Online GST backlash

BIG retailers losing sales to the internet should focus on improving their services instead of crying poor, says consumer watchdog Choice - one in a chorus of voices condemning the retailers yesterday.

Retail giants including Myer, David Jones, Borders and Harvey Norman are pressing the government to apply GST to goods bought online.

But the federal government's peak tax advisory body, the Board of Taxation, says the cost of collecting the extra GST would be likely to outweigh any benefit.
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The push comes after retailers reported a slump in Christmas trading and as consumers exploit the strong Australian dollar by shopping overseas online.

No GST is charged on goods bought from international websites for less than $1000.

Choice campaign director Christopher Zinn said shoppers should not be penalised for big business failing to adapt to their changing needs.

"The big chains should recognise that it's their high prices, limited range and poor customer service that increasingly encourages people to use the internet," Mr Zinn said.

''Consumers are simply chasing the best deal and the best service - and often these days that is found online.''

The big retailers' coalition is spending $200,000 on an advertising blitz that warns of job cuts should the government fail to act. It wants the government to either scrap the GST exemption or extend it to all products sold for less than $1000.

The Board of Taxation recommended last February that the figure not be changed.

Harvey Norman boss Gerry Harvey said many retailers were in danger of folding in coming months unless the rules were changed, while overseas businesses were getting a ''free kick''.

Melbourne billionaire Solomon Lew, who dominated yesterday's ad with more than half of the brands displayed owned by companies he or his family controls, said there would be bedlam if the policy continued unchanged.

''They just can't allow offshore retailers who don't pay any taxes in Australia, who don't employ anyone in Australia, who don't leave a cent behind in Australia, to just take the money and run,'' he told 3AW radio. He said the Tax Office was missing out on revenue that could fund hospitals and welfare.

Talkback callers vehemently opposed the retailers' idea - and 800-plus people posted comments on theage.com.au.

Yesterday, independent senator Nick Xenophon said it was ludicrous for big business to complain of an uneven playing field when it had earlier benefited from the power imbalance.

''It's like watching Goliath pretend he's David,'' he said. ''The extraordinary market power of these very businesses has put enormous pressure on the small business sector.''

Australian Retailers Association executive director Russell Zimmerman said many large companies had been slow to embrace the internet. By contrast, small retailers were using sites such as Facebook and Twitter to promote their wares.

''Small retailers are getting very savvy,'' he said. ''Retailers are going to need to look at various forms of retailing to engage with their customers.''

The flight online was just one factor afflicting the Australian retailing sector, he said, and high labour costs and soaring rents also needed review.

Assistant treasurer Bill Shorten said big business had exaggerated the impact of the GST exemption. ''Online retail sales account for about 3 per cent of all retail sales in Australia and it is estimated that between 20 per cent to half of these sales relate to overseas purchases,'' he said - meaning overseas online sales could be as little as 0.6 per cent of total retail sales.

The strong Australian dollar, consumer thrift and the aftershock of the global financial crisis were having a far greater impact, he said.

For Amanda Bajada, who owns a fashion store in Essendon, the internet has been a boon. She uses Facebook to ''befriend'' customers, upload images of new stock and spread the word about promotions.

Customers at her store, White Horse, were looking for a personalised service that was becoming harder to find at chain stores, Ms Bajada said. ''We try to present our customers with a very intimate space,'' she said. ''There's a plethora of big chains our clients can go to, but they come back to us.''

Facebook helped sustain relationships with one-off customers who then continued to order online from homes in other states, she said.

Yuko Narushima for The Age

Mac launches App Store with massive discounts

The Mac App Store has launched, freshly stocked with more than 1,000 OS X applications. The store comes as part of an OS X update, version 10.6.6, and is a standalone application rather than being yet another add-on to the already-creaking-and-bloated iTunes.

The store works a lot like the iOS App Store we know already: You sign in with your Apple ID, and then you can shop. Buy a Mac app, and the payment is charged to your registered credit card account. The app downloads automatically and is placed in the applications folder, with a convenient shortcut placed in the dock. (The icon actually leaps from the store window and lands in the dock — neat.)

