GST thresholds no deterrent to online shopping

This article first appeared in New Zealand Herald 4 August 2015

Forgive me if I’m missing a much bigger picture here but changing the GST threshold of overseas online goods won’t in any way deter me from spending my money online overseas.

Both Australian and New Zealand papers and politicians have been debating this GST thing for a number of years. The argument seems to have taken off again in the last few weeks, with John Key joining Joe Hockey’s chorus on changing thresholds to $20 “or even zero”.

The first time I heard this debated in Australia was around 2010. Back then Gerry Harvey started fanning the flames and complaining about this-Interwebs-thing that spelled the end of all Australian retail as we know it.

In that same year, the Australian dollar hit parity with the greenback and I can tell you, shopping overseas was a delight.

Not because I saved some marginal $10 in GST, but for exactly the same reasons I still buy online overseas despite the dollar, pound and euro packing a punch against the Aussie dollar. I buy overseas because the selection on many items is exponentially better with the world at my fingertips, because the price difference is usually significant, and because it’s fun.

Of course I feel empathetic towards some of the lovely little retailers whose stores have closed down over the last few years. But many strugglers I feel far less sympathetic towards. Harvey Norman, Myer, David Jones – the bigger chains that left things very late and, even now, are too uninspiring in too many qualities such as customer service, product choice, pricing. And then there are those other stores that, lets face it, often sold crap that people stopped buying.

I think the GST debate for many local retailers (on both sides of the Tasman) hides something that’s a lot more difficult to deal with. That many brands are pretty average, in-store experiences aren’t all that interesting and too often as shoppers we wander around stores that have limp product selection and prices that don’t justify the goods.

There are few brands these days that inspire great loyalty, or deserve it. I’ve worked in marketing for a number of years and conducted the research to find markets for products, worked to position them properly and appeal to the right customers. And still there are times when you just say to yourself maybe this brand has just had its day?

GST may be a band aid for many little local businesses that think they’re competing with overseas retailers. More likely it’ll be a wake up call that it’s not the economy, not the dollar, not the customer who doesn’t get it but that it’s time to evolve and find a way of doing things better, becoming more relevant. Or close shop.

Just this week one of my favourite writers on the topic of brands, Mark Ritson, wrote a piece for UK’s Marketing Week about how marketers have lost the meaning of some of our most basic principles. That we’ve rendered the important concepts of exclusivity, differentiation and brand loyalty to near uselessness. Retailers who think GST will bring them back from the brink should read this piece and decide whether they have bigger issues to address.

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