Many computer buyers prefer to serve themselves by shopping on the Web, and computer marketers are more than happy to comply. In fact, cataloger/retailer CompUSA is eliminating its personal computers and peripherals catalog, CompUSA Direct, in favor of the ‘Net, beginning in the fourth quarter of its fiscal 1999.
The $5.3 billion company’s three-year-old online business was growing more than 100% annually, according to spokeswoman Suzanne Shelton, so in March it formed CompUSA Net.com, a wholly owned subsidiary devoted to Internet sales. And in its first month of operation, sales from CompUSA Net.com already represented 4%, or $68.2 million, of the company’s overall $1.69 billion in revenue for its third quarter (ended March 31).
Given the competitiveness of the market and the price-sensitivity of today’s consumer, print catalogs “just didn’t fit into the company’s go-forward strategy,” Shelton says. The company is working on transferring its direct mail customers and corporate clients to CompUSA Net.com; those customers without Internet access are being directed to sales representatives at local retail stores. CompUSA is uncertain as to whether it will fold the entire CompUSA Direct division, which includes a field sales force, or integrate the sales team into CompUSA Net.com. But the company will still operate its more than 200 CompUSA stores and plans to open 15 to 20 stores in the next year.-SO
Tempe, AZ-based computer marketer Insight Enterprises on May 10 merged with $460 million London-based Action Computer Supplies in a stock deal worth $150 million.
Insight has grown sales to $1.1 billion by selling computers via catalog, telephone, and Internet to small and midsize businesses. Action markets computers and office equipment to customers in the U.K. and Spain through six catalogs. According to Insight spokeswoman Valerie Paxton, the deal will give the combined companies 1999 revenue of about $2 billion. Insight said it will offer 0.16 of a new Insight share for each Action share, valuing each Action share based on Insight’s May 7 closing share price of $26.63. “The beauty of the merger is we will introduce our outbound telesales model to Action Computer,” Paxton says. Action will also integrate its catalog and e-commerce operations with Insight’s, she says.
Insight plans to further penetrate the European market via acquisition. Over the past year, it has acquired two smaller overseas businesses: Germany-based Computer Profis and U.K.-based Choice Peripherals.-MDF