EXCLUSIVE: 90% Of OZ CE Retailers Have No Internet In Stores

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A survey of IT and consumer electronics retailers in Australia has revealed that over 90% are unable to demonstrate Internet enabled devices because they have no broadband connection in stores.The shock result comes as major vendors used the CES show in Las Vegas to roll new IP enabled TVs, Ultrabooks, tablets Internet enabled audio systems as well as new IP enabled cash and carry automation systems.

Among the chains that are unable to demonstrate Internet connected devices in their stores are Harvey Norman, Bing Lee, The Good Guys, Myer, David Jones, JB Hi Fi, Retravision, Wow Superstore’s and Betta Electrical.

Terry Smart, the CEO of JB Hi Fi who has a close dealer relationship with Telstra, said that his company was close to rolling out a new broadband network across their retail stores.

Tim Barnes, a senior LG Australia executive said “it is a major problem especially as almost every new IT and consumer electronics device is IP enabled. We have new IP enabled TVs home theatre kits and sound systems. The issue is who will pay, the vendor or the retailer?”

A senior Samsung executive who did not want to be named said “The retailers want the vendors to pay as they see broadband as a cost item. This is not necessarily going to work. Harvey Norman for example sees broadband as a profit centre where each vendor is charged a fee for access to fua Harvey Norman network. It’s a bit like their Co-Op advertising which for them is a big profit earner with all of their advertising funded by vendors”.

The Samsung executive went on to say that the issue is “extremely serious” as the bulk of retailers are now selling IP enabled devices. “If consumer electronics retailers are unable to demonstrate how an IP enabled device works in their stores they are going to lose a sale to the likes of Apple, who not only have Internet in their stores, but allow consumers to browse for free”.

Steve Rust the CEO of Panasonic said “The issue is big and serious, most of the products we are now launching are IP enabled TVs and are a classic example. They not only have new display technology but smart TV capability, applications, tablet controls and voice activated remote controls all working via an Internet connection.”

Rust said that another issue was education and training: “In store the person selling IP enabled technology is going to need information at hand as there is a lot of information for them to absorb. They are going to need to demonstrate new products and without an Internet connection it will be hard.”

 

Rust agreed that Internet in stores was as important as the electricity used to power the devices.

When asked as to who should pay for Internet connections in stores he said “the retailer”.

Rust said that currently vendors are giving retailers “excellent” margins, co-op dollars for advertising, warranty support and take back trading terms.

A Harvey Norman franchisee in Sydney said “the big issue is cost. We have slow sales and no margin left in TVs, and to introduce internet into stores is a major cost element. We already have extensive electricity bills due to the amount of devices that need to be powered on every day to layer on an additional cost that could be as high as our electricity costs is not viable. If a vendor wants to demonstrate one of their products they should supply each retailer with an Internet connection or pay the retailer a monthly fee to demonstrate their devices.”

ChannelNews is still waiting on the Australian Retailers Association to respond. In the USA last week ChannelNews visited several retail stores including Radio Shack, Lowes and Best Buy where Internet was freely available for consumers to try out a an Internet connected device.

If you want to comment on this story send an email to dwr@4squaremedia.com

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