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NEWS
RetailVision: Fall Success Builds Momentum for Spring
By
Dennis Masella
Vice President, Channel Events
Gartner Vision Events.
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Another RetailVision has come and gone. Based on comments from many of the Vendor and Retailer participants that I spoke with, RetailVision Fall 2003 was a very successful Event. A number of factors gave the Event renewed energy and excitement, including the incredible JW Marriott resort in Phoenix, and new features such as the Self-Scheduling System to set up one-on-one meetings online. Because activity in the consumer channel is so closely tied to national and world events, it certainly helped that this RetailVision did not coincide with the outbreak of war (as it did last Spring), and that the economy is looking better than it has in the past couple of years.
But it's the human element that continues to have the most positive influence on the Event, and I would like to take a moment to point out and thank a number of people that have been helping to guide the revitalization of RetailVision from behind the scenes. First of all, thank you to all the members of our Advisory Board. A well kept secret, the Advisory Board is comprised of industry luminaries who now focus on strategic industry issues to keep RetailVision relevant and dynamic.
These industry leaders include:
Kathy Kolder - Fry's
Bob Gundersen - Best Buy
Jim Pedranti - Altec Lansing
Dave Nalley - Ingram Micro
Adam Levin - Levin Consulting
Ellen Miller - Insider Marketing
Steve Schiro - Microsoft
Kevin Jones - Micro Center
The Advisory Board has slowly and steadily helped us change direction over the past two years. Of course, we all know that major industry events - like big ships -- don't turn in new directions easily, and it's a tribute to the vision and spirit of the Advisory Board that the RetailVision course is now corrected, and future events will reflect the success we all experienced this Fall.
Speaking of course correction, we recently formed a Steering Committee of Vendors, Retailers and partners who spend their time in the trenches of RetailVision. The Steering Committee has been instrumental in enhancing our agenda and on-site activities, and making sure that everyone's time is maximized.
Thanks to the Steering Committee consisting of:
Pat Barron - Micro Solutions
Margaret Fergon - RadioShack
Barry Levin - Levin Consulting
Patrice Sklencar - Ingram Micro
Bruce Koenigsburg - Koenigsburg & Associates
Jeannie McNichols - Imation
Maurice Mizrahi - DigiPower
Mark Kelley - Lowepro
Mike Ehlenberger - Actiontec
Here are just some of the issues and results brought to light by the Advisory Board and Steering Committee:
Issue: Self-Scheduling System is on target in concept, but needs to be more user friendly.
Result: The Self-Scheduling System is being redesigned with a new look and feel.
Issue: Vendors need a tool to better identify the Retailers (individuals) that buy their specific products in order to maximize the effectiveness of the Self-Scheduling System.
Result: The registration systems for both Vendors and Retailers will include a product focus survey, which will capture specific product information for both Vendors and Retailers. This information will be used in the Self-Scheduling System so that Vendors can search for the appropriate buyers for their product to request meetings and so that Retailers can search by product to identify new Vendors.
Issue: Venue selection - All agreed that the resort setting provides a great environment to conduct business.
Result: Future site selection will focus on resort settings whenever possible.
Issue: Audience (Retailers) - Fall 2003 had a very strong showing with a focus on the Top 25 Retail Organizations.
Result: We will continue our recruiting efforts and will continue to develop programs to attract more Decision-Makers from leading Retailer organizations.
Issue: No Friday Boardrooms worked well - allowed for all sessions to be before voting for the "Best of RetailVision Awards".
Result: We will continue with the two days of boardroom meetings.
Now it's onto Southern California and RetailVision Spring 2004. As we work towards next year's Events, we welcome any and all suggestions from the retail community. We listen closely because, at the end of the day, RetailVision is your Event, and its value only increases when it reflects your input. Drop me a line and let me know your thoughts.
Dennis Masella
dennis.masella@gartner.com
If
we missed you and you would like to be included in an upcoming
issue of ChannelMedia please contact Keith Newman at knewman@sbcglobal.net
or our Chief Correspondent and columnist Steve Cross at steve@crosschannel.com,
702-492-7472. Also, see Steve’s column at the end of
this newsletter.
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NEWS
Wanna Connect?
By:
Keith Newman
Editor of ChannelMedia |
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Ever since Intel launched its all-encompassing Centrino marketing campaign and I went wireless, I've been giddy about WiFi. Having web access anytime, anywhere was soaring toward reality. At least, so I thought. Turns out there are issues. Mind you, the biggest issues aren't what you would expect. The technology, access, security, cost and reliability are NOT the issues. The issues, however, include: 1. We, as an industry, are doing a good job of confusing customers; 2. Not everyone wants to be wireless all the time, leaving a larger cost burden with those of us who think we GOTTA HAVE IT.
Anyways, I recently moderated a panel on the topic at a CEA Executive Conference and walked away sober and my hopes somewhat muted. Todd Thibodeaux of CEA has done an amazing research study on the topic and found technology is present, price is not a huge factor and set-up is not even a big deterrent. The problem is, really the benefit is NOT as great as I would've expected and primarily because we, as an industry, have NOT been selling benefits. Big surprise, we've grown up on speeds and feeds and continue selling as if everyone is an early adopter (read: Geek). One of Todd's key points: "Consumers need a better benefit argument. More emphasis should be placed on the entertainment devices which are starting to support USB-based networking products which can be used with WiFi. For example, a Tivo can be used as a media center accessed through a home network. Consumers see it as a great way to connect things in the house. They need to be assured WiFi can play a role beyond the PC in the future. It's amazing, everyone really does want to be connected almost all of the time. The choice to access that connection (communicate) is another story. Good Selling!
