Future Shop entered the market to offer custom-built computers with the launch Thursday of the online Direct to U program.
The idea behind the plan is to let consumers select their base model for a notebook or desktop computer and include
only the components they want, rather than be saddled with “”that one HP package that suits all,”” explained Sean Wilson, divisional merchandise manager for Burnaby, B.C.-based Future Shop.
Future Shop has been testing for a similar program for a year and a half involving in-store kiosks, but the company found that configuring and ordering a computer from the comfort of one’s own home was more attractive to customers, Wilson said.
“”What we wanted to make sure was by adding this, at least, they have a separate choice, absolutely hassle-free. What we found in the stores was we had an older interface . . . which was a little clumsy. It got the job done but it wasn’t as easy to use.””
The in-store kiosk initiative appealed to small-business owners and tech-savvy consumers, whose needs Future Shop said it also expects to support through its online built-to-order strategy.
The cost for consumers to build their own system through Futureshop.ca depends on how elaborate their designs are, he said. “”In some cases they may want to pay more”” —— if, for example, they want the fastest video card on the market, the ATI Radeon 9800 PRO, which most branded computers don’t include.
“”So right from the get-go, they have the option of buying that video card with the PC, which obviously gives them savings because they don’t have to get that video card that is currently already on the motherboard from the brand name (computer).””
Although Future Shop doesn’t disclose sales, it believes its Web site will become its largest store in Canada and its Direct to U program will generate 20 per cent to 30 per cent of its computer sales. Wilson also thinks a free shipping policy will encourage consumers to buy from the West Coast retailer as opposed to some competitors that charge shipping fees of roughly $135.
The built-to-order computer market has seen many companies achieve relative success with different solutions, but no one in North America has had a strong in-store and e-commerce presence in both desktops and notebooks, said Wilson. Future Shop will market its Direct to U program through marketing at retail locations. The products will be manufactured by Seanix Technology Inc., based in Richmond, B.C.
One competitor, Tech Data Canada, has had two programs offering consumers the option to build their own computers since last year, also in partnership with Seanix. The programs allow resellers to design desktops and notebooks for themselves or their customers, while an agreement with Compal Electronics Inc. of Taiwan gives system builders the opportunity to assemble whitebooks, said Ray Gonsalves, director of product management for Mississauga, Ont.-based Tech Data.
“”There’s a growing demand for system builders to have their own configure-to-order systems,”” he said, adding the second quarter of 2003 was the first time Tech Data Canada saw revenues for notebook shipments exceed those of desktops.
The Seanix program, which is seven months old, has experienced “”month-over-month gains”” but Gonsalves can’t divulge numbers. He did concede, however, that Seanix has grown into one of Tech Data’s top 50 vendors from a revenue perspective. The deal with Compal, which began last November, has garnered more than 100 sales. “”That number’s small at this point, but it was well beyond our expectations out of the gate.
“”As people enter their third or fourth system, customization is definitely the way to go. And I think a lot of the success of Dell has been their ability to offer customization.””