Bricks & clicks affecting the scuba retail environment in Australia

Australian retail heavyweights Gerry Harvey from Harvey Norman and Myer CEO Bernie Brooks have propelled the issue of online shopping in Australia into the media spotlight. Buoyed by a surging Australian dollar, unlimited access to information and prices at the touch of a keypad, Australians are now adept at and loving online shopping.

 

Is this the end of scuba retailing in Australia as we know it? What effect will this have on retail dive operations? I say, no need to worry, scuba diving is not a virtual activity, you can’t get air fills over the internet, you still can’t effectively learn to scuba dive online – you still need to learn the drills by actually training in-water, you can book a dive charter boat online but that won’t get you out to the reef or on top of a wreck.

Dive certification agencies such as SDI/TDI, SSI and PADI have offered the e-learning options for years now in the recreational diving industry; my own experiences in the vocational educational sector offer online learning such as podcast lectures, webCT and assessment options. Open Universities Australia catchcry is Study anywhere, anytime and noted institutions such as the University of Western Australia, Curtin University, La Trobe University, UniSA and Monash University are some of the signatories. Both Monash University and UWA are G8 institutions, the leading practitioners of higher education in Australia.

My employer, offers online courses providing flexible learning opportunities for students seeking alternate learning experiences who are either working full-time or living in areas not easily accessible to facilities. As a project manager leading client focused programs, I can well attest the focus of management to the success of such programs.

The academic development of the course can be done online but the actual workplace assessment is best done in the actual or simulated workplace environment, that may change as new technologies emerge but at time of writing the most effective workplace assessment is actually being there and observing the participant. No sane dive instructor would assess the skills of a student diver by viewing their first dives on a computer screen via web cam.

Online media heavyweights such as The Australian Newspaper and The Sydney Morning Herald are online, well known publications such as Dive Log Magazine can be found at http://www.divetheblue.net and one needs to ask the question “Is the internet the evil destroying lives and jobs?” How many people bank online, pay their bills by Bpay, funds transfer or even use EFTPOS? Once upon a time we all received our pay packets in cash, I wonder how many of us still receive their pay in cash?

Looking at case studies it is clear to see that these business institutions have the so called physical bricks & mortar operations. These established organisations have adapted to change and remodeled their business structures accordingly to remain competitive. Do we need to legislate against online retailers, to fight the evil of competition or do we need to respond to the operating environment and develop competitive strategies?

Gerry’s main argument are that online retailers do not pay tax for sales under $1000 but lets look further into his argument. For starters, this only applies to foreign online retailers operating outside of Australian borders. Australian online retailers pay tax on all transactions so I assume that Gerry and Bernie only have an issue with off-shore and not Australian based online retailers. The bricks and mortar business has costs such as lease, electricity, wages, insurance and these costs are all added to the cost of the product whether it be goods or services, everyone understands that. Gerry is telling us to support Australian online retailers if you must shop online.

The implementation of such a program to collect tax from international online retail sales is estimated to outweigh the actual costs of the revenue gains. The GST has been with us for more than 10 years now and one might be a little suspicious of the timing of such an opposition to online sales. Unfortunately, collecting the tax by small retailers tends to cost more to collect than the revenue expenditure achieved, so this won’t go anywhere.

Dive centres and resorts will need to adapt to the changing retail environment, online shopping in Australia is growing and will continue to grow with sales exceeding $15 billion online in 2013. Businesses and corporations not meeting the needs of the consumer will always struggle, business that innovate succeed. Do we revert to protectionism of the retail industry when the rest of Australian industry has had to become globally competitive since the 1980s?

A dive centre or resort has much to offer the consumer; it may be diver training, equipment sales, equipment servicing, dive trips or services such as air fills. Travel agents reacted to online sales by restructuring their services and targeting corporate travel and upmarket holiday packages a decade ago. Travel agents continue to survive despite the fact that consumers can now book their ticket directly online with the airline.