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NEWS
Retail Digest: CompUSA, Online-Store Pick Up Relationships, Wal-Mart
By:
ChannelMedia Staff
- Mexican billionaire, Carlos Slim, cut his holdings in Circuit City Stores after the Retailer rejected his $1.5 billion takeover offer. Slim, Latin America's richest man, reduced his stake to 15.1 million shares, or 7.2 percent, from about 19.1 million, or 9.2 percent, of Richmond, Virginia-based Circuit City in June, according to a Securities and Exchange Commission filing. The sale may indicate Slim, 63, is abandoning efforts to take over Circuit City to combine with CompUSA, which his Mexican retail and restaurant chain bought three years ago, said analysts such as Michael Via at Anderson & Strudwick. Arturo Elias, Slim's spokesman and son-in-law, said he wouldn't rule out another takeover bid. ``We always maintain the right to pull out or to buy a larger stake,'' Elias said in a telephone interview from his Mexico City office. Slim in 2001 sold his entire 6 percent stake in Circuit City before later boosting his holding. Tony Campbell, who helps manage assets including Circuit City shares at Knott Partnership LLC, said he expects Slim is still interested in buying the company to combine it with CompUSA in a bid to better compete with Best Buy Co., the largest U.S. electronics chain by sales. Slim and his family hold equity stakes in Mexico and abroad worth about $12 billion. They control companies including Telefonos de Mexico SA, Mexico's dominant fixed line telephone company, and America Movil SA, Latin America's largest wireless phone company. Circuit City in June rebuffed Slim's offer of $8 a share, saying the bid was too low. Circuit City's shares climbed as high as $11.35 on Sept. 19 after Elias said Slim was considering whether to make a new proposal. Circuit City spokesman Bill Cimino declined to comment on Slim's stake. Slim's Grupo Sanborns SA acquired CompUSA for about $800 million in 2000.
- Amazon.com reported a 33% year-over-year increase in third-quarter net sales to $1.13 billion from $851 million. It also reported Q3 operating income of $52 million, compared to a loss of $10 million a year ago, and net income of $16 million, compared to a year ago net loss of $35 million. Amazon says it expects strong sales to continue, driven partly by its free-shipping offers, and to produce record sales in the forthcoming holiday season. "Thanks to free shipping and low prices, we expect more customers to turn to us for their holiday gifting needs this year, producing our biggest holiday shopping season ever," said founder and CEO, Jeff Bezos. Amazon also said Q3 worldwide unit sales grew 36% year-to-year, and that third-party sales of new, used and refurbished items rose to 22% of worldwide unit sales, up from 17% a year ago. Amazon said it expects fourth-quarter net sales to rise 23% to 34% year-over-year, to a range of $1.76 billion to $1.91 billion. Full-year net sales are expected to reach a range of $5.75 billion to $6.25 billion.
- Wal-Mart said October same-store sales are tracking its 3-5 percent target growth range. In its weekly recorded sales update, the world's biggest Retailer said it is still pleased with Halloween sales. Above-average temperatures in the past week drove sales of warm weather goods such as house and garden products, paint and accessories and automotive goods. The strongest categories for the week were electronics, toys, pharmaceuticals, household paper and food, while the strongest U.S. region was the east coast.
- According to the latest Retail Ratings Report from BIGresearch, when purchasing electronics, an increasing number of consumers are less concerned about where they shop than they are with finding value. In the September 2003 Retail Ratings Report, consumers were asked, "Where do you shop most often for electronics?" Of those surveyed, 22.2 percent said they had "no preference." That number is up from 13.7 percent in Sept. 2002. "The products in this category are very much the same between the Retailers," said Gary Drenik, CEO of BIGresearch. "Consumers seem to be opening their Sunday circulars and picking the Retailer with the best deals, not worrying about which Retailer that might be." One aspect of that report is BIGresearch's Consumer Equity Index, which measures a Retailer's growth or decline in Consumer Preference Share on a year over year basis. To calculate a Retailer's CEI, the current year's Consumer Preference Share is divided by the previous year's. Consumers surveyed chose Best Buy, Wal-Mart and Circuit City as their top three electronics Retailers, with 25.9, 19.1 and 8.7 percent respectively saying they shop most often there. On the flip side, those same three Retailers lost the most consumer equity from Sept. 2002 to Sept. 2003. Circuit City's CEI fell 1 point for an index of 89.69 while Wal-Mart dropped 1.2 points to an index of 93.91. Best Buy's index was 94.45, down 1.5 points from September 2002.
- Computers top the "must-have" holiday wish list for teens this year, according to results of the recent "First Annual Youth Holiday Purchase Patterns" survey conducted by the Consumer Electronics Association (CEA). Game consoles, cell phones, portable CD players, and portable MP3 players round out the teens' top five most-wanted consumer electronics gifts. This marks the first time teens age 12-17 were surveyed as part of CEA's annual holiday shopping consumer research. "The feedback from today's tech savvy and influential teenagers are important to us and our members," said Gary Shapiro, President and CEO of CEA. "This survey is one of many initiatives we are using to reach out to teens and reiterate the fun and educational benefits of consumer electronics. As expected, the results reflect how teens are actively embracing a wide array of technology and that they recognize technology influences almost all aspects of their lives." In addition, the survey shows that teens plan to purchase portable CD players as a gift to others (49 percent) this holiday season. Other products targeted for gift giving include game consoles (35 percent), cell phones (30 percent), hand-held game systems (28 percent) and portable MP3 players (27 percent). Just over half of the teens surveyed (51 percent) said they were planning to pay for all or most of the gifts with their own money.
