Compaq has finally confirmed it will open its first Sydney Compaq Connect stores in mid September, operated by a franchisee, and also plans to open a CBD-based, Compaq-owned configuration centre.
The move follows the successful implementation of the controversial direct stores in Melbourne, which, according to Compaq, turned a profit in under a year.
At the same time, Compaq yesterday detailed the motives behind a massive advertising campaign in Q3 designed to educate the market that it is more that just a PC maker.
Compaq Australia/New Zealand's VP and managing director, Ian Penman, said the new Connect franchisee will open up to three stores in an as-yet-unnamed Sydney suburb.
"He's [the franchisee] also asked if he could build our CBD store but I might want to use that as one of our R&D stores, put one slap bang in the heart of Sydney," he said.
Penman told ARN yesterday he was clearly pleased with the fact that the Sydney franchisee was a former white box PC supplier. According to IDC, white box manufacturers hold up to 60 per cent of the PC market, and it's this market Penman is determined to overrun with Compaq products under the Compaq Connect strategy which, as previously reported, includes the stores, Web site and call centre.
"We may keep a couple of the stores as our own stores, but even the eight stores we've got we will make available to be franchised.
"We never actually intended to own these stores, we just wanted to test whether or not they would work," he explained, stating Compaq had to take the risk and prove both the stores and the hybrid channel/direct model could work.
In addition to the new Sydney store, Compaq is making an effort to look after its national retail chain with a trial of the kiosk concept. Designed to offer customers the "convenience factor", Penman said PCs could be configured and ordered from the kiosks set to appear this month in leading retail outlets.
"So we're not in any way ignoring our existing partners," he said. Meanwhile, Penman explained a national advertising campaign planned for Q3 reflects its desire to promote its total product and solution sets.
The company's Q2 results, released this week, illustrate the motive behind the campaign. Compaq turned in incremental growth in Enterprise Computing and Commercial PCs, but saw either flat or declining revenues for its services business.
Penman admits a cohesive professional services business is lacking in Australia and around the world, which renders it vulnerable to services-dominated companies such as IBM GSA.
"There are about eight practices that we engage in actively today, I think we should concentrate on just three or four," he said.
Two areas of strength include telecommunications, e-procurement, which leave open a raft of opportunities for existing and new partners to complement Compaq's business. "So we decide what we can do and then we find partners who can fill in those gaps," he said.
Compaq recently hired advertising wiz Bill Merrick as its new director, marketing communications, who will drive the branding and corporate positioning campaign in Australia and New Zealand.