affiliation with them of course. I wouldnt want to look like a douche

    Sorry Tim, I also cant help myself

  33. carrob
    7 Jan 11
    10:54 am

  34. Don’t worry Gerry. This internet fad will blow away soon enough.

  35. Jocelyn Hunter
    7 Jan 11
    11:17 am

  36. Completely agree Vuki. Hard to believe that there is actually a PR agency behind this initiative. Imposing GST on all imported goods online is just missing the point, it’s really not going to make much difference when you’re saving $500 on a laptop etc. These guys have failed to invest in their online offering, are suffering now and want someone to blame as their see their market share disappear. If anything, this PR disaster is going to drive more people away from the stores and onto the internet to shop for the best deals.

  37. Nic Halley
    7 Jan 11
    1:29 pm

  38. The Worst of Perth
    7 Jan 11
    1:46 pm

  39. I’m sure this is exactly the public reaction Labor hoped it would get when the billionaires were bleating about the mining tax.

    Poor old Gerry was interviewed on tv at the Gold Coast wearing a hat with ‘Magic Millions’ on the band. Irony or insensibility?

  40. sven
    7 Jan 11
    2:52 pm

  41. can someone show me where it says the key message was that govt should charge GST on all imported goods under $1000? all i saw in the ad was references to levelling the playing field, presumably by either doing that OR granting the exemption to domestic retailers as well. While the failure to only call for an extension of the exemption to local purchases was a strategic blunder, it’s not as odious as simply asking that consumers be charged more for foreign online purchases.

  42. Con
    7 Jan 11
    3:16 pm

  43. It’s about time there was a shake up in the greedy nepotistic australian retail market.

    I’ve lived all over and Australia is still the most expensive place to live in the world, whether it be groceries, clothing or furniture.

    It’s high time that Australian retailers began pricing their products competitively, rather than crying poor and threatening job cuts.

  44. Matt
    7 Jan 11
    3:30 pm

  45. Nice rant Sanchez ! aka (Vuki)

  46. Matt B
    10 Jan 11
    1:35 pm

  47. As a 15 year online advertising guy who has presented to various people at Harvey’s over the years to be constantly told online was a joke, and was not worth their trouble, this is pretty sweet!

    m

  48. Ex PR
    10 Jan 11
    1:53 pm

  49. Um yea the issue has been handled badly by the retailers and in particular Harvey Norman BUT …. am I the only one who finds this constant criticism of Gerry Harvey by Kogan and its agency a little tired? It’s one way to get attention in the absence of any of your own news I guess but personal attacks aren’t going to build Kogan’s credibility long term.

  50. John Grono
    10 Jan 11
    3:52 pm

  51. Methinks emotion is outweighing logic here.

    First, there was the strategy proposed of ‘waiving GST for all purchases under $1,000″. Boom – there goes a huge chunk of your broad-based tax system. Second, it is so easy to game … please Mr. Retailer make it out on two invoices so I can avoid the GST. Third, GST is not an “old school business model” of Harvey Norman – it is a legal requirement of Australian taxation law.

    A large chunk of the reason this has come about has bugger all to do with online shopping growth, but because of the Aussie dollar hitting parity with the greenback making overseas goods comparatively cheaper. If the Aussie dollar drops again people will swing back to bricks and mortar. However, the issue of inequality will still remain, and I suspect that unless it is legislatively resolved then local retailers will set up off-shore websites. Overall GST revenue would then fall, and I suspect that governments of either persuasion would feel justified to lift the GST rate – yep more for products you CAN’T buy online … fancy higher petrol prices for example anyone?

  52. TheDishWasher
    10 Jan 11
    4:53 pm

  53. Dear Gerry Harvey trended 4th worldwide on Twitter that night. Do not under estimate consumers, they now have a voice to vent out, that is social media.

  54. DigitalMLab
    10 Jan 11
    8:20 pm

  55. Completely agree with a lot of the comments made here and great article about the negative damage done through this campaign. Through their ignorance they have created more awareness about their weakness as organisations. This has educated more consumers about the benefits of online shopping which is the best thing that could happen to our digital industry in Oz. Its time that retailers step up and sort their digital strategy out once and for all.

  56. Dear Gerry
    4 Feb 11
    11:19 pm