- Although only half of stores surveyed had online-ordered products available for same-day pickup, multi-channel Retailers are showing strong execution of in-store pickup services, according to a study by The E-Tailing Group, Inc. Circuit City and Sears are among the other surveyed Retailers due to their personalized service, it says. "Overall we found that this feature was very well executed," said Lauren Freedman, President of The E-Tailing Group, which surveyed ten Retailers. She added that Retailers' pick-up locations were clearly designated, and that pick-up transactions typically took under five minutes to complete. For 9 out of the 10 Retailers surveyed, she added, ordered items were readily available at the pick-up area as scheduled. Among Circuit City's strong points: Merchandise was ready for pick-up the same day; dedicated staff processed pick-ups; the store pick-up area was easy to find; and it allows 14 days to pick up merchandise. E-Tailing cited Sears for the self-service kiosk it provides in the customer pick-up area. After the customer types in her phone number, a screen shows the order to be picked up. When an e-tailing researcher tested the system, the kiosk noted on its screen that the order would be ready in less than five minutes and promised a discount on a future purchase if it took longer than 5 minutes. "The associate came out less than four minutes later with the item," E-Tailing says. It adds that Sears had e-mailed an order confirmation explaining how to pick up the order with detailed instructions on how to use the kiosk.
- According to new data from the 2003 American Interactive Consumer Survey conducted by The Dieringer Research Group, the Internet continues to show multiple signs of maturing into an essential product information and shopping channel, based on 2,000 telephone interviews with consumers completed in May. For example, nearly half of all American adults say they looked for product information online in the past year, totaling more than 103 million shoppers. Of these, nearly three out of four used search engines to find products. The study finds that when it comes to actually making purchases, the Internet still lags behind traditional mail order, with only 32% of Americans having purchased directly online, versus 38% who made purchases from mail order catalogs the past year. However, the average number of online transactions per year of online purchasers is three times the average number of transactions per year made by mail order shoppers, thus increasing the overall value of the online purchasers. Overall, the number of hyper-shoppers now totals 23 million Americans who spend $500 or more both online and offline after first seeking product/service information online, up 50% from 2002. Hyper-shoppers are predominantly male, college-educated and married. Most work for smaller businesses. Use of high speed broadband access from home is popular among hyper-shoppers, 44% of whom say they go online via cable modem or DSL services from their phone companies. Hyper-shoppers rate Web sites as their most valuable way of obtaining product information.
- While online retail sales have grown over the year, says BizRate, the average amount spent online per person has declined between Q3 2002 and Q3 of this year -- from $145 per person to $123 per person. BizRate attributes this decline to the growing trend of comparison shopping online. 96% of online buyers in September said they comparison shop online most or all of the time.
- Sony detailed plans for a much-anticipated all-in-one, handheld gaming device that includes a digital music and video player and could even act as mobile telephone. Officials of the world's largest consumer electronics maker also said Sony would launch a rival to Apple Computer Inc.'s iPod digital music player next year for as little as $60. Sony described a prototype for its PSP gaming device -- due out before the end of 2004 -- during a presentation to U.S. investors that reiterated plans to restore profitability at the company. "PSP will be the Walkman of the future," declared Ken Kutaragi, Sony's Executive Deputy President and head of its gaming business, comparing a PSP prototype to Sony's highly successful earlier generation of music players. PSP is designed to rival Nintendo Co. Ltd's Game Boy handheld game player, mobile phone maker Nokia Oyj's N-Gage wireless gaming device and Apple's iPod and iTunes music download service. Sony plans to eventually add telecommunication features, Kutaragi told a news conference afterward, lending credence to speculation PSP devices would also serve as mobile phones. REUTERS
- Retail Forward projected that online retail sales in the US would reach $17.5 billion in Q4 2003, the holiday season. eMarketer expects online retail sales in the US to reach $55 billion by the end of this year, whereas Jupiter Research anticipates online retail sales will grow to over $94 billion this year.
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NEWS
Q&A with Christina Seelye
CEO - Elibrium
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Q Give us some background on this fantastic new, "hot" software company?
A Although our publishing model is new, Elibrium has been within retail for over 16 years. There have been a few name changes along the way, but most people more closely identify our past from our original name of MySoftware. Our traditional titles stem from the MySoftware line of business and personal productivity products. The new and hot part of our company comes from our successful approach of publishing non-Elibrium titles and bringing those titles to the Retailers and their customers under the Elibrium umbrella.
Q And you have sort of a hybrid model. Can you break it down for us?
A There have been and are a handful of companies that publish their own products and also bring outside technology and software to the retailers through a publishing model similar to ours. So in that area, we are not truly unique. However, what makes us stand out above our competition is our ability to keep an open door to and from the European, Asian, and South Pacific markets. We have partnered closely with Avanquest. Avanquest is a tightly knit network of 9 international publishers who work close together to promote their leading products to markets outside of their own core competencies. This allows Elibrium to pull new, hot and proven titles from these countries more quickly and easily into U.S. retail than others in our field. This also benefits our publishing partners in getting access to these markets through Elibrium and not having to individually deal with several international publishers.
Q So what is your push product for Q4 and how does it fit in with your model for 2004?
A We are having tremendous success with a product called GhostSurf Pro. The main feature is that it allows the user to anonymously surf the Internet and not leave any traces of where they have been by blocking their IP address. It also protects the user from not picking up unwanted cookies and has the additional benefit of blocking pop-up ads. Retailer and customer acceptance of this product has exceeded our early expectations. GhostSurf Pro and Ella for Spam Control - an intuitive Spam and e-mail routing software - are the model examples of what fits best within our model and goals for 2004. They are products that are easy to understand, fit into an existing category, and have technology that outpaces the competition. Both products fit the needs of both the business and consumer customer, which also allows the Retailers the benefit of not alienating any of their shoppers.
