Mail Order v. Retail: Building a Mass
No amount of clever marketing
will help if you cannot get your products to your customers.
Sinclair has always paid a great deal of attention to his
companies' distribution methods, which have often tended to
be something of a problem. The British high street in the
1960s and 1970s looked very different to how it does today.
Consumer electronics were nowhere near as widespread as they
are today. There were specialist shops where you could buy
ready-made products, but many people preferred instead to
build their own. There was a thriving hobbyist culture, particularly
in radio, which had received a big boost during and immediately
after the war as ex-military signalmen returned to civilian
life and surplus military radios fell into civilian hands.
Sinclair himself came on this scene very early in his teenage
years, while he was at school in the 1950s, and turned it
into a career - first by writing for hobbyist journals, then
by developing his own products.
Mail-order was the key to Sinclair's success. His companies
have always used this means of selling - in fact, conventional
high street retail has only intermittently been used by Sinclair,
mainly during the 1980s home computer boom. Advertising costs
may be high but all sales are firm and pre-paid. This does
come with a temptation to launch prematurely, banking the
cash before the product is ready. Although Sinclair has criticised
other manufacturers for this practice, it is a sin of which
his own companies have been guilty, as mail-order purchasers
of the Sinclair QL will remember vividly. To be fair, this
was the result of miscalculating production and development
timescales rather than anything more underhand; but knowing
this probably wouldn't have done much to pacify irate customers
waiting for their orders to arrive.
Mail-order also has the advantage of raising a product's
profile. Speaking in the 1980s, Sinclair observed:
Mail order is a very useful way to get
the story across. Not that big a proportion do buy on mail
order, but they do see the ads, and that helps to prepare
them for buying when the items do appear in the shops.
(Tycoons, p. 158)
But which shops? This was a far from trivial problem for
Sinclair in the early 1980s. There were no high street computer
shops, simply because before Sinclair there was no mass market
for home computers. This issue came to the fore with the launch
of the ZX81. Its precessor, the ZX80, had done very well with
sales of 70,000 units, but nobody was sure whether this was
a fluke or the start of something much bigger. Sinclair believed
in the latter scenario, of course; but could he convince others?
Mail order had served the company well but it would not be
sufficient to launch a mass market.
It was Sinclair's good fortune that one of Britain's biggest
chain stores was going through a rocky patch. W.H. Smith &
Son, bookseller and newsagents, had become stagnant and stuffy.
In 1973, the company hired John Rowland as its new managing
director with a brief to revitalise Smith's image and product
range. He was sufficiently far-sighted to see, at the end
of the 1970s, that home computers were becoming a Big Thing.
Rowland established "computer corners" in larger
branches of Smith's, where computer books, magazines and perhaps
even some actual computers - usually Commodore PETs - were
clustered. They were an instant success and prompted Rowland
to approach Sinclair with a view to distributing the ZX80
in its stores. Sinclair advised Smith's to wait a few months
for the launch of the ZX81. In January 1981, Sinclair showed
Rowland a (non-functioning) model of a ZX81 and convinced
him to sign a deal enabling Smith's to sell the machine on
an exclusive basis up to Christmas 1981.
For Rowland, this was a big gamble. The ZX81 certainly didn't
look like anything worth making a fuss about (and its display
was a boring black and white, unlike the colourful graphics
generated by the PET). The company's buyers were sceptical,
recommending launch orders of only around 10-15 units per
branch. Rowland stuck his neck out and insisted on making
the ZX81 the centre of a major promotional campaign. Although
the deal with Sinclair was signed in January 1981 and the
ZX81 launched in March, it was not until September that Smith's
took delivery of the ZX81. It must have been a nervous wait.
In the event, the ZX81 was far more successful than anyone
had anticipated - W.H. Smith sold in excess of 350,000 machines,
making a profit of around £10 million.
W.H. Smith's startling success prompted other high street
chain stores to get in on the act. In February 1983, Sinclair
contracted Prism Micros to act as his UK distributor. ZX81s
and Spectrums were now available from Boots, Currys, Greens
(part of Debenhams), John Menzies, John Lewis and the House
of Fraser, among many other outlets. By this time, only 10
months after the launch of the Spectrum, 200,000 units had
already been sold by mail order and another 12-15,000 per
week were being sold from UK retailers. It was no wonder that
Sinclair soon gained a share of over 40% of the UK computer
market, a figure never equalled by any manufacturer before