Still one of the leading factors influencing new diver’s choice of equipment purchase is the advice of their instructor. The instructor builds a rapport with students and many new certified divers book directly on the next course and purchase their equipment through their dive centre. A dive centre and resort always has the advantage over an online retailer with personalised service where online sales are always price sensitive.

New divers generally purchase their mask, snorkel & fins kit straight after their course and may even include a wetsuit and bag. Secondary purchases include regulator, BCD and computer and these hardware purchases are more likely to be done online than the mask, snorkel and fin kits. Consumers at this stage tend to be well researched and price sensitive as opposed to newly certified divers seeking software kits directly after certification.

Many innovative dive centres offer far more than dive courses and equipment. Dive clubs are a fantastic opportunity for newly certified divers to learn new local dive sites while under the supervision of the store divemaster or instructor. Meeting people with similar interests in diving with exposure to dive travel & interesting pursuits such as photography, videography, marine biology, freediving, spearfishing and technical diving with the friendship and social gathering are a strong factor influencing the decision to join their local dive centre club.

Certain industries have barriers to entry, they may be due to government legalisation as an operator can’t just go and start up an electricity business and sell energy to the consumer or I can’t become a doctor without the appropriate university education, internship and registration with the AMA. The recreational diving industry has no such requirements; there is no requirement that a dive centre owner has to be a dive instructor or even a diver for that matter as I know a number of dive centre owners that don’t dive and there is nothing wrong with that. It is a free and open market where competition is encouraged as the market is for the consumer – not the retailer, wholesaler or manufacturer.

The ACCC mandate is to promote competition and fair trade in the market place to benefit consumer, businesses and the community. The dive consumer has the greatest information in the history of the world at their fingertips, the internet. Despite the efforts of the ACCC, Australian scuba prices are still inflated as compared to the rest of the world, the consumer knows this as all that is required is a google search to research the best prices, specifications and availability of the product that interests them.

This has not been the case for Australians in the past in the case of the recreational diving industry, being the island that we are, we are isolated in both location and competition. Unlike Europe, we can’t just jump in a car and be in another country in a matter of hours. We unfortunately have neither the population concentration, the manufacturing base for dive equipment nor the diversity of retailers in Australia to promote the required competition.

So how does that affect the recreational dive market in Australia? An equipment manufacturer is generally focused on their core business, designing, testing, manufacturing and promoting their line of equipment. Worldwide, the Australian market was relatively small as compared to the US, Asia and Europe and a manufacturer would (not in all cases) appoint a wholesale distributor for their product in a country outside of their core market.

The manufacturer would spare the expense and risk conducting business in a country outside of its core market and still enjoy the sales benefits with the possibility of setting up a regional office should the critical sales mass be met. Other advantages may include selling older models into the Australian marketplace while releasing new models into Europe and the US during the Australian winter.

Most new products are launched at DEMA in the United States for the North American market or the Dusseldorf Boat Show for the European market, how many new products are launched in Australia? I have had representatives from a leading equipment manufacturer tell me they intend to launch a certain range in Australia 15% above the northern hemisphere price.

The isolation of Australia geographically combined with major overseas equipment manufacturers led to a concentration of products in the hands of a few wholesale distributors who were able to dictate terms to the retailers. There have been a couple of high profile cases of price fixing in Australia in regards to scuba products; one such case required the manufacturer to print an explanation in Dive Log magazine.

The big multinationals such as Woolworths and Coles-Myer dominate the retail landscape in Australia with stores such as Woolworths, Myer, Coles, Kmart, Big W, affiliated liqueur outlets and fuel. In much the same way, dive centres and resorts are dictated to by the equipment manufacturers and wholesale distributors as dive centres and resorts are relatively small and have minimal negotiating leverage.