Q What are you looking for from the retail channel? And what can they expect from you?
A We will continue to ask for the warm support that the retail channel has already given us as we further improve on our publishing business. Some of our top selling published products have come from within the retail channel - something that we are very proud of as a testament to our successes. The retail channel can expect to see Elibrium become more engaged in strategic partnerships with existing publishers who are trying to better define their retail strategy. Also, as our product categories widen and deepen where appropriate, the retail channel, particularly the Retailers, will see us present products that are more targeted for their customer base and customer acquisition initiatives. With our publishing model and goals for 2004, Elibrium is poised to become a much stronger company and partner and we will continue to support the sales and marketing efforts and product needs of our retail partners. |
NEWS
RetailVision Spring 2004: Retailers Lining Up as Momentum Builds
By Pete Prentice
Event Director
RetailVision
In the retail industry, one of the surest indicators of a hot product is heightened buzz and a frenzy of pre-ordering long before the product is scheduled to hit the shelves. Such is the case with RetailVision Spring 2004 - taking place April 26-29, 2004 at the Hyatt Grand Champions Resort and Spa in Indian Wells, California.
America's leading Retailers are already lining up in dramatically increased numbers to participate - and we're still nearly half a year away from the Event! New Event features, including some totally cool technologies, are taking Vendor-Retailer interaction to an even higher level. And it's all going to take place in a 4-Diamond Southern California resort that may set a new "wow factor" for Event venues.
Yes, I'm pleased to report that there is renewed interest, energy and activity surrounding RetailVision. This Fall's Event in Phoenix attracted 180 top 100-level Retailers, the vast majority of whom were senior-level Decision-Makers. We saw a significant rise in the number of new Vendors participating, as well as in the number of new products on display. As a barometer for the consumer channel, RetailVision Fall reflected a reenergized industry. Now that momentum carries over to our Spring program.
136 Retailers (and counting!) already confirmed
This is the really big news - 136 top Retailers are confirmed for the Spring '04 Event, and official invitations haven't even gone out yet. This is in large partly due to the hugely positive response from the Fall Event, as well as recognition from the general Retailer community that RetailVision Spring needs to be on their must-attend list. Below are the confirmed Retailer companies so far.
4Sure.com
A&B Sound
AAFES
ABC Warehouse
ABS Computer
Amazon.com
America Online
At Computers Plus
Baillio's
Best Buy
BJ's Wholesale
Boise Office Products
BrandsMart USA
Brick Warehouse
Buy.com
Campus Retail Canada
Circuit City
Columbia Photo & Electronics
CompUSA
CompuSmart Edmonton
CompuSmart Montreal
Computer Renaissance
Costco
DataVision Computer
Datel Systems
Dell
Digitally Unique
Ebay
Ebuyer
The Computer Store
TigerDirect
Walmart.com
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Eurpac
Fry's Electronics
Global Computer
Harmony Computers
Hartco Enterprises
Harvey Norman Australia
Home Shopping Network
Insight
J&R Music and Computer World
Kmart
London Drugs
Micro Center
Microsupply
Nebraska Furniture Mart
Office Depot Canada
OfficeMax.com
PC Club
PC Connection
PC Mall
PC Universe
Quill
R.C. Willey
RCS
RadioShack
RadioShack Canada
Scholastic
Staples
Staples - The Business Depot
The Apple Store
Westworld Computer
Wolfe's Camera
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Self-Scheduling System getting major upgrade
The Self Scheduling System is the latest RetailVision innovation, an opportunity for Vendors and Retailers to set up One-on-One meetings online. This Fall, over 1500 meetings were set up on the system! But in our non-stop pursuit of perfection, the Self-Scheduling System is "in the shop" getting a face lift. The result will be easier navigation, more intuitive flow, and a real "turbo charger" that enables Vendors to identify buyers by PRODUCT - i.e. keyboards, monitors, etc. We think that this breakthrough new Product Searchis an enhancement worth the price of admission all by itself.
Super Southern California Resort
The Hyatt Grand Champions Resort and Spa in Indian Wells, California is an absolutely spectacular setting for RetailVision Spring. We thought we raised the bar with the JW Marriott Resort and Spa in Phoenix, but this may be even better. We are also scheming up fun and exciting themes for the social functions. We admit that trying to figure out how to "one up" this Fall's Rodeo Welcome Reception is pretty tough -- the mechanical bulls were a hoot! We're toying with the idea of a Carnival theme …can you say Full SCALE Bumper Car Ride?
It all adds up to an Event you can't afford to miss. And I didn't even mention the Private Boardroom Appointments, Theater Presentations, incredible content in the Industry Insight
sessions …
Vendors interested in previewing the confirmed-to-date Retailer list for RetailVision Spring 2004, as well as discuss participation opportunities, should contact:
For general Event information, visit www.retailvision.com.
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RESEARCH
Vendors Tap Media Center PCs for Upcoming Holiday Season
By:
Toni Duboise
Desktop PC Analyst
ARS Research
Like athletes preparing for the post-season, PC players are now vying for position in the all-important Q4 holiday shopping season. In the absence of a showstopper or "killer app" for the forthcoming 2003 holiday shopping season, manufacturers are focusing on one of the few nascent PC products that has actually performed better than expected during the past year - the Media Center PC. Despite the skepticism surrounding the initial Media Center PC premiere on October 29, 2002, an estimated number in the tens of thousands of Media Center PCs have shipped since inception. Of late, the Media Center PC movement has been fortified with an enhanced version of Microsoft's Windows XP Media Center Edition OS coupled with several new hardware releases by longtime OEM partners such as HP, Gateway and ViewSonic; and new PC heavyweight partners - Dell and Sony - who have joined the Media Center PC family just in time for pre-season.
