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NEWS
Tis the Season to Lay it All on the
Line!
By ChannelMedia Staff
Don’t you love this time of
year? Sure, most of us are completely nuts, outta control
but that’s good. The alternative is NO FUN. This is
what we play for: The Holiday Selling Season, aka
Crunch Time. It’s the time of year when most of the
companies in the Retail Industry make between 25 to 60%
of their sales for the year. For many buyers and sellers,
it’s make or break for the year. It’s Cadillac
or steak knives. Nose to the grindstone. No long term planning
to be thinking about, just doing whatever you can to make
the register ring NOW.
Here are a few thoughts to help it ring early
and often.
- Don’t assume that it’s the
4th Quarter and customers need to buy from you. This is
going to be a strong holiday season and a hotly competitive
one. Drive traffic to your store, web site, catalog or
all of the above but DRIVE the business.
- Accentuate what you do best. What is your
Core Competency? You can do less by trying to do more.
- Don’t forget Pre-Sales Service.
- Don’t forget Post Sales Service.
Some “sales gurus” will tell you that selling
starts only after the sale. And what they’re suggesting
is that getting a customer to buy from you once is not
that hard of a task, but to get them to come back is not
only hard, its critical. Without repeat customers you
cannot survive. Hence…
Crunch time…Holiday Selling Season.
For many buyers and sellers, it’s make or break on
the year. Nose to the grindstone. No long term planning,
thinking about ….Q4 Online Shopping Update (source:
Study by aQuantive's Atlas DMT) Did you know: Mondays are
the busiest online shopping day. This finding points to
the fact that consumers shop in physical store locations
during the weekend, then jump online on Mondays to comparison
shop. The Atlas study reports that Fridays, typically slow
days for online shopping, are stronger than usual during
the holidays. And did you know, the most active online shopping
day in 2003 was December 15. Last December 15th posted a
140% increase in sales over an average holiday shopping
day. Weekdays between noon and 3 p.m. EST, are the most
active online shopping days during the holidays. Apart from
December, November and January are strong months for retail
advertisers, showing an approximate 20% increase in sales,
compared to September, October, and February.
SAVE THE DATE!
Spring RETAILVISION: Save the Date
- April 5-8, 2005
Hyatt Regency - Grand Cypress, Orlando, Florida
The retail channel is the pulse of the
North American marketplace. For over a decade, RetailVision®
has been the recognized leader in bringing together established
and emerging technology Vendors with Top 100-Level Retailers.
This is the Event where new consumer IT products and channel
programs are unveiled. Retailer-Vendor relationships are
forged. And, critical retail merchandising decisions are
made. It's all done in a business-intensive format that
sets the standard for more partnering agreements, more channel
exposure, and more opportunities to drive sales and build
brand recognition across the consumer channel. For more
information see www.retailvision.com.
Retail News
By Current Analysis
Radio Shack has opened a concept store that
represents a sharp break from its traditional format. It
features a centrally located circular service desk that
faces customers as they enter and colors never-before-seen
at a Radio Shack. Walls are painted orange and bright green
and carpeting is high-tech gray. Highlights of this new
format are:
- A wall display featuring computer and networking
accessories, digital cameras, camera accessories, radios,
CD players and fixed-line telephones
- A wall display focused on home entertainment
products and speakers
- A large inventory of cell phones (16 during
the visit), all of which were in working order
- A kiosk for printing professional quality
pictures
- The usual Radio Shack inventory of cables,
antennas and adapters placed discretely in the back of
the store
- Less focus on computers with only a single
boxed Compaq on display and only two boxed printers on
display
This new format has enormous potential for
Radio Shack because it puts emphasis on new products but
still offers staples. Yet there are kinks. One example is
digital cameras. The store only had three cameras on display
and none were working. Yet the store is located in a mall
with a Ritz Camera store that displays more than 20 digital
camera models. Further, the home entertainment area needs
modification. Four of the six televisions were working but
none of the newer home entertainment technologies were displayed;
the largest set was only 27 inches.
The store offers an enhanced focus on cell
phones as well as a wide assortment of phone accessories.
One problem is the distribution of shelf space
for personal photo printing. This is an explosive growth
opportunity for Radio Shack yet the store had no working
demo set up and the high-profit-margin photo paper was buried
on the bottom shelf. As wireless products boosted the company’s
most recent quarterly financial performance, it’s
no surprise that wireless home routers have significant
shelf space. The company should consider adding space for
a wireless printing demo as well as a section devoted specifically
to photo printing. The kiosk for photo printing needs more
focus as it is buried among piles of electronic toys. The
store visited in the San Diego area had been set-up incorrectly
with two long wall displays reversed. There are still some
deployment issues in rolling out this new format.
Vendor Importance: High because
it helps craft a new, less stodgy image for the company.
Market Impact: High because
any time the retail giant makes a change, the impact of
almost 7,000 stores doing something in concert can shake
the market.