A retailer that bypasses the local Australian supply chains and then passes the savings onto their clients, the Australian diving consumer has to be meeting the needs of their community. The issue of grey imports, better known as parallel importing has been brought to my attention while at the ADEX show in Singapore earlier last year by a dive industry participant and I am unapologetic. I have been the same question by a number of people “Don’t you know you are spoiling the market” and I always answer the same “For who, the consumer? The retailer???”

I disagree with Gerry Harvey, the internet is not new nor is it going away. The Australian workforce has been exposed to globalisation since the 1980s and workers have had to deal with international competition and it has changed the way we work. The Australian retail environment should not hide behind protectionism and tariffs as the rest of the economy is competing internationally and competitive worldwide.

The government does not need to legislate against online retailers when heavyweight lobby groups pressure on the government to protect their special interests at the expense of the Australian consumer. The Gillard government has put its case forward for a national broadband network and one would expect that despite the lack of the cost benefit analysis, the Gillard government supports e-commerce.

The Australian consumer has embraced the internet and e-commerce, regressive policies designed to stifle competition will not be tolerated by the Australian consumer. The information age is now and consumers are able to research prices overseas in countries and economies that offer far more competitive pricing than some but not all Australian retailers.

In all other forms, Australian industry has reformed to become competitive in an international marketplace; the industries that were not competitive should not be subsided by the taxpayer or consumer. The retail industry has a captive market and consumers have paid for this in the past. This will change in the future, worldwide experience indicates e-commerce activity will increase, the internet is available in Australia so these worldwide trends will be replicated nationally.

Research shows that internet sales are increasing and will continue to increase in the future, businesses that have a clear strategy to meet the changing needs of the consumer will continue to excel and business that neglect the needs of the consumer will perish. Australian dive retailers will continue to exist as scuba diving is a physical and not a virtual activity, wholesalers and manufacturers will need to innovate their operating structures to support dive centres and resorts, the supply chain is the key to the success of the retailer.

I hope that Australian consumers will support continue Australian retailers operating in both bricks and clicks type operations, should Australian retailers be uncompetitive in their pricing and service. Who can blame people seeking better conditions if Australian retailers are unable to provide quality service and competitive pricing?

The Wolf of Wall Street

I had seen the 60 Minutes interview of Jordan Belfort recently by Liz Hayes, his book had been seen perched on bookshop shelves in the business and finance sections for a number of years now. I am a reasonably frequent flyer so I spend a reasonable amount of time browsing airport bookstores for reading material. Perth, Sydney, Darwin, Changi, Manila, Dubai and London are all bookshops I searched. By lets be clear, I am a cheap bastard and not keen to spend $25 – $30 on a paperback.

Mind you, I have to fork out anywhere from $60 – $160 for a textbook, but that is meeting my educational goals, this is money going to a shyster and convicted fraudster, somewhat different to the texts I have been purchasing. I had hoped to see the movie on in-flight entertainment, yet Singapore Airlines, American Airlines, British Airlines, Qantas or Emirates have failed to play the movie. I missed my opportunity at the cinema due to heavy workloads and scheduling issues. So, since I would be travelling around Europe and the United States on a very tight budget, the book was the best alternative.

There seems to be renewed interest in Belfort’s escapades after DiCaprio’s portrayal of him in Martin Scorsese’s film of the same name. I am sure that the people who lost significant amounts of money to his lavish lifestyle would not be purchasing his book nor handing out cash to see the film. As a neutral observer, I believe royalties go to him, I would be somewhat hesitant to say the proceeds would go to his creditors though.

Wandering the streets of Budapest, we came across an open air book conference, at first we were not too interested in the books as they were all Hungarian language, who would have guessed. We were drawn to a noticeable English language section, searching through, we found Rabbit Proof Fence for Noriko, then in another pile I saw the distinctive yellow colour of The Wolf of Wall Street for 2020 HUF. A quick calculation in my head, this is cheap, I pulled out my tablet to check, I didn’t believe myself, this was $10.

