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VICTORIAN VOICE: Come in spinner

VICTORIAN VOICE: Come in spinner

It's not a new phenomenon in the IT industry for the lines between direct selling and channel strategies to be blurred. Desperate to maximise sales from every possible revenue stream, vendors have repeatedly had no hesitation in exploring the possibility of bypassing traditional channels for a crack at direct relationships with customers.

Over the years, we have seen direct initiatives referred to as everything from "giving customers choice" to "investing in the future" and "building on brand credibility". Irrespective of how marketeers want to doctor the positive spin, the bottom line is that it is all about exploiting every possible means of adding health to their bottom line.

Generating more sales at the lowest possible cost is the key to success in an increasingly competitive market. Marketing corporations need to explore potential new routes to market.

Ever since Michael Dell rose to prominence with a revolutionary go-to-market strategy based around the Internet, traditional channels have felt the heat from experimenting vendors. There were lessons for all in Dell Computer's simplicity and cost-effectiveness. The selling of PCs was never to be the same again.

With its new ShopAcer initiative, Taiwanese vendor Acer is the latest to dip its toe into the direct-selling waters.

It is hard to criticise just one brand-name PC vendor for flirting with direct-selling strategies, because they all engage in it in some form or manner. However, some are more open about it than others and one in particular - hello IBM - is very aggressively pursuing it as a strategy. Big Blue offers price breaks to direct customers that make it hard for its channel partners to compete. It also engages in large-scale marketing campaigns that drive buyers to its direct sales Web site and call centre.

But the one indisputable fact in Australia is that it is just about impossible for any vendor to survive without a happy, healthy channel. The majority of end users still require significant value to be added to get the solution they need - now more than ever because of how crucial technology is to business methodologies these days. End users know that it is only their trusted reseller partners that can deliver that additional value for them.

I think it is fair enough for vendors to make their products available online as some customers do want to buy their PCs in this way. What is unpalatable is when they actively market the online sales in competition to resellers, excluding them from the equation altogether.

As has been proven in the past - particularly in the case of the backlash Compaq received over its failed direct retail initiative - resellers will not deal with vendors they believe are competing against them.

For this reason, any vendor experimenting with direct online end-user contact will always be sailing very close to the wind and perhaps risking more than there is to gain.

Gerard Norsa, ARN's Melbourne based editor at large, can be contacted at (03) 9690 2933 or gerard_norsa@idg.com.au.


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