Thomson unveiled Thursday a new online retail initiative that calls for the manufacturer to sell RCA-branded products direct to consumers via a newly revamped RCA.com web site.
In announcing the arrangement via a media conference call, Thomson Americas senior VP Mike O'Hara said the site was designed to "enhance" the company's brick-and-mortar retail distribution infrastructure by giving consumers the most complete information on the full line of RCA products available. The site also offers e-shoppers referrals and directions to RCA dealers, called "experts," who have been "authorized" to carry the product in question in the shopper's area.
But the company is also making select products available direct from the Web site at prices that are roughly comparable to the average street retails. O'Hara said approximately 100 products will be offered at first, but plans are to significantly ramp up the online sales assortment.
The web site lists detailed product specs, descriptions and photos, and even allows viewers to peruse a product's owner's manual. O'Hara said the undertaking was reinforced by a recent CEMA consumer study that shows a large portion of today's CE buyers investigate a product purchase online before venturing to a store.
Although not currently offered, such items as DirecTv satellite receivers will be included in the months ahead, he affirmed. Products among the initial 100 include the new Lyra MP3 players, DVD players, cable modems and VCRs. However, O'Hara said there are no plans to extend the initiative to Thomson's ProScan or GE brands.
Asked why Thomson decided to include online direct sales on the Web site, O'Hara said: "There is going to be some portion of consumers out there who want a direct manufacturer-to-consumer relationship. We don't know what that percentage is. I will tell you that I think it is small and that the sales of direct-to-consumer in the scheme of what we sell as a company from an annualized turnover [basis] is going to be small. But for competitive reasons and to build a longstanding relationship with that consumer. we will make that option available."
Thomson is handling the venture as a wholly owned subsidiary called Thomson Direct Inc., separate from its traditional manufacturing and sales operations. PFS Web, an order-fulfillment company out of Plano, Texas, is under contract to handle direct-to-consumer logistic services. Consumers are offered three shipping options: FedEX, UPS or GeoLogistics for larger products and in-home delivery. Thomson's largest product offered online is a 61-inch projection TV.
Asked if authorized retailers would be offended by RCA.com's relatively aggressive price strategy, Thomson Direct VP Greg Bosler said, "Our pricing will be at Minimum Advertised Price (MAP) levels, and there will be a shipping charge. From discussions we have had with retailers prior to this initiative, we feel like they are comfortable with MAP plus freight pricing and don't feel like this will be a competitive threat to the profitability of the RCA brand."
O'Hara hinted that other deals and tie-ins with Thomson dealers are in the works, but gave no examples. Conceivably, the company could arrange online order pickup through an established brick-and-mortar account, sending customers to a store where they might also buy accessories and other goods. Conversely, a retailer's sale might be delivered direct to the consumer, when an outlet is too small to stock volumes of large goods.
"In terms of what links we intend to build over time with our retailers, we think there are opportunities to make the complete infrastructure of retail and the relationship we have with the retailers more efficient by marrying up some of our e-business opportunities," O'Hara said. Thomson is having discussions now with unnamed dealer accounts, he added.