Computer City starts D.C. push
- By Margret Johnston
- Jun 07, 1998
The three Virginia stores in Vienna, Tysons Corner and Fairfax, and one store in Glen Burnie, Md., are at the same locations that Computer City closed 18 months ago in a retraction that affected 21 of its stores throughout the country.
The nationwide retailer hopes this time that its service and training offerings will help build customer loyalty in a region that has a high proportion of technically savvy consumers, including government buyers, said Nathan Morton, chief executive officer of Computer City.
Training and services currently are the only items on the Fort Worth, Texas-based retailer's General Services Administration schedule, but the company wants to add products manufactured under its Signet brand label, Morton said. Currently, about 5 percent of Computer City's business comes from the government sector. It aims to at least double that percentage, Morton said.
"We think a lot of our business will be with the government customer, first with the small businesses that serve the government and [second with] direct [sales] off our GSA schedule, then through our GSA schedule partners," said Morton, who was the CEO of CompUSA from 1988 to 1993.
The company, a subsidiary of Tandy Corp., with revenue of $1.9 billion last year, also plans to use direct marketing to pursue the hundreds of thousands of government employees who hold government charge cards in the International Merchant Purchase Authorization Card program, Morton said.
The four reopened Washington-area stores are the same "super" size as the previous stores— averaging 20,000 square feet— but have been reconfigured to include five new departments and will op-erate "much more toward the services," Morton said.
Only five of Computer City's 100 stores nationwide employ this concept, which includes an information center that offers a range of training opportunities, including one-on-one sessions as short as 30 minutes. Custom training courses are available as well as computer rentals.
The other new departments cater to such needs as business solutions, mail orders, image transmission and assembling systems from various parts.
Computer City's retreat from the Washington-area early last year was caused by a failure to "get beyond transactional" business, which required little more than putting goods on a shelf, said Travis Walker, director of strategic accounts for Computer City's eastern region.
Walker said Computer City has targeted the Social Security Administration and the Defense Department as potential government customers. One of its focuses will be selling network components, particularly those that make up wide-area networks, Walker said.
Computer City will compete head-to-head with CompUSA, the leading U.S. computer retailer with $5 billion in revenue last year and seven stores in the Washington area. CompUSA already has the jump on GSA schedule sales, listing 10,000 products, said Clint Newby, senior director of government programs at CompUSA.
"To be successful in the federal market requires a fair amount of investment on their part," Newby said. "You need experienced federal marketing representatives."
Newby said CompUSA has more than 150 locations nationwide, and the stores are within 50 miles of 95 percent of domestic government employees. "They find CompUSA convenient, and we have the product," he said.
CompUSA also has excelled recently through the National Institutes of Health's Electronic Computer Store II contract, winning a $19 million, three-year award last month to supply all Microsoft Corp. software licenses to the Department of Health and Human Services.
Terry Miller, president of Government Sales Consultants Inc., said it will be a challenge for Computer City to get GSA business, especially with the growing number of companies that offer products to the government through a GSA schedule.
Mark Amtower, president of the consulting firm Amtower&Co., Ashton, Md., agreed that Computer City's ability to capture GSA schedule sales is questionable.
"More sophisticated government buyers go online and buy and receive the product in 72 hours," Amtower said. "For services and training they tend to go back to places they've been before."