ANOTHER RETAIL TURNAROUND: TWEETER
Tweeter Home Entertainment Group
announced the future of Tweeter with a new concept store
in Las Vegas and new national brand strategy. The Las Vegas
store, which represents the future of the Tweeter brand,
will open to the public in mid-January with an invitation-only
preview during CES 2005 for Wall Street analysts, members
of the media and business partners. The new Tweeter prototype
store was designed through a collaborative effort between
a cross-functional Tweeter team and Cincinnati, Ohio based
FRCH Design Worldwide. "The Las Vegas store is different
than the Tweeter you see today at our current locations,”
says Jeffrey Stone, President and CEO of Tweeter Home Entertainment
Group. “We are moving from our current model of high
quality product retailing, and evolving into a service company
that offers discerning home and mobile entertainment buyers
an entirely new array of solutions and services. Together
with new industry partners like Microsoft and HP complementing
our existing supplier group, Tweeter is creating an innovative
way for consumers to shop and experience entertaining solutions,"
added Stone. "We plan to test and refine this concept
in Las Vegas, and will integrate our learning into our other
markets over time." The store's unparallel design is
the work of Cincinnati-based FRCH Design Worldwide. Tweeter
customers at the Las Vegas store will find entertainment
systems that are specially designed and configured for experiencing
sports, movies and music in a way that makes sense for them.
Using an "experience map", customers will be able
to navigate through display and demonstration areas. A team
of highly trained "Entertainment Architects" will
collaborate with customers to develop personalized entertainment
solutions in a unique in-store design studio. Customers
can walk through a series of notional rooms and "discover"
by being able to switch seamlessly between movies, television,
music and photography. They can also "create"
by loading and sorting their favorite digital content for
playback in any room of the house. In addition, there is
a special in-store area for mobile multimedia and portable
products as well as two rooms for breathtaking home theater
and extraordinary audio demonstrations. The store will also
feature a new Tweeter logo, design approach, guest experience
and a new Entertainment Architect dress code - all of which
will be tested for rollout to the rest of the Tweeter chain.
HP and D&H Partner
D&H Distributing announces it is expanding
its distribution relationship with HP and plans to provide
expertise and support for the HP digital entertainment product
portfolio. HP has brought its IT and consumer expertise
together to offer a complete portfolio of home entertainment
offerings, including Media Center PCs, the new HP Digital
Entertainment Center, Digital Home Theater projectors, the
Apple iPod from HP (40GB and 20GB versions), and HDTV-ready
plasma and LCD televisions.
D&H is one of the few distributors selected
to carry the new HP Digital Entertainment Center -both the
z540 and z545b. Models of the offering, as well as HP's
new LCD and plasma televisions, are expected to begin shipping
this month. The new HP home theater projectors are slated
to ship in November.
"The fact that HP has accumulated such
a wide roster of home entertainment products clearly marks
a paradigm shift we've been anticipating for more than a
year. PC-based devices have become a driving force in what
was once a CE-only universe, seamlessly integrating the
home entertainment architecture," said Dan Schwab,
Vice President of Marketing for D&H. "The fact
that D&H tops a short list of partners to distribute
these technologies speaks volumes about both D&H status
as a convergence leader and the momentum of our relationship
with HP."
“HP is introducing a suite of
products that transform the average living room from analog
to digital: Consumers can watch movies and TV on large,
high-definition displays, personalize their playlists and
manage mega-libraries of music, photos and movies digitally
and virtually without leaving their couch,” said Bob
Pechon, Vice President of Consumer Sales at HP. “We
wanted distribution partners with a similar focus and D&H
not only has that but the CE/IT history and expertise to
deliver high-value, high-touch services to its base of resellers.”
Retail Top 10
By Keith Newman and Bob Straight
1. Majesco announced that
James Halpin, former Chief Executive Officer of CompUSA
and Peter Cuneo, former president and Chief Executive Officer
of Marvel have joined the company's Board
of Directors. "We are fortunate to add such experienced
professionals
to our Board of Directors," said Carl Yankowski, Chairman
and Chief Executive Officer of Majesco. "As our diverse
digital entertainment company grows, the experience, wisdom
and guidance of both Jim and Peter should serve Majesco
well." Prior to the starting of his own private investment
firm in 2000, Mr. Halpin was president and CEO of CompUSA,
the largest chain of computer stores in the world with 225
retail outlets. In 1998, Mr. Halpin was named one of the
Top 25 Managers in the World by Business Week. Before joining
CompUSA, Mr. Halpin held a variety of leadership positions
at several multi-national companies, including Homebase,
where he served as president of the national warehouse club
operator for the 85-store home center chain; BJ Wholesale
Club, as president, and senior vice president/general merchandise
manager of Zayre Corp.
2. Electronics Boutique and
WideRay announced that the companies have
partnered to deliver mobile games to consumers inside select
EB Games retail stores beginning in December 2004. EB Games
will make its Wireless Game Portals --in-store zones where
customers can download games -- available in 100 retail
stores across the country beginning in December, marking
the industry's first wireless distribution platform implemented
in a physical retail setting. Mobile phone users can access
the Wireless Game Portals by simply going into a participating
EB Games store and using a compatible device -- without
any pre-installed software -- to view a listing of popular
game titles available for purchase. Users also have the
ability to receive game-related video as well as reviews
and previews of PC and Console games. The Wireless Game
Portals are powered by WideRay's Jack Service Point, which
enables applications to be downloaded at high speed through
built-in Bluetooth connections on consumers' mobile devices.