This is clearly aimed at novice users who may never have actually downloaded and installed third-party software before, and the interface will be instantly familiar to anyone who has used the App Store in iTunes or on an iPad.

That said, there is plenty for power users, too. Apple’s flagship photo-editing software, Aperture, is in the store for just $80. You can still buy it from the conventional Apple Store, but it’ll cost the usual $200. That’s quite a saving.

The iWork office suite is in there, too, although it remains at the ‘09 version, not the new ‘11 update many were hoping for. The three iWork apps — Pages, Numbers and Keynote — cost $20 apiece, which is less than the usual $80 bundle price. If you already have these installed on your Mac, the App Store detects this and shows them as “installed,” just like on the iPad.

There are also free apps — the slick new Twitter, for example, which is the long awaited v2.0 of Tweetie for Mac -– as well as some old favorites: Angry Birds is quite something on a 27-inch iMac screen.

There are no trials in the Mac App Store, and submissions are subject to strict rules, just like the iOS store. It appears that some of these can be waived, though. Twitter is clearly using custom, nonstandard user-interface elements, and it is featured on the front page.

Apple is playing by its own rules here, too. No trial versions are allowed in the store, so developers have to host them on their own sites. Apple’s own trial for the iWork suite is on the main Apple site.

I predict that the store is going to be huge. It has the same kid-in-a-candy-store addictive qualities of the iPhone and iPad stores, along with a few features missing from the mobile versions. On the Mac, for example, all your purchases are listed under a tab in the top toolbar.

Finally, here’s a tip: Up in the Apple menu, on the top left of your screen, you may see a new entry called “App Store.” This replaces the old “Mac OS X Software” which has quietly been retired.

Charlie Sorrel for Wired

Collective Consumer Deals

Groupon – which offers a daily deal – has become a global phenomenon, and reportedly turned down an offer of $6bn to sell to Google. Sites such as Groupon work by sourcing a single deal at a large discount which is only available if a sufficiently large number of people in any given location sign up for it.

The two-year-old company is profitable, popular and on to a winning formula that can be executed on a large scale. Groupon proved the latter in August through its first national deal, with Gap to sell $50 worth of apparel and accessories for $25. While previously, the site was known for local daily deals with small businesses, the Gap program was a huge success.

In one day, the company sold 441,000 Groupons, netting about $11 million. At the moment, Groupon is the biggest player in this emerging space by far, but the interest from Google will no doubt spur deep-pocketed competitors to file in.

And of course there are other serious players in the group consumption phenomenon.



Jumponit.com.au offers fitness, beauty, dining and adventure deals.



Cudo.com.au is fast taking market share in Australia with a strong marketing campaign. Offering deals from kayak lessons to beauty treatments.



Allthedeals.com.au is the Google of Group buying. It puts daily and weekly specials into one cenral location. Users can click through offers from all the main players, as well as the latest catalogues from Kmart, Target, Optus etc.



Scoopon.com is probably the most contentious of the collective consumer gang at the moment. Set up by two Australian brothers brothers Gabby and Hezi Leibovitch, who were also the makers of Catch of the Day. Scoopon has in fact been causing Giant Groupon's delay into the Australian market.

In a media posting Groupon CEO Andrew Mason said: “The worldwide proliferation of Groupon clones has been well documented. One particular clone in Australia called Scoopon, created by the brothers Gabby and Hezi Leibovitch, has been making life difficult for us. Scoopon went a little further than just starting their Groupon clone – they actually purchased the Groupon.com.au domain name, took the company name Groupon Pty Limited, and tried to register the Groupon trademark (filing for the trademark just seven days before us) in Australia.”

Mason added: “As Groupon became internationally known, opportunistic domain squatters around the world started to buy local Groupon domain names, thinking that we’d eventually be forced to buy them at an insane price. In fact, we tried to do just that, reluctantly offering Gabby and Hezi Leibovich about $286,000 for the Groupon.com.au domain and trademark—an offer they accepted. But now they’ve changed their minds, and we believe that they’ll only sell us the domain and trademark if we’re willing to buy the entire Scoopon business from them.”