I snatched the only copy and headed to the counter, I handed over two crisp 2000 HUF notes fumbling in my pocket for the 20 HUF coin, the teller tells me, no no, this book has a 20% discount and hands me change. I am dumbfounded, I am truly happy I held out, very happy with this deal. I must say, reading with extreme interest Belfort’s exploits – he is nothing more than a crass, ego-centric wanker who never really showed any remorse for the people’s lives he affected in a negative way.

Smartphones and stupid walking

A smart phone in the hands of a less than smart person, at least whilst they are firmly gripping their handset seems to be increasing; then they attempt to walk intent on tapping the screen whilst weaving down the street. This is annoying to the average pedestrian sharing the footpath, they are trying their best to navigate past their slow moving counterpart whilst they appear to be doing their utmost to impede their movement.

This is compounded at traffic crossings, our smart phone operator is usually busy updating their online status as the signal to walk turns from red to green, people are walking and mayhem takes place. People travelling in different directions collide, people trying to stumble across the road before the light turns red again – mass confusion.

I have seen smart phone users walk out on the road with a red light illuminated nearly hit by oncoming traffic with their head buried in their screen, earphones in and totally oblivious to the oncoming danger. The term situational awareness seems to be two random words forced together in the same sentence by accident.

WA Inc – a lesson still not learnt

Coming from a rich western country, corruption is something we are supposed to read about in poor developing countries – or so I thought. The Western Australian government led by the now disgraced premier Brian Burke engaged high profile businessmen in shady business deals.

I am now employed by the state government; a large portion of my retirement benefits are invested in the Government Employees Superannuation Board (GESB); a number of the WA Inc investments (and hence losses) were underwritten by the fund in the 1980s. While this doesn’t necessarily affect me now as the losses were realised in the 80s, the fund was manipulated by corrupt politicians (and their union lackies) previously and could be corrupted in the future. Brian Burke is now a government lobbyist, connected to just departed Labor Prime Minister Kevin Rudd, the former prime minister’s dealings with Brian Burke as can be described as concerning at best.

Previous Labor Prime Minister Julia Gillard is facing her own corruption inquiry, her support of disgraced Labor politician Craig Thompson on 173 corruption charges (that will not be contested) and support for her selected speaker (Peter Slipper) who is facing his own dishonesty charges sets a very low parliamentary standard.

Slipper is also facing court regarding legal action brought about by former employee James Ashby in regards to sexual harassment for vulgar references to female genitalia and grooming Ashby as a sexual partner. Julia had no issues recruiting this fool from the Liberal party as the Speaker of the House when it kept her minority government in power, no outrage about misogyny when it suits her political goals.

Corruption in the Australian Labor Party, trade unions and trade union members promoted to government positions and the Australian Council of Trade Unions is rife and still largely unaccountable. The fallout from the WA Inc days where unionists struck business deals using taxpayer money, unionists booking private bills to union credit cards and creating slush funds from union members fees to purchase private property. The corruption of the weakest members of the workforce is incorrigible.

One has to remember, the Australian Labor Party is staffed by a bunch of unionists who have absolutely no experience in business (with the exception of Gary Gray) but have illusions of grandeur of their business abilities. They have played in business with public funds and lost big time, Kevin Rudd, Julia Gillard and Wayne Swan have also played that game with the mining tax and carbon tax having had their pants pulled down, they are confused and unrepentant. If you are entrepreneurial, get in their and risk your own funds because for too long, the steady flow of funds from gullible union members have funded their ambitions.

Palau Tioman monitor lizards

Whilst on a trip to Palau Tioman, our accommodation near Ayer Batang, popularly known as ABC village is a well known backpacker haunt with numerous budget chalets. Stepping out of our accommodation, monitor lizards could be viewed sunning themselves on the rocks throughout the day – it was great.