For novices in the Media Center PC arena, these computers emerged last year as a digital hub device designed to provide central storage, manipulation and an access point for the infinitesimal number of digital photograph, video and music files accumulated by today's increased audience of digitized PC+ consumers. With the multimedia-centric interface offered by Microsoft's then new operating system, Windows XP Media Center Edition (MCE), the Media Center also commingled the aforementioned digitally enhanced computing applications with Tivo-like television capabilities into one cohesively wired, remote controlled unit.
All of the most recent Media Center PCs emulate the same objectives presented by the initial batch of Media Center machines. The newest enhancements began with Microsoft's second release of the digital media-centric Media Center Edition operating system. The new OS shed its code name "Harmony" and was officially launched as "Windows XP Media Center 2004" on September 30, 2003. The specific component improvements of Windows Media Center 2004 over the original 2002 version includes faster boot-up performance, digital photo editing (rotate, zoom, red-eye touch-up, etc.) and printing capabilities, expanded CD burning abilities, controllable FM radio access, and improved slide-show viewing. In addition, there are a number of on-demand content providers such as CinemaNow, Movielink, Napster and PrimeTime Deluxe allowing access to digital video and music for downloading or accessing through the Internet. The only hardware dependent attribute is the FM tuner, which is built on top of the TV Tuner supplied by the OEM Vendor. All features can all be executed via remote control.
To further its cause for this borderline convergent marketplace, Microsoft has waived the traditional OS upgrade fee and has chosen not to charge OEM Vendors for Windows Media Center 2004 upgrades. OEM Vendors, on the other hand, may choose to charge a nominal fee for existing owners of the original Media Center Edition OS.
As mentioned previously, Microsoft's new OS announcement was accentuated by the Media Center PC inauguration of Dell and Sony. Direct giant Dell chose an almost effortless approach and simply incorporated Microsoft's next-generation Windows XP Media Center 2004 operating system within its existing line of Dimension desktop products instead of committing a brand new chassis design as it did last Spring with its game-centric Dimension XPS introduction. Microsoft's new Media Center OS is available within the Dimension 4600, 4600C SFF, and 8300 series and is offered on both Home/Home Office and Small Business web sites. For the new Dimension 4600 and 8300 Media Center PCs, Dell has raised the performance bar with components such as the processor option (P4-2600/HT base), optical drives (DVD base) and graphics adaptors (ATI WonderPro 9000), which along with the Media Center Edition OS premium boosts the total base price. (Side-by-side price/performance comparisons against existing Dimension 4600 reveal a $130 premium associated with the Media Center Edition OS.) Dell's base prices start at $839 for the Dimension 4600 selling on the Small Business web site or $909 for the same Dimension 4600 available on the Home/Home Office web site. Like all Dell desktop product lines, the Small Business web site portal sells products for a lower price than the Home web site portal. It should be noted, however, that Dell originally limited the Small Business Media Center PC configurations to a single optical drive solution, which forced consumers to turn to the more expensive Home web site for the more attractive dual drive options. (This was just recently reversed and now both Home and Small Business web site portals offer dual optical drive options.)
Dell's new Media Center PC base configurations and associated pricing are detailed in the chart Like Dell, Sony's brand new line of RZ Media Center PCs offered in an almost mirror image of its former RZ series chassis design. The only cosmetic difference is the enlarged center band running vertically through the face plate, which is approximately twice the width of the band accent for the RZ predecessors. ARS expects that Sony's new RZ Media Center PCs will replace the majority - if not all - of the manufacturer's high-end desktop placements. The two initial systems come equipped with P4 Hyper-Threading processors, base 512MB RAM and 160GB hard drive options, 128MB GeForce 5200 graphics, Windows XP Media Center 2004 OS, in-house GigaPocket PVR software and a dual optical option that includes the more flexible DVD+/-RW drive.
Sony's feature sets are more akin to the Media Center PCs available in the marketplace since inception. The manufacturer's price points reflect newer-technology premiums at $1,599 for the 2.8GHz P4/HT and $2,199 for the 3.2GHz P4/HT. In head-to-head comparisons, however, Sony's performance premium either match or beat those offered by Dell. This is exhibited in the chart below. (Only Dell's 8300 series offers access to the same performance components offered by Sony.)
An overall comparison between these two new Media Center PC players will show that Sony is positioned for a much easier transition to the digital media entertainment space than Dell. Sony not only has a well-established mind share in the consumer electronics (CE) field itself, but was the first to bring personal video recording capabilities to the PC with its release of GigaPocket. GigaPocket compounded with click to DVD and a handful of other in-house developed multimedia software enhancements that come standard with the VAIO series have provided Sony with an innovative reputation within the PC+ space. In Dell's corner are its well established PC brand share and a new release of the "Dell Media Experience," which is designed to provide similar digitally enhanced capabilities already available with rival PCs like Sony VAIO.