The platform supports a wide variety of mobile devices,
including those running the Windows Mobile and Symbian operating
systems. "With the launch of several new mobile gaming
platforms in the last year alone, it's clear that the opportunity
to sell games and content beyond the traditional PC and
console-based gaming platforms is a huge one, and EB Games
remains on the leading edge by being the first to offer
on-location mobile games to our customers," said Nathan
Solomon, director of Business Development, Electronics Boutique.
"We chose WideRay's platform because its unique technology
provides the means for us to leverage our broad retail network
to reach the growing number of wireless gamers." The
proliferation of more advanced mobile phones and the introduction
of gaming-first handheld devices has spurred a new category
of wireless gaming. According to research firm Datamonitor,
the wireless gaming market in the United States and Western
Europe alone is expected to reach approximately US $6 billion
in the next four to five years. "EB Games is a leading
pure-play games Retailer, and sees mobile games as an exciting
new revenue category," said Saul Kato, founder and
CEO of WideRay. "Retail stores are the dominant location
for consumer interaction, and our platform solves the challenges
of delivering digital goods directly to consumers in stores.
It's a natural fit." EB Games and WideRay are working
with many of the top handset manufacturers and operating
system developers, as well as leading Symbian OS and Java
mobile game publishers, to bring consumers the most advanced
mobile games direct to their wireless devices via the Wireless
Game Portals.
3. The recent announcement from the Wi-Fi
Alliance that it has formed a Wi-Fi/Cellular Convergence
working group highlights a trend identified by ABI Research,
in which many different elements needed to bring voice over
Wi-Fi to consumers are beginning to intersect. Last month,
the Unlicensed Mobile Access Consortium also approved a
set of protocols for seamless handoffs between cellular
networks and IP-based wireless networks such as Wi-Fi. According
to Phil Solis, senior analyst, wireless connectivity, such
initiatives by industry consortia are falling in behind
new products from IC Vendors and equipment and service providers
that are pushing VoWi-Fi from the enterprise to the wider
consumer market. "IC Vendor Agere, for example, has
withdrawn from the general market," says Solis, "and
is focusing all its efforts on Wi-Fi chips to be embedded
in mobile handsets. Texas Instruments is making Wi-Fi and
VoIP ICs, and has produced a reference design to make it
easier to build future handsets." "Embedded Wi-Fi
ICs are a growth market," adds Solis, "with those
going into cellular handsets forming a big part." Over
in handset territory, a number of Vendors - Vonage, Net2Phone
and Zyxel are three obvious examples -- have offered (or
will soon offer) single mode cellular handsets for the consumer,
and a new crop of dual mode models are issuing forth from
companies like Motorola, which has an enterprise-oriented
model undergoing user trials. SBC will offer its Cingular
customers such a phone to consumers in 2006; it will be
able to access SBC's own Wi-Fi hotspots as well as many
available via a roaming agreement with Wayport. ABI Research's
study "Voice over Wi-Fi" forecasts the growth
of various VoWi-Fi client solutions and the direction VoWi-Fi
will take in regard to 802.11 and VoIP technologies. Shipments,
ASPs, and revenue forecasts are provided through 2009.
4. Season discounts start early this year…and expect
aggressive discounting and promotions through the New Year.
In an e-mail promotional sent out just in time for Halloween,
Circuit City is offering a number of deals
worth screaming about. First off, from now until November
3, 2004, customers who spend $299 will receive a free Circuit
City gift card valued at $400. Secondly, consumers can receive
a Circuit City gift card up to $500 if they spend $699 or
more on a new big screen TV. Third, for those looking to
save a buck or two on digital cameras and photo printers,
Circuit City is offering $50 off all digital cameras and
camcorders including $150 off printers valued over $100.
Last but not least, Sony Vaio notebooks are $250 off the
sticker price, and Sony Vaio desktops are $450 off. On CircuitCity.com
there are great money saving offers on popular MP3 players.
For example, customers looking to purchase a new iRiver
MP3 player can save 10% off their next purchase of $100
or more. Most offers are available from now until November
6, 2004.
5. Ever get tired of searching through items
on Internet retail sites with no picture displaying what
you might want to buy? Well, Amazon.com
has finally changed its format to accompany its products
with pictures. The new feature, called Customer Images,
allows users to highlight attributes of a product, such
as size, or see the product in action. The photos will appear
beside the product as well as in customers' “About
You” pages. Amazon does have the right to remove any
offensive or illegal copyrighted images as the company sees
fit.
6. Throughout the past two years, Delphi
has quickly become a world leader in mobile electronics
and transportation component systems. Mostly noted for using
satellite technology to transmit radio waves and data-based
information, Delphi has manufactured and distributed a variety
of XM satellite radio systems developed and marketed specifically
for automotive installation. However, as the popularity
of automobile satellite radios began to significantly increase,
manufacturers such as SIRIUS Satellite
Radio and Delphi began to notice another advantageous side
of satellite technology, the portable satellite system.
