If you haven’t heard about Black Friday and the insane amount of online shopping that it brings, you will by the end of the week with Australians set to do a chunk of their Christmas shopping in a spending spree that Harris Technology (ASX: HT8) is ready to fulfil following their major facilities upgrade.
A retail holiday which since 2005 has been the busiest shopping day on the calendar in the United States, Black Friday has steadily infiltrated Australia in recent years. This has been primarily driven by Amazon which entered the Australian market in 2017.
Since then, Amazon has been the face of Black Friday sales in Australia with their prolific advertising and heavily discounted goods, particularly technology products. Fearing they will lose market share from retail customers, traditional Aussie retailers have now caught on to offer their own Black Friday discounts but few can match the Amazon powerhouse.
While thousands of Australians will log onto Amazon to take advantage of their Black Friday sales and have all the goods delivered in time to be gifted for Christmas, there is a high probability that they’ll actually be buying from online retailer Harris Technology.
Without any physical storefronts, Harris Technology is one of the biggest tech retailers within online marketplaces like Amazon, eBay, Catch and more. They’ve been the Number 1 seller on Amazon Australia since 2020 where they have 100% positive feedback over the past 12 months from over 4,000 customer reviews.
“Preparing for heightened online traffic, we have increased product listings for the promotional period that will leverage our high seller ratings on each marketplace,” said Harris Technology CEO, Garrison Huang.
“This spike in online traffic should create new opportunities for Harris Technology to benefit from basket bundling and one-click checkouts supported by healthy stock holding.”
Unlike traditional retailers that have been undergoing supply chain problems through the pandemic with delivery delays, Harris Technology has thrived and continued to invest in its inventory. By securing more inventory, the Company has been turning it over faster than ever which resulted in a new sales record for the September Quarter when generating $15.1 million in sales, a 54% increase on the previous year.
So busy have they been over the past 18 months, Harris Technology has just upgraded their warehouse facility which has consolidated three smaller warehouses into one larger complex.
“This facilities upgrade signals the next phase of growth for Harris Technology as the only ASX-listed pure play online tech retailer that continues to capitalise on the cultural shift towards online shopping as the preferred retail medium,” said Huang.
“Our new facility comes with at least 50% more inventory capacity than our old warehouses combined. This capacity provides Harris Technology with greater flexibility and buying power relative to volume deals.”
Highlighting how quickly Black Friday and Cyber Monday are growing, in 2020, independent sellers on Amazon generated more than USD $4.8 billion in worldwide sales from Black Friday through Cyber Monday, a 60% increase on 2019.
Given that 83% of Australian households partook in online shopping during the pandemic, participation in Black Friday online sales is expected to accelerate further this year with Harris Technology’s products featured prominently across all marketplace channels.
To ensure they can fulfil the flurry of orders they will be getting over the next 7 days, Harris Technology increased its inventory holding to be holding $12.6m in goods at the end of September. The 18% increase from June was funded from free cash flow while delivering an additional $0.5m positive net cash flow for the Quarter.
With that stock on hand, and millions of dollars to be spent by marketplace owners to bring online traffic to Harris Technology products, it’s going to be a busy week for the Number 1 ranked seller on Amazon Australia.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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