Mohan: Very interesting article here....check out Platt's comments..amazing....
By Ephraim Schwartz and David Pendery
InfoWorld Electric
Posted at 6:44 PM PT, Oct 1, 1998
Hewlett-Packard confirmed on Thursday that it will expand the scope of
its online HP Shopping Village
to include mid-priced and high-end Pavilion PCs and monitors. Up until
now, the company sold only
refurbished models.
HP notified its retail channel including such chains as Circuit City,
CompUSA, Office Depot, and Staples
of the move earlier this week.
The move comes after the results of recent research of U.S. consumer
buying habits indicate 20 percent
of high-tech purchases are made directly from the manufacturer,
according to Susan Murdy, director of
Strategic Communications for Consumer Products at HP, in San Diego.
"HP Shopping Village enables us to reach this particular segment and
reduce the number of sales we
are currently losing to this segment," Murdy said.
The move was not unexpected. In July, HP officials said that the company
would do what was necessary
to satisfy the needs of all of its customers, consumer as well as
commercial.
"You can't ignore what Dell has done," said Lew Platt, chairman,
president, and CEO of HP. "Customers
like Dell's high touch model."
According to an HP representative, the high touch model referred to by
Platt means that
Hewlett-Packard will assume a direct relationship with certain customers
and become the primary
interface, no matter what method of distribution and delivery are used.
However, Platt would not identify any particular customer segment that
wants a "high touch" relationship
with HP.
"It's impossible to generalize, I could give you a list of names of
really large customers who have said to
HP, 'Either do business with us directly or you are not going to do
business with us,'" Platt said. "You
can't take any particular size of customer and say, 'this size customer
wants to go direct, and that size
wants the channel."
One former retailer said that for retailers, this kind of news no longer
rises above being an annoyance.
"It is annoying that your partners are also your competitors, but that
is just the facts of life," said Steve
Dukker, former senior vice president of merchandising at Computer City
responsible for both corporate
and retail sales.
According to Dukker, HP is just following the trend of all segments of
the industry participating in every
channel. He noted, with some irony, that Compaq now has configuration
kiosks in retail outlets, thus in
essence training the retailers' own customers how to buy directly.
Hewlett-Packard Co., in Palo Alto, Calif., is at www.hp.com. |