Beginning with the Delphi SKIFi portable audio system, which
utilizes satellite waves to transmit 24-hour commercial
free music into consumers’ homes, the face of the
average radio would be changed forever. For a brief period
of time, the SKIFi boom box was the answer to portable satellite
radio systems worldwide. It was, however, until Apple changed
the way music was delivered. Since Apple unveiled the popular
iPod portable MP3 player, manufacturers quickly changed
tactics from the typical walkman/boom box platform to the
more popular MP3 player. Now comes Delphi with its own version
of the portable player. Unlike rival MP3 players that store
thousands of songs, Delphi’s new player is supported
by satellite technology that allows users to pause and record
more than five hours of XM programming. The Delphi MyFi
contains a rechargeable battery, a built-in antenna, on-board
flash memory, and can easily fit within the palm of one’s
hand. For a small monthly fee, customers can listen to nationwide
music, including talk and sports programming as well as
television broadcasts around the world. Starting in early
December, the XM radio will be available at Best
Buy and Circuit City and will
retail for $350.
7. Beginning in January 2005, Toshiba
and Hitachi announced the two companies
would begin jointly manufacturing liquid crystal display
panels for flat TVs. The new company, called IPS Alpha Technology
Ltd, will start operations on January 1, 2005 in Mobara,
Chiba Prefecture. Canon announced its Q3
net profit rose a whopping 39.4%. The world's biggest maker
of copiers boasted sales of digital cameras, semiconductor-production
equipment, and laser beam printers drove up net profits
to 101.78 billion yen from 73 billion yen a year ago. Company
sales rose 9.2% to 838.3 billion yen. Operating profit for
the quarter rose 26.1% to a record 158.3 billion yen. The
company raised its yearly net profit forecast to 339 billion
yen from 320 billion in 2003. Cannon left its full-year
sales forecast unchanged at 3.47 trillion yen. Canon hopes
the transition from the traditional 35mm camera to the popular
digital format will continue to drive sales forward this
holiday season. Throughout the remainder of the year, the
company foresees the digital camera market should continue
to grow, particularly in the overseas markets.
8. Remember a few years back when Gateway
was one of the nation’s leading manufacturers of personal
computers and laptops? Better yet, remember losing track
of Gateway’s popular black and white bovine-inspired
box design as Dell’s “Dude you got Dell”
campaign took the nation by storm? Who could forget those
commercials? Well this holiday season Gateway could give
Dell and HP a run for their money as the company rebuilds
its old reputation as a leader of low-cost high-end personal
computers. Since its acquisition of eMachines,
Gateway Inc. posted its lowest Q3 reports in over three
years. The newly formed Gateway/e-Machine franchise reported
a net loss of only $56.5 million, compared to the massive
loss of $136.1 million in the same period last year. Including
reconstruction costs of some $63 million, the company shows
greater signs of rebounding in 2004 compared to the same
period of 2003, which included charges of $73 million for
restructuring. Gateway’s revenue rose 3.7%, to $915
million from $883 million last year, while shipping of personal
computers rose 67% from the same period last year. Gateway
hopes the slow but promising success of its e-Machine acquisition
will continue to pay off in the fourth quarter. The company
expects fourth quarter revenue to rise between $975 million
and $1 billion. Granted, these are high hopes for the company,
and yet if the economy continues to struggle, consumers
looking to save a buck or two this holiday season might
consider purchasing Gateway’s low cost e-Machine.
9. Office Depot will begin
to outsource most of its call-center operations. In an effort
to curb operating costs, the office supply chain will begin
consolidating the functions of eight call centers and three
account management centers around the nation. The plan will
save the company some $15 million in operating costs, but
it will also cost about 1000 jobs as well. Just before the
holiday season, Office Depot plans to use outside firms
to set up a virtual call center environment instead of the
traditional call centers located around the nation. The
plan should cost about $12.9 million with approximately
900 employees losing their jobs. Office Depot contends the
new virtual call center firms are expected to offer jobs
to a large number of the people who lose their jobs from
the transition. Meanwhile, the consolidated call centers
will break into two company facilities in Boca Raton, Florida,
and Norcross, Georgia.
10. Somewhere between selling Big Macs
and Happy Meals, fast-food conglomerate McDonalds
figured out a way to slowly join the highly profitable electronics
market. Throughout the past year, the company partnered
with a number of big name electronic manufactures, including
Apple’s iTunes and Best Buy.
Now the fast-food giant is planning to install self-service
DVD kiosks from DVDPlay into restaurant locations nationwide.
The DVD rental by mail delivery service at McDonalds is
on a trial basis; currently testing some 157 DVDPlay machines
in 107 Denver-area restaurants. It’s still unclear
if McDonalds will push the new DVD by mail trend into all
locations, but it defiantly wouldn’t surprise anyone
to see McDonalds hosting its own video store. What’s
next for the super-chain, its own line of clothes?
Retail Digest
By ChannelMedia
Ingram Micro tops expectations
for revenue and net income for Q3 2004. According to the
report, sales and operating margins reached the highest
Q3 levels since 2000. Compared with net income of $81.2
million on $5.21 billion in sales for Q3 2003, the company
earned $77.3 million on $6.02 billion in revenue for the
2004 quarter. North American sales were up a massive 19%
to $3.05 billion. Totaling the three quarters of 2003, Ingram
Micro reported sales of $18.01 billion, a 14% increase over
the $15.85 billion reported a year ago. North American sales
were $8.63 billion during that period, up 10%. Income throughout
the three quarters ending Oct 2 was $140.7 million compared
with $102.8 million a year ago. For Q4, Ingram Micro expects
sales to range from $6.65 billion to $6.90 billion and income
to range between $51 million and $57 million.