I was surprised at the number of monitor lizards spotted around our accommodation, they are really interesting creatures, not acting in an aggressive manner at all. I have spent a fair amount of time working in central Australia finding the large lizards to be somewhat territorial at times. I was able to get really close to photograph these wonderful reptiles while they remained relaxed in human presence.

Critical Perspectives on Management dinner in Madrid

As fate would would have it, I would be I Spain when a post course dinner and get together is announced for Critical Perspectives on Management; the first foray into the wonderful world of Cousera for IE Business School, the Madrid based private higher education provider.

For an online class with thousands of students spread across the globe, the prospect of only eight people attending seems somewhat anti-climatic, it isn’t, it makes the dinner more intimate. This has been tremendous advertising for IE Business School. I was interested to speak to filming director Phil who would also be attending, we will see from his perspective how the class ran and his views on the final product. I am extremely interested to see how this has translated into enquiries and ultimately enrolments into this prestigious business school.

Not only does the IE Business School regularly rate highly with the international face-to-face full-time MBA; the blended delivery executive MBA and global MBA requiring substantial online components and attendance in cities of Madrid, Singapore, Sao Paulo, Shanghai, Boston/New York and Providence. The Coursera class is an actual class run in their MBA program, we took the full Critical Perspectives on Management class in its entirely, just as it would be done as a fulltime face-to-face student attending IE Business School.

According to Rolf, if students do not understand or grasp a concept in his class, he tells them to go and review the Cousera video. Also interesting was the fact that the highest score was 78%, about 7200 took the final exam with about 5500 people passing. Rolf said that he has incorporated elements of the online class into the fulltime examination making the fulltime examination more difficult. That was interesting, we had already seen the course content and now I know I passed a similar examination the IE Business School offers.

For my part, I only sought out the class for my close friend and partner; only joining her at the last moment to provide feedback and consultation building on the foundations of her mini-MBA she undertook a couple of years back. I quickly found this online offering to be very interesting, informative and challenging – I was hooked. Unfortunately, she was unable to be in Madrid at this time due to her work commitments and she was more than a little annoyed that I made it and she didn’t.

Thanks to Mecky, I took the time to complete the unit, I was busy with my graded university course finding it difficult to find time to watch the online lectures, undertake the required readings, quizzes and final exam. Throughout, we were busy discussing the course content, principles, helping each other out and generally supporting our endeavors to learn the material. The course run by Rolf was so much more interesting than my change management class, more effort was put into that than actual university class.

No smoking

On a jeepney ride when in Olongopo diving, I had to laugh at the no smoking rules and fines. Firstly, you will normally find the driver hunched over the steering wheel peering through a windscreen littered with all types of advertising junk with a cigarette hanging out his mouth.

Then when you view the fines, 1000 peso for the first offence, 5000 peso for the second and a whopping 10,000 for the third offence. All is not lost because students, senior citizens and the disabled all receive a 20% discount. I am really not sure how this is enforced, surely this would need a fine to be issued by the police, they would be the only ones with the power to issue and enforce fines. Not that you would mess with the Philippines police, since Duturte’s war on drugs, people have dragged into a back alley and shot, there are no repercussions. That will not help the senior citizen or student discount for multiple offences.

Waiting for uni results

For me, the wait is over, uni results posted and I am unhappy again. Planning long service leave saw me firstly select a unit with a written exam, ok, buggered up, unenrolled and selected a unit requiring assignments, case studies and projects for assessment instead. This way I could rush through, finish early and head off for three and a half months break, no supervised exams to attend. Logic sound flawed – ah, yeah.

Ok, I submitted three weeks early, rushing through and not following the program. I have become arrogant in my preparation, accustomed to credits as a standard mark, if I prepare better, I get better results. I took two units, actually difficult when working full-time, then there was the medical procedures, a heart catherisation and knee investigation. That cost plenty of money and burnt up finances rapidly – a different kind of pain.