In addition to the new Dell and Sony entries into this space; HP, Gateway and ViewSonic have all introduced new Media Center PCs simultaneous to Microsoft's Windows XP Media Center 2004 (a.k.a. Harmony) launch. As the first major PC Vendor to release a Media Center PC (MC) on October 29, 2002, HP has imparted notable distinction to its next-generation MC release by affixing a digital camera docking station to the top of its new MC chassis. To accentuate the digital photography attribute, which can accommodate HP and non-HP digital cameras, all of HP's new MCs carry the new moniker of HP Media Center Photosmart PC. With three models released thus far, HP's new mainstream units are all equipped with P4 processors with Hyper-Threading technology, a 512MB memory base, a 160GB hard drive base, and dual CD or DVD and DVD+RW drive options. Prices range from as "low" as $1,499 for the m370n and as high as $1,999 for the m390n. Wireless keyboard and mice are offered with the top two mainstream units, the m380n and m390n.
In addition to the docking station and the wireless input devices, HP's new Media Center Photosmart PCs include other differentiators like seven-in-one media readers (versus the six-in-one found in select predecessors), a one-button print option located on the remote control (exclusive to HP) and a ten-foot range for its FM radio reception via remote control. With this release, HP has also integrated user-friendly software features aimed to challenge Sony's longstanding in-house software advantages. Three of HP's new software apps include Back-up and Restore for automatic creation and storage of digital negatives for all digital photos which can be restored to the initial image regardless of saved alterations, HP Memories Disc for slide show creation and photo archives, and HP Image Zone that enables "digitites" to search stored photos and modify images with regard to red-eye, contrast, and album creation. HP has presented an impressive line-up of new Media Center Photosmart PCs with competitive price points that even reflect some recent premium component price reductions. Ultimately, HP's photo-focus will play well to potential Media Center PC buyers based on the fact that digital photography is one of the key market drivers for this space. With digital cameras set to outpace non-digital camera sales for the first time this year, consumer requirements for digital photo storage, manipulation and presentation will continue to be a driving force, which appears to be apparent to those in HP's think tank.
Like HP, Gateway has chosen an innovative path with its second-generation MC release. With its new 610 Media Center release, Gateway has differentiated itself by introducing the first mainstream all-in-one Media Center PC. Like the manufacturer's all-in-one Profile PC line, the computer itself is housed in a compartment hidden behind the screen. All of Gateway's new 610 Media Center PCs ship with a 17-inch widescreen flat display. Looking more like its LCD TV line, the new 610 also offers the advantage of an 802.11 WiFi enhancement within the 610XL series. Other than the WiFi, 2.1 stereo with built-in subwoofer, and the companion LCD, Gateway's new MC offers the same digital entertainment features such as PVR (personal video recorder), FM Radio, and general digital media functionality found in competing MCs. Showing renewed product innovation, Gateway's 610 does offer the most compact package for Media Center PC novices. Conversely, the all-in-one 610 Media Center also takes a risk in eliminating any display diversity for potential buyers. Up to this point, MC consumers were able to choose between TV and/or computer display in order to access the Media Center applications offered through Microsoft's Windows XP Media Center operating system. Therefore, consumer adoption of the 610 all-in-one series will be subjective and almost impossible to predict. For those interested in just a Media Center PC, Gateway has also updated its system-only 510 and 710 Media Center series with Microsoft's new OS release.
After further investigation, there is a more serious, non-aesthetic issue with the forecasted 610 configurations. Gateway's initial product announcement alludes to three separate 610 series configurations ranging as low as $1,499 and as high as $1,999. And, while the $1,499 price tag reflects an extremely reasonable "entry-level" price point for a Media Center with a companion 17-inch LCD, the feature set is lacking in the traditional performance components associated with intense multimedia applications. In contrast to the current MC features sets, which include 512MB to 1GB worth of memory, 120 to 250GB hard drive capacity, rewritable DVD drives, and 64 to 128MB of dedicated video RAM, Gateway's base 610S is equipped with 256MB of RAM, 80GB hard drive, integrated (or shared) Intel Extreme Graphics and a DVD/CD-RW combo drive that does not even begin to compare. For Media Center PC buyers, which tend to be more educated PC users, the 610S will not be found to be a suitable digital entertainment device. This is also true of the system-only 510 option that starts as low as $999 for a stripped-down machine.
The third and final re-release by one of the major big-name manufacturers was introduced by ViewSonic. Despite its original NextVision M2000's limited distribution and little known success, ViewSonic has also chosen to stay in the game with an emphasis on the visual aspect of the Media Center PC concept with several bundled display solutions. Best known for its forte in the WAF (wife approval factor) aspects due to its sleek profile and horizontal or vertical chassis stance option, ViewSonic has wisely chosen to stay with its initial chassis design with the next-generation NextVision M2100. Beyond an optical drive performance enhancement from DVD-RW to DVD+/-RW, a jump from 64MB to 128MB worth of video RAM, and the integration of the new applications made available with Microsoft's new Windows XP Media Center 2004 OS, ViewSonic has done little to update its MC line. Instead, the initial M2100 price tag is $100 cheaper than its M2000 predecessor.
In comparison to the other mainstream Media Center PCs like HP's 2.8GHz P4 with Hyper-Threading clad Photosmart m370n at $1,499, ViewSonic's M2100 comes up with a $100 price/performance disadvantage for a similar configuration, but no Hyper-Threading. Still, the most significant change to ViewSonic's Media Center strategy is the marketing. Drawing on its visual strengths, ViewSonic is advertising the following bundled solutions, which range from as low as $1,399 with the initial M2000 or as high as $5,999 with a 42" Plasma. Although the vast majority of ViewSonic's Media Center PC bundles will only benefit from niche play status at best, ARS applauds ViewSonic's creativity in highlighting its primary strengths within its most recent Media Center PC initiative.
