While they may best be known as a tech retailer that has been servicing Aussie offices for more than 35 years, Harris Technology (ASX: HT8) is expanding into household products with the launch of their new HT Home store to substantially increase their online retail exposure.
HT Home is an online store dedicated to the Household category of products, but it is also the first new channel launched by Harris Technology since they re-developed their flagship HT platform last year. When designing the eCommerce platform, it was built as a modular structure where the Company could quickly launch new online stores at minimal cost and in just a fraction of the time as new website builds. The platform also enables Harris Technology to quickly list products, which can be rapidly replicated onto major online marketplaces such as Amazon, eBay, Catch, Kogan and more.
The full launch of HT Home comes after a 9-month trial where Harris Technology partnered with local importers to sell a limited range of household products through online marketplaces. With encouraging results, including $311k in sales over the past three months with no advertising spend, the Company has launched HT Home as their own channel which now has more than 2,200 products listed that are commonly found in Australian homes.
“Adapting to changes in the eCommerce sector, Harris Technology identified this opportunity for Household products as a category that has been underserved by online channels,” said Harris Technology CEO, Garrison Huang.
“Since commencing our trial in September 2021 of products commonly required in all Australian homes, we have been pleased with the sales.”
Expanding into the Household category has been part of Harris Technology’s broader plans to diversify their inventory away from pure reliance on technology product sales. This saw the Company recently execute an extensive review of all tech products sold through their channels to reduce exposure to underperforming products. Margin on sales and inventory hold times were key criteria in the review where the Company has flagged its intentions to increase the overall margins, having generated $50.4 million in sales across FY22.
“Increasing sales from our own channels is one of our strategies to increase the overall margin so we are very excited to launch HT Home as the newest channel of the Harris Technology eCommerce network,” added Huang.
Many of the household products sold on HT Home are similar to those that customers might find in variety stores, such as The Reject Shop (ASX: TRS) for example. For the half year ended 31 December 2021, The Reject Shop reported $424.6k in sales. Of that, $244.9k was attributed to ‘Cost of Sales’, indicating a sales margin of 57.6%.
Further cost of doing business included $134m in Store Expenses, and $20.7m in Administrative Expenses, contributing to $15.4 net profit after tax for the half year.
Unlike the Reject Shop, Harris Technology is a pure-play online retailer with no physical store fronts, selling solely through online channels.
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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