Direct PC vendor Dell is aiming to ship 50 per cent of its sales through the Internet within three years, firmly positioning the Net as a core business unit.
?The Internet is proving to be a very efficient model," said Scott Eckert, director of Dell Online. ?It is a step towards reducing the cost structure because sales staff can be moved ?up the food chain? from doing zero added value work to adding real value.?
Eckert said that 95 per cent of the transactional sales model can in theory be moved to the Net. Since the launch of Dell Online in the US just over a year ago, he claimed, sales representatives had become 50 per cent more efficient.
According to Dell, the company now conducts $4 million of business a day through the Internet in the US. In Europe, where Dell Internet has been up and running for six months, the company takes around $5 million a week, or around five per cent of Dell?s global business.
Gordon Ballantyne, director of Dell Internet Europe, claimed that the success of Dell Online had been largely a result of the direct business model.
?Our main competition has come from the other big direct vendors, especially Gateway 2000. But they have not invested as much as Dell in the Internet, and do not treat the Internet as part of the core business," he said.
?The indirect competitors are having a much harder time of it because they are all facing third party conflicts with their channel,? he added.
Ballantyne was eager to dispel the perception that Europe was light years behind the US in terms of Internet development.
?We believe Europe is in fact only around nine months behind the States,? he said. ?In fact, our research has shown us that potential customers who visit our Web site in Europe are twice as likely to buy something than in the States.?
He denied that the weaker telecomms infrastructure and cultural diversity of Europe was problematic.
?When we talk of Europe we are mainly saying the UK, France and Germany. In France, where many - including us - thought the take-up time of the Internet would be slow, we have actually experienced higher growth than in any other business area.?
?The biggest challenge we are facing is in keeping up with demand, which is presently hugely outstripping supply. This is a massive opportunity,? he added.
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