As for the overall pre-season line-up, all of the Media Center PC manufacturers have shown a commitment to this nascent digital entertainment marketplace. And, although the Media Center PC's path to mainstream market adoption remains undefined, these manufacturers are at the forefront of the movement. The better-than-expected consumer adoption of the initial Media Center PCs does indicate an innate interest in a digital-hub like device. ARS expects this will continue to be a catalyst for these and other manufacturers to jockey for a frontal Media Center PC position in the forthcoming holiday season. In related news, Alienware representatives have declared that the omission of a Media Center PC on their web site is a temporary retreat from the market, meaning that the manufacturer intends on re-entering the market some time in the future.
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RESEARCH
Sponsored by:
Top-Selling Software
Week of October 12
October 18, 2003
| All Categories |
| Rank |
Title |
Publisher |
ASP |
| 1 |
Norton Antivirus 2004 |
Symantec |
$40 |
| 2 |
Norton Internet Security 2004 |
Symantec |
$65 |
| 3 |
Halo: Combat Evolved |
Microsoft |
$41 |
| 4 |
MS Office XP Student & Teacher Ed Acad |
Microsoft |
$135 |
| 5 |
MS Windows XP Home Ed Upgr |
Microsoft |
$96 |
| 6 |
Max Payne 2: Fall Of Max Payne |
Take 2 Interactive/Rockstar |
$49 |
| 7 |
Norton System Works 2004 |
Symantec |
$67 |
| 8 |
Medal Of Honor: Allied Assault BreakThrough Expansion Pack |
Electronic Arts |
$27 |
| 9 |
MS Age Of Mythology: Titans Expansion Pack |
Microsoft |
$29 |
| 10 |
MS Age Of Mythology |
Microsoft |
$35 |
| Games |
| Rank |
Title |
Publisher |
ASP |
| 1 |
Halo: Combat Evolved |
Microsoft |
$41 |
| 2 |
Max Payne 2: Fall Of Max Payne |
Take 2 Interactive/Rockstar |
$49 |
| 3 |
Medal Of Honor: Allied Assault BreakThrough Expansion Pack |
Electronic Arts |
$27 |
| 4 |
MS Age Of Mythology: Titans Expansion Pack |
Microsoft |
$29 |
| 5 |
MS Age Of Mythology |
Microsoft |
$35 |
| 6 |
The Sims Double Deluxe |
Electronic Arts |
$40 |
| 7 |
Command & Conquer: Generals Zero Hour Expansion Pack |
Electronic Arts |
$29 |
| 8 |
Sim City 4 Deluxe |
Electronic Arts |
$38 |
| 9 |
Star Wars: Jedi Knight: Jedi Academy |
LucasArts |
$48 |
| 10 |
The Sims: Superstar Expansion Pack |
Electronic Arts |
$27 |
| Business |
| Rank |
Title |
Publisher |
ASP |
| 1 |
MS Office XP Student & Teacher Ed Acad |
Microsoft |
$135 |
| 2 |
QuickBooks 2003 Pro |
Intuit |
$272 |
| 3 |
McAfee SpamKiller 5.0 |
Network Associates |
$36 |
| 4 |
My Bookkeeper |
Elibrium |
$25 |
| 5 |
QuickBooks 2003 |
Intuit |
$200 |
| 6 |
Norton AntiSpam 2004 |
Symantec |
$38 |
| 7 |
Pop-up Stopper Companion 3.0 |
Panicware |
$30 |
| 8 |
MS Office XP |
Microsoft |
$391 |
| 9 |
SnapSync/Snap Dialer Bundle |
FutureDial Inc |
$30 |
| 10 |
My Labels Premium |
Elibrium |
$45 |
| Home Education |
| Rank |
Title |
Publisher |
ASP |
| 1 |
Mavis Beacon Teaches Typing 15.0 |
Riverdeep Interactive |
$20 |
| 2 |
Adventure Workshop 1st-3rd Grade |
Riverdeep Interactive |
$19 |
| 3 |
Adventure Workshop 4th-6th Grade |
Riverdeep Interactive |
$19 |
| 4 |
Adventure Workshop Preschool-1st Grade |
Riverdeep Interactive |
$17 |
| 5 |
Instant Immersion Spanish |
Topics Entertainment |
$19 |
| 6 |
Professor Teaches Office XP 3.0 |
Individual Software |
$30 |
| 7 |
Math Advantage 2004 |
Encore |
$34 |
| 8 |
Dora The Explorer Backpack Adventure |
Atari |
$19 |
| 9 |
Elementary Advantage 2004 |
Encore |
$32 |
| 10 |
MS Encarta Reference Library Plus 2004 |
Microsoft |
$68 |
List is based on units sold by twenty-three channel partners. For more information, please contact The NPD Group at (703) 376-6226.
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RESEARCH
Paper Promotions – Is it a Game That Can Be Won?
By:
Patricia Lloyd
Print Media Analyst
ARS Research
September 4, 2003
In the print media market, the retail promotions game is stacked in favor of Hewlett Packard. HP dominates over all promotions, with its wide variety of paper products, although Kodak is competitive in photo paper promotions. Other manufacturers need to rewrite the rules of the game or decide this is a game they don't need to play to win.
HP sits on a wallet lined with profits from ink, which is more expensive per milliliter than some of the worlds' finest champagnes, and the company can afford to fund countless free paper promotions. Other manufacturers don't have that luxury and really need customers paying for their paper products.
Some players have realized that they can't compete in the free paper game, so they offer quantity discounts, instant rebates and bonus packs. Some office products superstores seem to realize they can't play in HP's ballpark with free paper deals. According to ARS' Retail Promotions Tracking Database, Staples is one of the Retailers that uses quantity discounting and sale prices rather than giving away house brand papers with buy one or two and get one free offers. Buy More, Save More is the mantra at Staples.
