CompNow Chadstone confident in face of Apple Store incursion

David Braue
14 September, 2008
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It may have attracted hundreds of curious and eager shoppers with its shock-and-awe launch, but Saturday’s opening of the Apple Store Chadstone also opened a new dynamic in Apple’s channel strategy as the US-owned chain takes on Apple Australia’s own long-established channel partner CompNow.

CompNow, which has maintained a small but successful store in Chadstone for the past five years, now faces a direct threat from the Apple Store that has been opened nearly on top of it and, at 500 square metres, is around three times as large.

The only dedicated Apple Reseller in the shopping centre, CompNow has long competed successfully against general retailers carrying Apple products – JB Hi-Fi, Myer, and David Jones. Those companies sell a limited range of fast-moving Apple products like iPods and iMacs, but have generally done so as retailers rather than building up a large base of specialised staff.

With the Apple Store focused on being a knowledge centre via tutorials and its accessible Genius Bar, however, CompNow is no longer the only Apple retailer in the centre complementing Apple’s innovative products with a strong focus on customer service.

A glance at the CompNow Chadstone store during Saturday’s Apple Store opening gave a clear glimpse of the company’s strategy for fighting the incursion of the well-resourced and expanding chain.

‘Upstairs: higher prices, U.S. owned / Downstairs: lower prices, Australian owned’ read a prominent sign outside the store, which is also doubling customers’ RAM on new Apple systems as part of its strategy to fight the new store’s threat. A good number of customers were walking into and out of the CompNow store, confirming the Apple Store hadn’t taken all of the attention from interested shoppers.

Adam Blacklock, sales manager with the 10-outlet CompNow chain, is confident that sweeteners like free educational seminars and ongoing support will help it weather the threat from the Apple Store Chadstone.

“I can tell you that if you go into one of our stores and talk with staff about a problem, we won’t make you wait 4 hours until you can see a Genius,” he explains. “We will try to do a diagnosis on the spot, and promote our service centres with a 24-hour response on a diagnosis. We pride ourselves on that.”

Blacklock conceded the possibility that the Apple Store’s entry into the centre could spark a price war, but was confident it couldn’t go on too long before prices levelled out again: “we learnt about that in the iPod era where iPod pricing was absolute craziness,” he explains.

“Dodo Internet came into Chadstone and were selling iPods at like $2 above cost, but selling at that stupid price isn’t sustainable.” Dodo’s Chadstone store has subsequently closed.

Interestingly, the introduction of Apple Stores to Australia has put the US-owned stores on a collision course with Apple Australia, with which CompNow and all other local resellers are partners.

The effects of Apple US competing with its own subsidiary will become clear in the long term, but in the short term Blacklock is confident there’s enough of a market for everybody. “As much as we hate having competition come into our patch, at the end of the day this is seeing more people seeing the Apple brand,” he says.

“When you have the likes of Myer and DJ’s taking on product and people see it in those mainstream stores, it changes the mindset that Apple is just for designers. Initially, [the Apple Store Chadstone] will have an impact on the business, but in the long term it will be a very positive thing that we have that many extra Apple fans being drawn to the Chadstone Shopping Centre.”

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