Big Blue today said that customers will be able to buy Aptiva PCs at a handful of OfficeMax stores, as well as online. Yesterday, IBM announced that after January 1, consumers in North America will have to go to the ShopIBM Web site to get an Aptiva system.
The computer maker also clarified its strategy for promoting its online sales, announcing a $20 million ad campaign. As reported yesterday, analysts said selling online would be a challenge to Big Blue because it spends so little to promote its Aptiva brand.
The flip-flop reinforces the struggles traditional PC manufacturers have had in coming to grips with so-called direct sales. The success of Dell Computer and Gateway in marketing directly to consumers has encouraged IBM, Compaq Computer, and others to adopt direct sales, but the approach risks these companies' relationships with established retailers and has caused no little confusion.
The OfficeMax retail efforts mark IBM's latest brick-and-mortar sales strategy. In June, IBM launched a pilot program in several OfficeMax locations, a "store-within-a-store" concept. Under this plan, a section of the store specializes in IBM products, a move that has been successful in Japan.
"Think about why it works in Japan and why we hope it will work at OfficeMax, vs. what happens when you go in another retail store," said IBM spokeswoman Trink Guarino. "There might be 25 boxes on the shelf that look similar, and a sales staff with no incentive to sell IBM over another brand."
"How are you going to succeed in that kind of model?" asked Guarino. "We need to look at a model that works."
But the OfficeMax approach may not be the right one for Aptiva, said analysts, who point out that Big Blue created the stores within OfficeMax mainly to serve small businesses and not consumers.
The overall consumer strategy for IBM will be online, with OfficeMax remaining as a beachhead in the retail market and as a model for possible return to that market, IBM said. It plans to reevaluate its OfficeMax commitment after the first quarter.
Big Blue's retreat from retail is a result of the bruising competition in the cheap-PC arena, analysts said.
"IBM wants to play in the consumer space, but they may not want to play in the $299 PC space," said Kevin Knox, research director for the Gartner Group.
"IBM is not going to compete and win the price wars with Emachines and the rest of the crowd. You may see them continue in the higher end where they can bring differentiated solutions to the table," he said.
But sources close to IBM's personal systems group said selling direct on the Internet won't solve fundamental problems the company is having in driving any type of strategy.
"IBM is having difficulty implementing their online consumer strategy and they're way, way behind schedule," Technology Business Research analyst Joe Ferlazzo said. "Part of the reason they're behind is they're not making money selling to consumers."