Toshiba proudly announced
the company has significantly rebounded after sales of digital
video recorders, semiconductor memory chips, and personal
computers pulled the company through the first fiscal-half
of 2004 that ended Sept. 30. Sales climbed 6.7% from 2.608
trillion yen in 2003 to 2.782 trillion yen this half of
the fiscal year. The Tokyo-based company announced, from
April to September, net profit totaled 8.38 billion yen,
compared with 32.18 billion yen lost during the same period
last year. After last year’s reconstruction efforts,
including trimming back its workforce by some 14.4%, Toshiba
is now forecasting net profits of 50.0 billion yen and sales
of 5.87 trillion yen through March 2005. If predicted true,
for the first six months of 2005, profits would exceed the
28.8 billion yen earned and 5.58 trillion yen in sales in
the last fiscal year through March 2004.
First Intelligent Array announced the FIA
On3 Pro Digital Media Player and Library. The FIA On3 Pro
is an evolutionary breakthrough in car audio and video entertainment,
and doubles as a home media player, making the unit truly
mobile. The unit’s storage library has the ability
to organize and store thousands of CDs, photo files, or
more than 30 hours of DVD quality movies in a small compact
device that weighs less than 4 lbs. The FIA On3 Pro can
be trunk-mounted, installed under a seat, or in the glove
box, and connects directly to your automobile LCD or plasma
TV. An infrared full-function remote lets you play your
entire music play list or personal video collection while
on long travel trips, camping or just riding around town.
When you have completed your travel, you can take the On3
Pro into the house, because the unit’s mobile design
works in the car, in the home, hotel room, or anywhere else
you have video and audio outputs. Whether you’re medium
is videos, music or photos, its high quality home theater
outputs support both analog and digital 5:1 audio connections,
and provides quality sight and sound with HDTV and SPDIF.
The On3 Pro can display photo slideshows with music background,
and supports most popular audio and video formats. Company
president and CEO Gene Lu said, “The On3 Pro for automobile
is designed for technology-savvy customers and auto sound
enthusiast who may want to expand their play list and digital
entertainment in the car and in the home. FIA’s On3
Pro delivers state-of-the-art quality design in both sight
and sound, so customers can truly enjoy hours of entertainment.
Currently no other Vendor provides all these features in
a single product at such an aggressive price.” All
products are backed by a limited one-year manufacturer’s
warranty and are supported by FIA, Inc.’s skilled
customer service and support organization. For more information
log onto www.fiaon3.com.
Building on the company's mandate to open the home consumer
software market to value-priced alternatives to Microsoft
Office, Corel today announced the availability
of WordPerfect Office(R) 12 - Home Edition. A comprehensive
productivity suite specifically designed for the home computer
user, WordPerfect Office 12 - Home Edition offers customers
a significant savings by delivering productivity, security
and multimedia in a single $69 U.S. ($89 SRP with a $20
mail-in rebate) package. Available just in time for the
holidays, the highly anticipated bundled suite provides
everything consumers need for their home computers including:
software for word processing; spreadsheets; digital photo
editing and organizing; CD/DVD creation; a rich encyclopedia;
fonts; clipart; five powerful Internet security applications
with a complimentary 90-day subscription to protection updates;
and more. At this compelling price point, the applications
included in WordPerfect Office 12 - Home Edition are an
incredible value. WordPerfect Office 12 - Home Edition is
anchored by Corel's easy-to-use word processing and spreadsheet
applications, WordPerfect 12 - Home Edition and Quattro
Pro 12 - Home Edition. Additionally, the bundle lets users
take advantage of two key trends in home computing - the
explosion in consumers using their PCs as entertainment
hubs for digital photos and music such as MP3s and CD mixes;
and the need for a leading security technology like Symantec's
Norton Internet Security 2005 to keep important and highly
personal data safe from hackers and viruses. "This
suite is designed for home users, whether they're buying
a new computer or updating an existing system. We conducted
significant research into home-user computing needs, and
it's clear that the growth of security threats makes Internet
security a 'must have'. Our research makes us confident
that we're delivering the dream team of software for home
users," said Richard Carriere, General Manager, Office
Productivity at Corel.
Samsung announced that Alienware
would use Samsung's high-performance SpinPoint M series
of 2.5-inch hard drives in its new notebook computers. As
part of the agreement, Samsung's SpinPoint M series will
be the standard drive offerings for Alienware's high-performance
notebook computers and will be offered in 40GB, 60GB and
80GB capacities. All drives feature 8MB of onboard data
cache and a blazing-fast 5,400rpm spindle speed. "Samsung
is honored to enter into this high-level agreement with
Alienware. As a leader in the notebook and PC computer marketplace,
the industry looks to Alienware to set the standard. Partnering
with Alienware is another important step in reaching the
next level in the PC industry," said Henry Hong, Senior
Manager American Storage, Sales and Marketing for Samsung
SSI. "Using our best-of-breed technology, Samsung is
able to provide Alienware with greater dependability, greater
performance and higher density hard drives than current
competitive offerings. This is a win-win for all companies
involved." Samsung's SpinPoint M series drives offer
outstanding throughput performance, as well as lower power
consumption, lower heat, and lower noise levels than any
other 5,400rpm drive on the market today. Most notebook
computers today employ 4,200rpm speed drives to achieve
lower power consumption, heat and noise rates. Samsung is
able to provide higher speed drives that nearly match the
lower levels of 4,200rpm drives. "Alienware is thrilled
to be working with a company of Samsung's worldwide prestige.
