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Technology Stocks : Compaq

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To: Aitch who wrote (39633)12/11/1998 3:25:00 PM
From: Lynn  Read Replies (1) of 97611
 
Back on track... The news item you posted notes that concerns in Compaq's PC business "are showing signs of improving." What I would like to know is if there are figures and statistics available for PC sales by specific chains quarter to quarter. I am asking because of all the people I know who intended (or intend) to buy a new PC since September, not one has ended up buying a Compaq, even though Compaq was one of the systems being considered when they started shopping.

What turned everyone off from buying a Compaq was the stores where they had to shop for one rather than anything about Compaq's PCs themselves. My sample is seven people [who already bought, four more are holding off to '99] in two, non-adjacent states. None of them have a CompUSA nearby. All of them consider Best Buy the largest PC seller in their respective areas. Three of these people are first time PC buyers. In all cases, it was the frustration of being able to catch a sales person then have him stay for more than the time it took to answer a question, that turned them off.

In one of these two areas, Gateway has just opened a store. Two people who decided to hold off on their new PC purchases until next month have already decided they are definitely going to buy Gateways since the store is there. They do not want to do mail order [computer novices, about to buy their first PCs] and are uncomfortable buying from Best Buy in case they need assistance after the sale. Three people who already bought PCs at the Gateway store said they had not really wanted a Gateway but bought one because of the post-sale support they felt they would be able to receive [from personnel at the store].

Listening to the recent PC buyers I know, what I'm hearing is that:

1.) there is still a large segment of the population that will not order a computer via mail order, even if it costs them more getting one at a local store;

2.) there is a sizable number of consumers who are turned-off from buying a Compaq purely because they are unable to get satisfactory sales assistance at the stores in their areas that sell Compaqs.

We all know Dell has done very well with it direct marketing approach. I'm wondering, however, if CPQ is inadvertently abandoning a sizable customer base by focusing more attention on direct sales and letting stores that offer little customer assistance, such as Best Buy, sell to those consumers who are shy of mail order.

Lynn
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