Ideal Hardware Plc, the UK wholesale supplier of data storage products, is gambling heavily on the internet to gain its competitive advantage with a slick new customer information service built around its web site. The New-Malden based company has just changed its year end and in the fifteen months to August 2, net profits rose to 7.0m pounds from 5.2m pounds in the prior twelve months with turnover climbing to 221.6m pounds. Business grew by 16% in the extra three months, traditionally the company’s quietest quarter, according to finance director Simon Miesegaes. Ideal is aiming for earnings growth of 20% per annum, the key to which lies in adding value to its distribution process. In our business, if you can’t add value to the equation, you’ll soon run into trouble. The internet will be what sorts out the men from the boys, said managing director James Wickes. Hence Ideal’s all embracing new internet strategy. The company currently has a customer network of around 9,000 resellers, the top 500 of whom are connected to Ideal’s satellite television network, which provides daily programming on IT topics. Ideal is now shifting the whole customer information service onto the internet. Detailed information on the product range will be available to registered customers via a web site, allowing sales staff to focus on more strategic issues. Technology licensed from Cromwell Media Ltd, the company in which Ideal took a 33% stake in February, allows account managers to monitor the amount of time customers spend browsing information on which products. Wickes says the single biggest customer complaint at the moment is the inability to get information from sales staff as they are constantly on the phone. Web site usage is growing by 30% per week and Ideal now has 14,000 registered users, the company said. The follow on challenge will be to get customers to order their goods via the web, but web commerce has been notoriously slow to catch on. With the majority of companies running a separate purchase order system, there simply isn’t a compelling business proposition for shifting orders to the internet.
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