As an industry leader, Alienware strategically aligns itself
with other technology leaders of innovation, and working
with Samsung is a natural progression for us," said
Robert Lusk, vice president of sales and marketing for Alienware.
"We have selected Samsung's SpinPoint M hard drives
for our notebook computers based on their high quality and
super dependability and the global recognition of the Samsung
brand." Samsung SpinPoint M series drives provide outstanding
reliability and industry-leading shock protection capability
through an advanced mechanical platform and robust cover
design engineered to minimize the intensity of external
shock transmitted to the most critical components of the
drive.
Retailers who live or die off the holiday
season could have slightly less to cheer about this year
because of sluggish growth in holiday spending, but there's
good news in consumer electronics, a new survey by ChangeWave
Research reveals. For the third year in a row,
Digital Cameras (22%) ranks as the number one item respondents
are most likely to buy for themselves or as a gift during
the holidays - although this is nine percentage points less
than the torrid pace of a year ago. Cell Phones (18%) rank
as the second most popular consumer electronics item, followed
by Laptop Computers (12%) and LCD Flat Panel Televisions
(10%). The complete findings of ChangeWave's new Consumer
Holiday Spending survey are available at www.changewave.com/holiday.
Overall, nearly half (46%) of the survey's 1,430 respondents
say they will spend more on consumer electronics this Holiday
season than last - a big jump from the 30 percent who said
they would spend more on consumer electronics this past
August. According to the survey, three consumer electronics
services are surging this holiday season. Home VoIP service
has registered a 225 percent gain in the number of consumers
planning to add Internet telephone over the next six months.
Satellite Radio (183%) and HDTV (110%) also registered big
gains. But in a potential damper to this year's holiday
cheer, the percentage of respondents who plan to spend more
money on their holiday shopping is down slightly to 18 percent,
compared with 19.5 percent last year. Another 18 percent
of respondents report they will be spending less money this
year – unchanged from a year ago. Higher energy costs
may be partly to blame for signs of sluggish holiday spending
growth, as 30 percent of respondents say increased energy
costs will have an impact on their spending - with 3 percent
saying it will have a "significant" and 27 percent
a "modest" effect. Still, there will be certain
shopping categories posting better results than others this
holiday season, and Online Shopping is clearly poised to
post the biggest gains, followed by Discount Retailers.
On the home entertainment and networking front, Big Box
Specialty stores remain the favorite location for shoppers,
with Best Buy (BBY; 49%) the leader in this space, and Circuit
City (CC; 18%) a distant second. Amazon.com (AMZN; 16%)
appears to have the most momentum, however, having picked
up four points since ChangeWave's August 2004 survey. The
complete ChangeWave Research Report, "2004 Consumer
Holiday Spending Survey," is available for free download
at www.changewave.com/holiday.
Staples the results for its third quarter
ended October 30, 2004. The company achieved net income
of $209 million for the quarter, a 26 percent increase versus
the third quarter of 2003. Earnings per share of $0.41,
on a diluted basis, rose 24 percent compared to last year's
third quarter. The company reported total sales for the
quarter of $3.8 billion, an increase of 12 percent versus
$3.4 billion reported for the same quarter in the prior
year. North American Retail comparable sales increased four
percent, driven by increased customer traffic, strong performance
in furniture, office supplies and copy center, and a solid
Back to School season. North American Delivery sales grew
13 percent, as continued marketing and sales force investments
accelerated customer acquisition. European sales rose 24
percent or 15 percent in local currencies. "Staples'
customers are responding positively to our strong execution
and easy shopping experience, resulting in rapid market
share gains," said Ron Sargent, Staples' president
and chief executive officer. "Our team remains focused
on improving customer service, differentiating our brand
and investing in profitable growth to expand our market
leadership."
Logitech eliminated
a major nuisance for online gamers: connecting a gaming
system to an inconveniently located broadband Internet connection.
The new Logitech Play Link wireless extension offers one-step
wireless. Consumers just plug it in and play online games
on their PlayStation(R)2, Xbox and PC game networks, even
if their Internet connection is on the other side of the
house. With the Logitech Play Link wireless extension, there
is no need for expensive, complicated wireless networks,
no software to configure, and no drilling through walls
or running cables under carpets. Instead, the Play Link
wireless extension consists of two small wireless transceiver
boxes. One plugs into the Ethernet port of an Internet router
or modem and the other plugs into a game console, PC or
other device -- instantly providing a wireless broadband
connection. In a recent study, Framingham, Mass-based research
firm IDC reported that 68.3 percent of console game owners
are aware of online gaming services, up from 46.3percent
in 2003. However, only 15.4 percent of PlayStation 2 and
13.7 percent of Xbox owners have played online games. "We
hear it all the time," said Jef Holove, director of
product marketing for Logitech's Interactive Entertainment
Business Unit. "Gamers have their PlayStation 2 or
Xbox in their living room and their broadband connection
in a home office. The Logitech Play Link wireless extension
provides an easy, affordable way for those who want to game
online but haven't because of the complexity of home networking.
