The big storage Company is now blasting out continuous EDM’s to consumers who have registered their storage products online directly with the Company.
It appears that the Company has mounted an expanded direct sell operation in several Countries in an effort to get consumers who have purchased a product from one of their retail partners to then buy their next storage product direct from the WD Store, as opposed to buying from a mass retailer such as JB Hi Fi or Harvey Norman or the hundreds of IT specialist IT.
During the past three months I have received over 30 solicitations to buy Western Digital products directly, this is despite the Company being a major supplier to mass retailers and the specialist IT channel.
By direct selling to an installed base Western Digital avoid having to pay retailer margin which can be as high as 33% on a storage product.
What I have also noticed is that WD along with several other storage Companies are seriously prompting consumers to register directly with a Company when they purchased a storage product direct from an Australian retailer.
What they offer is free storage, updates or incentives for consumers to register.
Once registered the offers start to flow.
In some cases the price on the Western Digital WD Australian Store web site, is cheaper than via a retailer such as Harvey Norman. An example is the WD My Cloud EX48TB external hard drive. At Harvey Norman the drive is selling for $1097. Direct from the WD store the same drive is $949 a saving of $148.
We have asked WD to comment, but at the time of publishing this story we have not received any official comment.
The Company that is set to come under pressure from the likes of Samsung who recently expanded their memory and storage offering recently initiated a major cost cutting exercise due to a fall in sales via retailers and the specialist channel.
The cost-cutting and a move to direct selling resulted in the US Company posting a 2% increase in US third-quarter profit.
Founded in 1970 as a specialized semiconductor manufacture, WD entered the hard drive market in 1988 and became largely known for hard drives used in PCs. But faced with flagging PC sales, Western Digital expanded into the more lucrative market for drives used alongside servers and storage systems. Solid-state drives, or SSDs, are the mainstay medium for storing data in smartphones, tablets and other portable devices.
Overall, Western Digital reported a profit of US $384 million, $375 million, a year earlier. Excluding employee termination costs and other items, profit was $1.87, down from $1.94 a share a year earlier.
Revenue fell 4% to $3.55 billion, gross margin was largely flat at 29.1% while operating expenses fell 7% to $611 million.