Parent CompUSA Looks to Rethink Its E-Commerce Strategy
BOSTON–Computer retailer CompUSA has pulled advertising for its struggling Internet commerce division from Mullen and placed the agency on 90-day notice.
CompUSA took the action two weeks ago after an estimated $10-15 million TV campaign launched in October failed to stimulate holiday sales.
The client plans to substitute CompUSA-brand spots for Cozone placements if new advertisers cannot be found to fill TV time already purchased, said CompUSA representative Suzanne Shelton.
Executives with Mullen, hired by CompUSA in April, referred calls to the client.
“We won’t need their services,” Shelton said of the Wenham, Mass., agency. She did not go so far as to blame Mullen for failing to drive sales.
Cozone’s debut TV campaign from the shop starred celebrities such as basketball player David Robinson, Donald Trump and pop psychologist Dr. Joyce Brothers. Though the humorous ads were well received in creative circles, Cozone’s sales grew only $1.5 million–from $6 million in the third calendar quarter to $7.5 million in the fourth quarter, said David Goldstein, president of Channel Marketing, a research firm in Dallas. For its second quarter ended Dec. 25, CompUSA reported a $16.8 million loss for Cozone.
The company said in a written statement: “The sales results at Cozone.com were well below the company’s expectations and the company is re-evaluating the role of Cozone.com in the company’s overall e-commerce strategy.”
Analysts who follow CompUSA said a lack of synergy with the parent company doomed Cozone from the start. It is unclear if the Cozone brand will continue, Shelton said.
CompUSA has also shifted Cozone’s marketing and advertising operations from Cozone’s Marlborough, Mass., office to CompUSA’s Dallas headquarters. CompUSA is being bought by Grupo Sanborns, a Mexican conglomerate, for $798 million. The buy is expected to close by month’s end. K
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