ASX-listed distributor, Cellnet (ASX:CLT), is making a concerted effort to build out its retail presence by opening up access to its telco, IT and accessories portfolio to retailers and mass merchants.
The distributor's recently appointed retail general manager, Elaine Schillinger, previously headed up retail at flash memory specialist and Melbourne-based SanDisk distributor, VME Systems. Cellnet acquired VME in October 2006. Schillinger said her main priority was to use the front-end systems, relationships and expertise built by VME to grow Cellnet's retail practice.
"Our overall focus is to optimise our skill base, but also to offer the product mix we have across the three divisions within Cellnet to our retailers," she said. "We have IT, telco and accessory products that we can now offer to retail, whereas before we were just SanDisk.
"That presents a lot of opportunities for potential vendors as well because the [retail] relationships already exist through VME."
As an example, Schillinger said it was now driving Cellnet's telco accessories lines through Harvey Norman.
"Traditionally, telco accessories through the channel went well, but they haven't done so well on the retail side historically," she said. "Cellnet didn't have the supporting front-end to push that, but [through integration with VME] we have that now."
Cellnet's retail team will also offer IT hardware from Acer, Asus and Lenovo to retailers where opportunities existed, Schillinger said. Other products suited to retail included Bluetooth units, bags, accessories and Cellnet-branded products.
On the other side of the fence, Schillinger said Cellnet had just expanded its relationship with Canon to take on more retail-oriented products including digital SLR cameras.
"This will appeal to the traditional photo space VME has been working in for the past five years," she said.
Up until earlier this year, VME functioned as a subsidiary of Cellnet. Schillinger said she had spent the past few months integrating VME's retail operations with Cellnet's. The total retail team now consists of 18 dedicated staff including two regional sales managers, sales and marketing support personnel.
Although VME planted its roots in the photographic dealer space, Schillinger said it had experienced mass merchant and CE market success and was confident this offered a strong base to grow Cellnet's retail business from. She agreed its broader strategy would also lessen the distributor's reliance on SanDisk for retail business.
"Price drops across flash memory are huge - between Q1 last year and Q1 2008 the prices have dropped by 54 per cent," Schillinger said. "There are some strategies in place to continue to preserve that revenue around upselling, higher capacities and looking for higher value products and we will continue to partner with SanDisk as they are a big part of our future.
"For us it's about balancing that out, and synergising and growing that [retail] channel with products that haven't been pushed out before."