Telstra Retail engages computer market

Telstra Retail engages computer market

Look out if a Telstra shop appears near you, because they are dealing with more than phones, faxes and phone bills. Telstra Retail Shops, a division of Telstra, has begun an aggressive push into the computermarket, already stocking PCs, printers, digital cameras and "top 10 software" in five of its 70 retail outlets.

The move will soon see Telstra become a substantial retailer in computer products, supporting its strategy of upgrading its stores to reflect the convergence of computer and communications technologies.

A spokesperson for Telstra Retail said that, as part of the big telco's business diversification, it had established retail outlets all over Australia, which are now being either relocated or refurbished. "As the refurbishments occur, the stores will take on the new products, and we expect all of them to be done during 1999," she added. The first of its new concept stores opened in Sydney's Westfield Miranda centre in August last year, but the rush is now on to upgrade all of the locations.

Telstra retailing computers and printers is one thing, but of particular interest is its choice of PC vendor, none other than direct marketing specialist Gateway. According to Telstra Retail, the deal with Gateway is great for customers who wish to individually specify their PC requirements, and enjoy the benefits of a retail environment.

Gateway marketing manager Michelle Vanzella played down the Telstra retail arrangement as "continuing our consumer strategy" and taking advantage of showroom space in the retail shops. She said that it was on a trial basis, and did not represent a divergence from Gateway's direct selling model. "Pricing to customers is the same as our normal direct model, and orders are placed on Gateway by them from the Telstra shops," Vanzella explained. In return for the retail showroom space, Telstra earns a commission on the sales.

Besides Gateway, other computer product vendors involved in the Telstra retail shops include Kodak, Epson, Canon and Hewlett-Packard.

In describing its move away from traditional phone and service type stores, Telstra's general manager of retail, David Stratton, commented that consumers will be able to experience the latest products hands on. "Customers will be able to take a digital photo, download it into a PC and print it out on a quality PC," he added.

Terry Wiley, director of the IT channel research specialist Inform Business Development, said the move by Telstra into computer retail was not unexpected, given its interest in converging technologies and the Internet in particular. "The number of retail computer outlets has been declining over the last two surveys, and their success depends mainly on being large or adding some kind of value," Wiley said. "A chain of 70 retail outlets will make them a big player in computer retail," he added.

The Telstra spokesperson said that the early indications from the first five revamped stores were very encouraging, and the next few refurbished and/or relocated Telstra shops would be operating by the end of February. These include two in Melbourne's CBD and one in Sydney's.

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