Personal home computer manufacturer Micron Electronics recently intensified its retail-direct business strategy by forging partnerships with Staples, RadioShack Canada and Outpost.com.
With its new business model, called VelocityNet Direct, Micron is working to extend its reach into commercial, Internet and international retail markets. The model gives retailers an alternative to the traditional supply chain. E-tailer Outpost.com, Staples and InterTAN Inc., which operates RadioShack Canada, last month signed letters of intent to distribute Micron computers.
The newest component of Micron’s VelocityNet Direct is the “replenishment-to-order” system.
This component lets retailers order in smaller volumes and receive faster delivery than that allowed by conventional supply chains. Shipments or preconfigured PCs can be delivered to retail outlets or distribution centers within one or two days as opposed to two or three weeks.
“In the retail PC world, the main obstacle is inventory,” said Barbara Gibson, spokeswoman at Micron Electronics Inc., Nampa, ID.
Joel J. Kocher, CEO of Micron, said in a statement that the new retail-direct model “will obliterate the old model because it solves the biggest problem PC retailers face — the profit-killing inefficiencies of the old retail supply chain.”
“Our retail partners provide micronpc.com [with] a high-volume demand engine that leverages our supply chain and product technology engine. At the same time, micron-pc.com provides our retail partners [with] rapid product deliveries, faster technology time-to-market and improved asset management. Our aim is to help our retail partners significantly reduce store PC inventory,” he said.
Micron launched its retail-direct strategy in April with initial partner Best Buy Co. Inc. The partnership led to a pilot program that combined retail and direct sales models.
Configure-to-order kiosks, which send customer PC hardware preferences directly to the Micron factory, were installed in 10 Best Buy stores nationwide. The program exceeded sales expectations, and Best Buy now has these kiosks in each of its 361 stores, Gibson said.