Creative Pacific, the Australian and New Zealand distributor for sound and video card vendor Creative Technology, has started supplying directly to retailer Harvey Norman in New Zealand, cutting distributors Tech Pacific and Insite Technology out of that loop.
Creative Pacific's Australasian marketing manager, Kamil Gurgen, says the move reflects the way the company operates in Australia.
"We have been selling direct to mass merchant retailers in Australia for a long time," said Gurgen of Creative Pacific's relationship with Harvey Norman in Australia. "I don't see Insite and Tech Pacific being greatly affected."
Christchurch-based Insite general manager Craig Booth isn't jumping for joy at the development but nor is he prepared to openly criticise it. "The new model goes back to Creative Pacific's relationship with Harvey Norman in Australia," Booth says.
Creative Pacific already sells direct in Australia to the Coles-Myer Group, Dick Smith Electronics, Electronic Boutique, the Games Wizards and some other chain stores.
Tech Pacific marketing manager Scott Cowan is unperturbed, saying many vendors want to have direct relationships with retailers. "We don't think Creative Pacific going direct with a retailer will affect Tech Pacific in any way," says Cowan.
Harvey Norman's New Zealand computer division general manager, Richard Clark, says that until three weeks ago the company had no direct contact with Creative Pacific. "Now the distributor margin will be gone which will benefit end users and we'll have a closer working relationship which we are happy to go along with," says Clark.
Direct trend in NZ
Clark sees direct relationships between vendors and retailers becoming a new trend in New Zealand, saying that Harvey Norman welcomes going direct with those vendors which are interested.
"Going direct doesn't mean we are out to put distributors out of business," said Clark.
Harvey Norman currently has three company-owned stores (as opposed to the Australian franchisee model) in New Zealand and plans to have five by the first quarter next year.