Tweeter Seeks To Set Standard For CE E-Tailing - Twice

Tweeter Seeks To Set Standard For CE E-Tailing

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Having conquered the continent with its recent acquisitions of Home Entertainment and Dow Stereo/ Video, Tweeter is now out to tame the Internet.

Its forthcoming entry into e-commerce, Tweeter@Outpost.com, will be more than just another pretty cyberstore when it makes its debut this fall. The launch, a joint venture with pioneer PC e-tailer Cyberian Outpost, represents one of the first concerted efforts to bring some order to the wild and wooly world of online CE sales.

"Today, consumer electronics over the Internet is characterized by gray-goods retailers who are tarnishing the price/value equation," declared Tweeter president Jeffrey Stone.

Taking the high road, the specialty store pledges to sell only authorized goods online -- a tough road to hoe given that most major electronics manufacturers have yet to set distribution policies for the channel.

To push that process along, Tweeter sat down last month with 20 of its top vendors and laid its e-commerce cards on the table. "We put 20 presidents and vice presidents in a room and laid out our Internet strategy in detail," said Tweeter CFO Joe McGuire. "We told them that we will not sell their products online unless they say so."

Beyond that, the specialty retailer urged the manufacturers -- and, by default, the industry -- to establish a short list of standards that "anyone selling consumer electronics over the net should live by," said Stone. Those tenets, which will be fully embraced by Tweeter@Outpost.com, include a strict adherence to Internet minimum advertised price policies; a minimum of 120 hours per week of live sales support; a no-questions-asked 30-day return policy; and a true-price policy.

The latter point, explained McGuire, addresses cyberstores that offer bargain-basement prices but inflate the shipping or handling charges, which is tantamount, he said, to bait-and-switch tactics.

In the wake of its vendor pow-wow, Tweeter@Outpost.com has received "six yes's, no no's, and we're expecting some not yets" from manufacturers, McGuire reports. By the end of the day, however, the company expects that it will be able to offer between 700 and 900 SKUs of mid- to high-end CE products when the selling site launches in late September or early October.

In addition to lending its name, reputation and buying clout to the enterprise, Tweeter is bringing its sales training organization to bear for the 50-50 joint venture, as well as a $1 million equity investment in Cyberian. Tweeter will continue to operate www.tweeter.com, its current information-only web site, and, despite Cyberian's PC roots, will maintain its no-computer policy for Tweeter@Outpost.com. Said McGuire, "A nine- or 10-point business? The rest of the world is welcome to it."

For its part, Cyberian will bring its expertise in Internet technology and online merchandising to the table, and will lend its battle-tested call center operations to the effort. Distribution will also be handled by Cyberian, through its 20,000-square-foot pick, pack and ship facility in Wilmington, Del., next to which Tweeter has leased 40,000 square feet of warehouse space to house its cyber inventory.

Publicly traded Cyberian was founded in 1995 by CEO Darryl Peck. The Kent, Conn.-based company operates Outpost.com, a computer hardware, software and accessories site for consumers, small office/home office users and corporate, government and educational institutions. Cyberian is on the short list of online merchants to make the TWICE 1999 Retail Registry, ranking 81st based on CE sales of $68 million last year -- a 278% leap over prior year revenues.

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