So where did I go wrong? Arrogance, yes – absolutely, poor preparation – yes, not following the program – yes, attitude – again yes and finally medical distractions. I would like to say yes to medical distractions, but then I will make the same mistake after my intermission. A contributing factor, sure, stress at work also but that didn’t affect the result. I had a small business, I was marketing that product, I knew the course material, I should have easily passed, I have applied that discipline in the workplace.

The question then needs to be asked, did I apply marketing solutions in the workplace context to a competent level? I would say yes, however, I was more concerned with business plans, strategy, HR and operations more so than marketing the business. Of course, spending a fair amount of time with clients, creating marketing materials and presentations.

The benefit of a university education is to be exposed to the principles, methodology and process of developing high quality strategies receiving feedback from a quality source. After all, anyone can go out and purchase a textbook and make a start for themselves, constructive feedback is what makes higher education worthwhile. The real outcomes of the unit was to create an integrated marketing mix, analyse feedback and improve results, did I really achieve the course goals? I did actually deserve the mark I was given despite my annoyance, I passed but wasted my money as I didn’t learn what I was supposed to learn.

The lure of online learning

I have had to put up with wankers at work with their dismissive attitudes and their petty university snobbery. Coming from a technical trades background and working my way through the ranks, at age 44, I finally gained a university degree, a major bricks and mortar establishment mostly done online. Not that has ever really been an issue, my technical expertise has been more than generous supporting a reasonable lifestyle, life could be better or worse depending on your outlook – no complaints. But as you get older, less hands-on is desired and the step from supervisory to management level is warranted.

The federal government opened the higher education market setting targets of 40% of 25 – 34 year old workers holding a bachelor\’s degree by 2025. I wanted to make sure that while I had plenty of on-the-job experience, I wasn’t going to be automatically overlooked for positions because I didn’t meet the selection criteria. Even though at 2025, I will be nearing the end of my working life. You have to keep pace, the job market is changing and you need to remain contemporary, being seen as a first adapter is important for new technologies and methodology. 

Harvard University and the Massachusetts Institute of Technology are now offering online courses through edX, two of the most prestigious learning institutions in the United States have now gone online. Berkeley in California, Ecole Polytechnique Fédérale de Lausanne and McGill in Canada are world renown institutes worldwide have also signed to edX.

This is fantastic, this legitimises online education, leading educational institutions are rewarding first adapters utilising the skills of their best and most innovative professors. One imagines, these institutions want to ensure their best talent is on show, not handing off development to adjunct lecturers reaffirms their commitment.

Richard NG and Daphne Koller from Stanford University, teamed up with the University of Pennsylvania, the University of Michigan, and Princeton to offer high quality free online education. Coursera is a for profit organisation though, I presume revenue is gained through sale of course verification certificates, I am even unsure if graded assessment is offered or just a pass/fail. I have undertaken my first offering at Coursera, so far it looks pretty good but lets see.

Udacity is the third major provider; I had a short look at their course offerings and are yet to commit to any, one suspects they will be aggressively expanding in the future. The future on online learning is looking bright, with the universal acceptance of online courses, current and potential employers should credit this as a legitimate form of learning.

Deleted from social media

I have read a number of articles regarding deleting certain people from friends lists on social media; why you should do this and how to react when you meet up with them and they question your decision and display hostility towards you.

But what if you are the one being deleted? I was not in the cool group at school; being somewhat of an outsider, you build up a fair degree of resistance to rejection, if you let it affect you, it becomes all consuming. You ask a girl on a date, she says no, you need to move on pretty quick, sooner or later, you will get your first yes, maybe even a second or third. I have been deleted on social media on numerous occasions and I couldn’t really care.

The emphasis of many social media articles has been on why you should cull and delete people; however, what does this really say about the person deleting you? As it can only be used as a weapon against you if you care, what statement are they trying to make about themselves? They are expecting you to be hurt and upset, if you are not, then the power returns to you. Should you have been online friends with them in the first place, or friends at all? Let’s face it, they have done you a favour.