The stakes in this game are climbing, as HP and others are increasingly giving away more expensive papers in larger sheet counts. After taking advantage of a buy one get one free offer, customers might be taking home 250-sheets of a premium 4x6 paper. To HP that is 6,020 inches of paper to be covered by precious ink, however to other manufacturers such as Kodak, those types of promotions mean it is a long time before that consumer will need to visit a store to buy more paper. As the dollar amount of promotions continues to escalate, the question becomes - where will this trend end?
Just because a manufacturer sells ink, it doesn't mean they need to play by HP's rules in the promotions game. Some manufacturers, such as Epson and Canon, have brand loyal followings. These customers tend to spend more for their inkjet printers and function more at an advanced amateur or semi-professional level in their digital imaging efforts. Epson printer owners know they can choose from a variety of large format media (11x17, 13x19, or 17x22) or even roll media for panoramic photos. These papers will sell without much promotional effort from Epson.
Although they can't give away as much paper as HP, that doesn't mean other manufacturers should just give up and concede the game. They need to make their own rules and come up with creative promotions that provide added value to consumers without the free paper offers, which should be used sparingly but not be relied upon.
Throughout Europe free paper offers are not used as commonly as here in the United States, therefore turning manufacturers to other marketing tools. During the World Cup, Epson bundled a free t-shirt and World Cup software with paper products. Other marketing tools in Europe have included bundling paper with a free picture frame or photo album. During one European campaign, Epson included points on each paper package, so customers could collect the points and redeem them for merchandise such as software titles.
Here in the United States, Office Depot recently promoted its house brand ink by offering customers a free software download from the Internet. Paper products could include a code to allow one-time access to a site to download a software title. This would be similar to customers downloading ring tones for their cell phones. Paper users could download creative templates or special effects, such as canvas or vellum looks. Make the downloads high-quality, fun and easy, and change them on a regular basis, and customers could get hooked on the idea.
Another alternative to free paper giveaways could be a partnership with another national Retailer. Consumers could buy photo paper and get a free Blockbuster movie rental or Big Mac at McDonald's. Better yet, a paper manufacturer could team with an Internet player such as Netflix, which offers online DVD rentals shipped to the customers' home. Offering a discount coupon to a larger player such as Amazon.com is another possibility.
Print media manufacturers need to break out of the free paper rut. To attract consumers and build market share without HP's budget, creativity is going to be the way to sell paper. The print media market is still new - customers are still experimenting with the benefits of photo media. In the near future the market will be maturing and free paper offers will no longer be the primary means of gaining market share. Until that time, manufacturers continue to play the costly promotions game, giving up profits for market share.
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RESEARCH
Sponsored by:
The following data is gathered from analyzing shopping activity on PriceGrabber.com, one of the world's largest shopping comparison sites.
Average Price for Digital Cameras
The average price for digital cameras took a major dip during the holiday sales period of 2002. The current pricing trend indicates a similar price drop for the holidays this year.
Average Price for Plasma/LCD Television
Prices on Plasma and LCD Televisions is clearly dropping. As the prices come down, PriceGrabber has seen a proportional rise in the popularity of these television types on the site.
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will get read and for a fraction of the price of an ad in
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COMMUNITY
Changing Channels:
A New Channel –
The iPod Revolution by
By
ChannelMedia Columnist Steve Cross |
|
On Thursday October 16, 2003, Apple Computer launched iTunes for Windows. Now the other 97% of the computer universe can download music legally for about a buck a track from the best interface humanly possible, designed by the Human Factors team at Apple, the best in the business. It may not seem evident, but folks, we are watching the creation of a new channel.
Now all the crooksters can go hide under their respective rocks. All the underground sites will wither and die (well mostly all of them), as the ease of use of the sites, legal availability, quality of music (yes, the stolen files have bad sound quality), and music catalog lead people back to acquiring this stuff legally.
The RIAA (Recording Industry Association of America) is winning. But why were they losing so bad for so long? I have one suggestion; their naïve unwillingness to accept a new channel. Just like our industry first had a problem with catalogs, then later with ecommerce. But can you think of one other industry whose intransigence and lack of willingness to accept a new channel caused as much harm? I can't.
Here's what happened when catalog Resellers first started handling software; some publishers supported them and some didn't. Because the software industry is so diverse, and the number of publishers is quite high, a significant number of software titles were available from the get-go. And the hardware folks were very diverse, allowing the catalogers to access a ton of products. As the new channel grew, the product proliferation and the acceptance of the channel became part of a virtuous circle, allowing the customer to take advantage of this new buying channel. When the e-tailers started out, the entire industry had already done the dance, and remembered it. Slam-dunk! Customers get to buy our stuff a bunch of different ways now: direct, retail, VAR, catalog, e-tail, download, TBYB, etc.
In the music business, however, they have few publishers. Lots of titles, but all owned by the mega-companies, like all media consolidation. Apparently they don't have a lot of channel strategists in that business or they would have figured this out a while back, before losing billions of dollars to theft. By ignoring the new channel (electronic music downloads), by refusing to accommodate the legitimate Resellers, the RIAA took a 19th century anti-technology approach. Looks like they should have asked us how to work with a new channel.
Contact
Steve Cross at steve@crosschannel.com,
702-492-7472.
Editor's
Note: Steve is a top channel consultant who offers services
from one-day brainstorming sessions to complete channel strategy
plans. He has helped numerous companies to increase revenue
and enhance their channel success.
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