Data Op Adds Retail Outlets

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High-speed Internet-service provider Excite@Home Corp.announced the expansion of its retail distribution network with the addition of two chainslast week: San Francisco-based consumer-electronics retailer the good guys! and nationaloffice superstore Office Depot.

Excite@Home's pre-installation kit -- which includesinstallation discounts and a CD-ROM demo of the system, but no actual cable-modem hardware-- already has a retail presence in about 150 storefronts, including nearly 50 CompUSAstores, according to Excite@Home vice president of business development Paul Salzinger. Hepredicted that 250 retail locations would sell Excite@Home by the end of the year.

Starting this week, Circuit City Stores Inc. will alsobegin to market the Excite@Home kit. The retailer is expected to carry the installationkit in 60 of its stores by the end of the year. It already works with MediaOne Group Inc.to sell the Road Runner high-speed service in a few markets.

"Retailers are excited about their ability to sellthis because it's a new technology," Salzinger said, adding, "We'rehelping to drive traffic" to their stores.

Merchandising manager Dominic Leung said the good guys!placed the Excite@Home demonstration kiosks in 12 of its retail sales floors over the pastweek or two, and it plans to add the service to as many of its 79 West Coast-based storesas possible as soon as it's feasible. Store managers that weren't chosen amongthe first to carry the product have expressed their jealousy, he added.

The entertainment retailer -- which dropped its PCdepartment several months ago -- wants to make broadband Internet a new store category.Leung said. It is placing Excite@Home -- the first in a line of broadband products thatwill likely include competitors such as digital subscriber line -- as close to the frontof the store as possible.

To draw customers into the stores for demonstrations thispast weekend, the good guys! advertised a drawing for a $100 gift certificate for storemerchandise.

Initially, the displays use CD-ROMs to demonstrate theservice's high-speed capabilities. But ultimately, the good guys! hopes to have itsstores wired for cable wherever feasible so that its sales staff can demonstrate featuressuch as full-motion video using live Web sites.

The retailer went to market with the pre-installation kitbefore the stores were wired for cable and before it became feasible to sell cable modemsbecause it believes time to market is crucial.

Since the first retailers began selling thepre-installation kits a year ago, Salzinger said, Excite@Home has learned that it can getmore stores to deploy the merchandising displays on a larger scale by using CD-ROMdemonstrations than by waiting for local cable operators to wire the stores.

He added that stores using CD-ROM demos have seen"just as many sign-ups" as their counterparts that are wired with live,high-speed Internet access.

Salzinger and Leung were both hopeful that Excite@Homeretailers would begin selling cable modems before the end of this year. Salzinger saidExcite@Home will not bundle the modem with the pre-installation kit, instead leavingmodem-purchasing decisions up to retailers.

Leung predicted that high-speed Internet services couldprove to be hot sellers for the holidays. "I can see people buying this to rewardthemselves, or wives buying this for their husbands," he added.

Salzinger said there had been some discussion atExcite@Home about whether to ship the pre-installation kits with holiday bows around them."Maybe next year," he added.

But some Excite@Home affiliates are running holidaypromotions, Salzinger said, adding that AT&T Broadband & Internet Services --which serves the lion's share of the good guys! West Coast markets -- plans to offer$75 American Express Co. gift checks to customers who buy pre-installation kits.

Whether they're sold as gifts or personal convenienceitems, the good guys! is counting on the kits to sell well. "I bought a lot ofinventory," Leung said.

Office Depot will initially roll out Excite@Home at 75 ofits more than 750 stores.

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