The more things change, the more they stay the same.
Two years ago, Compaq poached a Leading Edge retailer to open its first Compaq Connect franchise in Sydney's Castle Hill. Today, Compaq is but a brand name and the store is once again owned and operated by a Leading Edge computer retailer. Funtronics, which four months ago moved into the premises in Sydney's north-west, has just signed on with the independent buying group.
For Leading Edge CEO Keith Lane, the recruitment is a confirmation of the group's long-held position: retail operations, backed up by strong service and support, is here to stay.
"If you want to be successful in any business, you have got to focus on who you are and what you are," he said. "People have confused the emergence of Dell and the rise of the Internet but the reality is Dell has always sold direct, even without the Internet."
Lane said that although the Internet works for certain sectors, such as banking, information dissemination and transaction processing, customers still want to touch and feel the product. They also want choice.
"Take your most basic product, the TV. People are still buying those products in a shop. It's convenient to go to a shopping centre, to go and have a cup of coffee and buy items from a few different stores."
Funtronics proprietor and manager Marsel Islamoglu didn't need a lot of persuasion to join the group.
"As time goes on, independent retailing becomes harder -- the overall costs of running a store get higher but the profit is lower," he said. "No-one pays cash these days and things like merchant rates and colour catalogues really make the difference. The quality and control of Leading Edge agreed with our retail business and it automates the retail side of things so that I can concentrate on marketing and promotion."
The former Compaq Connect franchise, Nortec Computers, is still in operation, but the business has moved and the company will now focus on services.
Islamoglu said since moving to the new premises, Funtronics' business has doubled. The company also offers repairs and warranty services to its customers.
"Here we are picking up a different trade [compared to the old premises]. For example, our digital camera sales dropped a bit, but we now sell a lot more components than we used to."
Lane said the Compaq Connect model was doomed from the start because its direct approach did nothing but disenfranchise its existing partners.
"It's got to be a mutual exchange that is win-win for everyone. The minute that doesn't happen, the model ceases to work."