Vendors tight-lipped over boycott threat

Vendors tight-lipped over boycott threat

Vendors were very wary in their reaction to suggestions last week by Harvey Norman that it would cease dealing with any of its suppliers which moved to sell direct to consumers (ARN April 7, page 1).

If Australia's largest PC manufacturers are considering online direct selling initiatives in the face of dramatic market share growth by channel-bypassers like Gateway and Dell, then they are doing it covertly.

Brent Marcombe, Hewlett-Packard's consumer marketing manager, reaffirmed his company's commitment to the channel saying that, at the moment, "it is working fine for us".

However, he did add that all the evidence points to a rush of Internet sales in the future which is going to change the channel model in ways which are not yet clear.

"I see the issue a little bit differently," Marcombe said. "What HP and its channel has to do is ensure that consumers can buy product the way they want to. Clearly, one of the undeniable trends we are seeing is that people are going to want to buy over the Internet.

"I would assume Harvey Norman would be looking at some sort of Internet strategy," he added. "If they don't, they are going to miss out on all of that business."

Neither IBM nor Compaq wanted to buy into an argument they both claimed had nothing to do with them. Philip Bullock, IBM's local general manager, personal systems group, said IBM has stated many times recently that it has no intention of selling direct in Australia.

"There is no secret agenda," he said, and didn't care to comment any further on the remarks made by Harvey Norman's general manager, computers and communications, Tony Gattari.

Greg Healy, Compaq's general manager, business and consumer, was not available for comment, but a spokesperson said it has "an existing relationship with Harvey Norman and if we were to react to the comments that have been made, it would be through that relationship".

Only Marcombe was willing to take the point any further.

"HP's business is very broad and on the Unix side of things we do sell direct," he said. "However, we have no plans to sell direct on the consumer side of things nor anywhere in the Wintel area of the business."

"The issue is: 'How does a vendor allow a customer to buy over the Net?'," Marcombe said. "One way of doing this is to sell direct. Another way is to come up with a model that embraces your channel in allowing an end user to buy over the Internet. That is HP's preferred path.

"HP's model is to say that we think we can take the strengths of the channel with a new delivery model and add value to the customer."

The Harvey Norman model, which has been based around selling product to first-time buyers, has added value by offering convenience, range and "knowledgeable sales staff", he said.

Retailers not willing to back HN - page 26.

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