The setup is fast and truly plug-and-play -- you plug it
in, and it just works."
RESEARCH
Sales and Marketing -- A Sibling Rivalry
or Business Partnership?
By Sridhar Ramanathan, Founder - The Pacifica Group
Sometimes sibling rivalry is a good thing.
It can actually push kids to carve out their identities
more distinctly and to perform better. The same is true
in the business world. CEOs often encourage some healthy
tension to push the organization to higher levels of performance.
Between Sales and Marketing, for instance, you want Sales
to push Marketing to define winning products while Marketing
should be pushing Sales to keep prices up despite pleas
for deep discounts. The same tension exists between Engineering
and Support. Support would love more design for supportability
built in, and Engineering would love not to worry about
documentation and supportability needs.
But sometimes sibling rivalry goes too far.
Often I hear CEOs of technology companies talk about the
virtual fist fights between Sales and Marketing when it
comes to handoffs. Having one VP of Sales & Marketing,
unfortunately, does not always remedy the issue. In fact,
some of the conflicts between the silos directly lead to
longer cycle times between first customer contact and final
contract. This clearly hurts revenue growth. So the problem
statement then is: how do I ensure the best, fastest handoffs
between Sales and Marketing? What’s the right goal
congruence between the two functions?
Marketing
|
Sales |
 |
Goal Congruence |
I recommend three areas in particular of goal
congruence to drive the right sense of urgency and mutual
accountability in the context of overall revenue growth.
Agree on the definition of a “lead”
One of Marketing’s most important contributions
to Sales is, of course, generating leads. The source of
the conflict is that there is poor or no definition of a
“lead” for proper handoff. It’s too common
to hear Sales complain that “the leads from Marketing
are just junk.” Or from Marketing you often hear “why
doesn’t Sales just follow up on the damn leads we
give them?” Both are valid criticism. The answer lies
in having an explicit agreement on the handoff. If you use
sales force automation tools like Salesforce.com or Siebel
CRM on Demand, you can even hard code these definitions
into the tool. I recommend agreeing on explicit criteria
by which leads are judged. The table gives you a template
for your teams to develop their own criteria for lead quality.
| Criteria |
Example |
High
Quality Lead |
Minimum
Acceptable |
| Desired
industry |
Financial
services |
Yes |
No |
| Industry
leading company |
Citibank |
Yes |
No |
| Company
Size |
>10,000
employees or >$250M in revenue |
Yes |
No |
| Intent
to purchase |
Plans
to buy in <3 months |
Yes |
Yes |
| Desired
audience |
Director
of IT Operations |
Yes |
Yes |
| Contact
information |
Name,
title, company, phone, email, address |
Yes |
Yes |
The point here is to sit down and have two
representatives from both organizations come up with the
success criteria and build this into the Inside Sales efforts
or other processes used to handoff leads to Sales. You’ll
find that this will not eliminate the healthy tension between
the two teams but it does get them focused on what really
matters—qualified leads for sales action.
Define “success” as a booked appointment
with the prospect
Another great opportunity to drive the right
teamwork is to demand that leads are evaluated on the number
and quality of actual appointments with the customer prospect.
Too often I see Marketing just focus on cost per lead as
the figure of merit in ROI calculations. This approach puts
neither weight on higher quality leads nor emphasis on conversions
to actual appointments both of which are far more important
to driving sales. The other advantage of this is that it
puts pressure on Sales (or Inside Sales) to convert “inquiries”
which are just unqualified leads into booked meetings for
sales action. Again, both Marketing and Sales are held accountable
to maximizing the number of appointments meeting the criteria
above.
Use the $100 test to prioritize product pricing/feature
set requests
Pricing is another classic source of conflict
between sales and marketing. Sales tends to blame pricing
as a sales inhibitor especially in highly competitive deal
situations. Marketing tends to discount the issue as a sign
of poor salesmanship. The problem is that no one is stepping
back and looking holistically and prioritizing what matters
most to customer acquisition which is always a combination
of pricing and product feature set or value proposition.
I recommend getting reps from both organizations together
in a room and giving everyone an opportunity to allocate
$100 across a number of perceived inhibitors to winning
profitable business. The operative words to focus the team
are “winning” and “profitable” business.
Have them write down their spending mix on a piece of paper
to avoid group think. If people are forced to distribute
$100 across, say, the top ten topics including pricing and
some feature gaps, you’ll find that pricing may not
the #1 sales inhibitor or competitive issue.
I encourage you to apply all three practices
here over the next quarter and see what impact it has on
closing business. I promise you that it won’t stop
the bickering, name calling, or even occasional fist fights.
But it will force some goal congruence between two key functions
that absolutely must align to support your business objectives.
Sridhar Ramanathan is founder of the Pacifica
Group, a management consultancy specializing in strategies
and tactics to drive revenue growth. He can be reached at
(650) 355-9700 or sridhar@pacifica-group.com Copyright ©
2004.
“Dude, We Need Your Business”:
Dell Heads Toward Q4
By: Stan Schatt Senior Director of Research, Current Analysis
A recent Wall Street Journal article highlighted Best Buy’s
decision to triage its customer base by focusing on the
most profitable segments and merely paying lip service to
the “tire kickers” and purchasers of loss leaders.
