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HP throws its bread online, but cuts through retailers' lunch

HP throws its bread online, but cuts through retailers' lunch

After much preening, testing and bated breathing, Hewlett-Packard yesterday launched "@ hp online", its latest sales initiative in the battle for the hearts and minds of the IT-savvy buyer.

Customers will be able to buy PCs, printers, palmtops and consumables from @ hp online with, in most cases, next-day delivery.

At the official launch at Sydney's Bondi Beach, Rebekah O'Flaherty, HP's commercial channel marketing manager, said Australians were increasingly drawn to the Internet. Quoting Australian Bureau of Statistics data, two million households are expected to be connected by early next year and almost half a million Australians made online purchases in the past 12 months.

As previously reported in ARN, fulfilment of @ hp online sales will initially be exclusively through its biggest reseller, Leading Solutions. However, to the customer it will appear to be an entirely HP Web site and telesales experience.

In terms of predicting @ hp online's success, O'Flaherty was rather coy but admitted to ARN that she would consider sales of $20 million in the first year to be something to celebrate. But almost as important as revenues, HP will be measuring customer satisfaction. These satisfaction ratings will include turnaround and post-sales support, she added.

O'Flaherty denied that the new online program will hurt its existing resellers, claiming instead it will complement its channel.

"We are targeting a completely different segment of the market than our resellers," she said. "We want to reach the customer who is buying from Dell and Gateway, not the consumers who purchase from the channel."

When asked to define who she thought those customers might be, O'Flaherty said: "We haven't researched this but I have a hunch our online customers will be the SOHO market, the savvy computer buyer who is technically aware and maybe upgrading to their third PC."

But one of Australia's biggest mass retailers has reacted to the launch with predictable anger.

John Slack-Smith, Harvey Norman's incoming general manager for computers, claimed: "Those 'savvy' educated computer buyers Rebekah is talking about are our customers. They enjoy shopping at our stores because we offer them a range of technology they can't see or experience anywhere else.

"The HP Web site cuts right across our customer base," he added, describing the future of the relationship with the vendor as "the 64 million dollar question".

According to O'Flaherty, HP has been talking with the channel for some time and she believes that the channel needs to rise to the challenge and adjust with the changes in the market.

The @ hp online store is at http://www.buy.hp.com.au


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