Key America, the $3.5 billion buying group, has entered the e-commerce space by launching its first selling site, and by forging an online alliance with an undisclosed major merchant.
The new web site, www.keyamerica.com, debuted Aug. 30 and presently offers major appliances and microwave ovens by Whirlpool, Frigidaire and Amana. Orders are routed by zip code to the nearest Key America dealer, which, for $29.95, will deliver and install the product and remove the old appliance within three to seven business days -- and will arrive within a four-hour time frame on the assigned delivery day.
The site also features icons for consumer electronics and furniture, categories which Key plans to add to its online mix in the near future, and contains a back office business-to-business function that links members to their suppliers.
"We believe that the customer isn't interested in buying something from someone based in New York if he lives in Georgia," explained Key president Murray Provine. "All of our dealers have individual web sites that are linked to Key's home page, which gives our stores a presence as big as Sears."
By using Key's 2,600 storefronts for fulfillment, the group actually exceeds the delivery and service capabilities of Sears, which began selling appliances online last spring but is limited to some 700 units.
Key America is the second buying group to enter the e-commerce waters, following the $3.5 billion, 1,800-member Associated Volume Buyers group, which launched its www.brand-source.com selling site in July.
Separately, Provine said that "plans are in the works" for a joint venture with a major merchant that could conceivably sell goods online and use Key's nationwide network of stores for order fulfillment. "The local retailer may not have the resources to compete aggressively in marketing and advertising with a national marketer, and a national marketer lacks the local execution that our stores offer," he explained. "There are changes on the horizon, and those that are willing to embrace new business models are those that will win."
Provine said a formal announcement is expected within the next 90 days, but wouldn't identify the retailer, or disclose whether it is a brick-and-mortar merchant or Internet-only store.
"We're in revolutionary times," he said. "Exciting, but dangerous."