Conversely, Dell posted full-page ads embracing these customers--Dell
needs every new customer it can get. Does this sound ridiculous?
After all, Dell just reported record earnings and announced
it was on course for a $49 billion sales year. The truth
is that while Dell generates 8% profit margins on PCs, its
newer product categories are not profit centers. The company
took on Cisco two years ago when it began offering networking
products but it has been very quiet about switch sales ever
since. Complicated network configurations do not fit the
Dell business model. The same can be said about storage
area networks (SAN). Dell has a partnership with EMC to
produce a low-end ($15,000) SAN product that targets small-
and midsized businesses. Only a handful of these companies
are likely to have IT departments that do not require significant
support when it comes to SANs. In this market, Dell is competing
with value-added resellers who specialize in support for
such products. Would you rather buy a SAN from a nearby
VAR dedicated to supporting you or from Dell, dude, and
hope the phone support is more than just superficial troubleshooting?
It’s no secret that printers have become a major success
story for the company. Dell claims significant (19%) market
share of the inkjet printer market and entered the color
laser printer market in September. Yet, Dell’s death
struggle with Hewlett-Packard has taken much of the joy
out of what could be five million printers shipped this
fiscal year by the direct market giant. HP has cut margins
to the bone on its PCs to compete with Dell. Subsequently,
Dell has responded by selling printers just above cost,
often bundling them with systems at no cost to create a
customer base for highly profitable printer supplies in
the future. Of course, the fact that HP’s highly profitable
printer business subsidizes its PC business makes it easy
for Dell’s Kevin Rollins to say that anything that
hurts a rival is good strategy for Dell. This war is similar
to the Cold War arms race that almost bankrupted both the
Soviet Union and the US. We won when the old Soviet Union
imploded. The jury is still out as to whether Dell or HP
will be the first to surrender and end the war. Dell recently
added Fuji-Xerox, Samsung, and Kodak to the list of companies
providing it with printers that carry the Dell brand. Unfortunately,
Dell’s sales model limits its success in selling profitable,
high-end multifunction printers to large enterprises where
managed print services or extensive support are major drivers.
So, if most major research firms are forecasting a very
moderate holiday sales climate for PCs, where is Dell going
to get its fourth quarter push? One possibility is consumer
electronics, particularly plasma TVs and MP3 players. Unfortunately,
industry-wide sales have not been significant enough to
create an economy of scale and reduce the price of the former.
Dell sells a plasma TV model for $3649 and it is too soon
to tell if consumers will spend that kind of money sight-unseen
simply because the TV has the Dell label on it. Further,
the company sells its own MP3 player to compete against
Apple’s iPod. Reviews have judged the iPod superior
and retail sales of the product confirm that Dell is playing
the tortoise to Apple’s hare in this category. What
about services? Dell is highly optimistic about increasing
the range of professional services it offers to small- and
mid-sized businesses. The problem here is that Dell is relying
on unnamed partners because its business model doesn’t
permit an expensive, salaried services group. If Dell has
to split revenue with partners, the actual profits won’t
be significant enough to alter its bottom line. Meanwhile,
CompUSA and Best Buy are capitalizing on their own branded
support for small businesses and individual consumers; Best
Buy calls its group the “Geek Squad.” If a geek
arrives at your door this holiday season, they are not likely
to be wearing a Dell shirt and that could make this last
quarter of 2004 a lot less cheery for the folks in Round
Rock, Texas.
For more information about Current Analysis, our services
or our analysts, please contact our marketing department
who will assist you in your request.
Gift Cards Top Wish Lists This Holiday
Season
By Patricia Lloyd, Channels Analyst - Current Analysis
Gift cards will be more popular than ever, with two-thirds
of shoppers intending to purchase them this holiday season.
According to the National Retail Federation, those purchases
will total $17.34 billion. Many retailers are responding
to this trend with innovative card designs, packaging, and
promotions.
Current Perspective: Many people would be delighted to find
gift cards in their stockings this holiday season. The cards,
once considered a thoughtless gift, have edged out apparel,
the perennial favorite, as the top gift choice. Retailers
willing to embrace this trend can take advantage of opportunities
this December and beyond. The dollars spent on gift cards
are waiting to be converted to sales after the holidays.
It is in the retailers’ best interest to get the customers
in the store to redeem the cards as soon as possible. While
they get the cash, retailers don’t get the revenue,
or make the sale, until the shopper uses the card. Current
Analysis suggests retailers use after-Christmas messaging
in advertisements to encourage consumers to use gift cards
during January sales. Gift cards are excellent incentives
to sweeten promotions. A popular offer is to buy a specified
digital camera and receive a $20 gift card. This type of
promotion allows a vendor to sell a product at full retail
price, yet provide an incentive to purchase it at a certain
store. Particularly for product categories that follow a
strict MAP pricing structure, this type of promotion pulls
sales from competitors.
Even better news is that when the consumer redeems the $20
gift card, chances are they will purchase more than $20
in products. Using the gift card will typically result in
an additional visit to the store and give the retailer another
opportunity to sell accessories and provide customer support.
The growing gift card trend extends the holiday shopping
season past December 25th and provides opportunities for
retailers to fatten sales in the leaner winter months.
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